FUSION prides itself on our expertise of the “ins and outs” of an incentive. Below is a list of the crucial elements needed to maintain a successful incentive program.
Measurable & Realistic Program Objectives – to reward success, you must be able to measure it. Expectations must be clear, specific and credible. Nothing kills the effectiveness of a program quicker than setting unrealistic goals.
Specific Program Period – it is important to consider when to start and when to finish. Start dates must be early enough to allow attainment and produce an effective return on investment. End dates create a sense of urgency and allows for results evaluation.
Carefully Select Participants – choose the people who will have the most direct impact on the results you want to achieve. Think of both the targeted employee group and the support team that affects that group as well, i.e. managers or supporting departments.
Significant Award Opportunities – awards must have a perceived value sufficient to justify the effort required to earn them. A high performing participant should be able to earn an award value at 3-5% of their regular compensation.
Appealing Awards – there are two important factors to consider when evaluating potential awards.
- Non-cash awards are much more effective than cash (see our blog on Cash vs. Non-Cash here.)
- A group travel experience is the most appealing award you can offer. No award is more requested by potential participants.
Clear Rules – “Do this, get that” is the objective when developing program rules. Limit award opportunities to key results and behaviors.
Frequent Program Communication – this is critical for maintaining excitement and momentum. The longer the time frame, the more communication is needed to ensure participants remain focused on program goals!
Performance Reporting – keep participants posted on their progress toward goals and awards with “performance statements.”
Budget Considerations – project potential levels of improvement and resulting revenue / profit increases. Define acceptable, preferred and ideal results.
Clear Benchmarks for Program Success – this step is vital to evaluating program success and determining how to make your next program more effective. Define your benchmarks after all other program elements are finalized before starting the program. Set specific targets for program results and include historic seasonality in performance projections.
Ongoing Observation / Analysis – perform periodic reviews of performance and expenses to date; review quarterly for 12-month programs, bi-monthly for 6-month programs and monthly for programs of shorter duration.
Post-Program Evaluation – here is where the final version of your periodic reviews, comparing actual with estimated budget, occurs. Include post-program participant surveys and any subjective feedback.
Contact FUSION to find out how we can design an effective, profitable incentive program for your company.
No comments:
Post a Comment