Wednesday, December 17, 2008

Using Incentive Programs to Improve Employee Performance

The Employee Performance Puzzle

If you Google “Improve Employee Performance” you will find hundreds of thousands of interesting approaches and options. Everyone seems to have an answer...from training to better communications, research, consulting, new appraisal software, different measurement, 10 step management guides, performance assessments or surveys and reviews, etc..

While most companies that provide these various solutions have valid methods of improving performance, rarely do you see any of them recommend that you close the loop of performance improvement by rewarding your employees for results. Award programs just seem to be born out of trial and error, the natural progression after other solutions haven’t produced the desired result. Most companies think they know all the pieces of the employee performance improvement puzzle. They’ve spent millions on the separate pieces but have they determined the best way to group the pieces to affect the best result?

Award Systems Can Drive Performance

Employee engagement is the big challenge today. Corporations have fewer dollars to spend and are constantly striving to improve performance. Over the last few years, there have been many articles written on employee recognition as a viable way to improve performance. Studies have shown that recognition is a key element in employee satisfaction, and employee satisfaction is a key element in employee performance. Satisfied employees drive customer satisfaction and improved bottom line results. If it’s that simple, why don’t more companies include award systems to motivate and recognize their employees for improved performance?

Other studies have stated that when true incentive/awards programs are implemented correctly, individual performance improves by 22%. They also found that when there was both an individual as well as a team component that individual performance improves by 27% and team performance improves by 45%! Of course the essential point here is “implemented correctly.”

Implemented Correctly?

I have seen many recognition programs developed by corporations that are not true incentive programs. They are put together by recognition and service award companies (often the largest ones) that really don’t have the expertise to design a true performance improvement program. Their expertise is implementing years of service or simple employee “thank you” efforts, with awards that are antiquated. These programs rarely include measurable individual objectives, almost never have any feedback, have little ongoing communications, little if any research or training and the type of awards systems that were built to recognize years of service back in the 50’s. If you want a program to motivate your employees to produce the kind of results mentioned above, find a full service incentive company that has the experience to get it done, without the bias of an award system that is obsolete.

Properly constructed incentive programs can produce results.

Be Well, Be Happy, Hug Somone!

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