Promo Power

Why Incentives?

Incentives are designed to promote a positive message within your business. Managed properly, they boost morale and productivity by giving your employees tangible goals to aim for within the parameters of their jobs. The right incentive can motivate any department in your business, from accounting to customer service.

Your options are extensive, and creativity counts. Don't limit rewards to traditional recognition symbols like trophies or plaques. Consider merchandise, trips, gift certificates-even time off. You can also offer group incentives or a menu of choices to fit the differing tastes and interests of your employees.

Choosing the right incentive isn't as simple as flipping through a catalog. In fact, your first decision is more important: what type of program to set up and how it will be structured. Although it's easy to think of incentives in terms of an annual program, it's sometimes better to reward more frequently.

The incentive should match the effort exerted. Rewarding quarterly or based on targets (like hitting certain sales figures or meeting certain deadlines) makes just as much sense as an annual program and can be just as effective. Of course, quarterly rewards don't have to be as lavish as incentives awarded annually.

Keep in mind that incentives need to reflect your employees' tastes and interests as well as the effort put forth. Plus, you don't want to offer gifts that aren't available immediately. Don't make your marketing team work extra hours one week to make a deadline, only to offer rewards that they'll receive weeks down the road. That can be discouraging and can even affect their future efforts negatively. Most gifts, with a few exceptions (like trips), should be available in less than 72 hours. That way, it's easy to make the connection between the gift and what it's rewarding. Cash is often looked down on as an incentive. Employees might view cash rewards as part of salary rather than a reward. Or they may come to expect them, so use cash rewards judiciously. But avoid offering promotional products as incentives; doing so seems tacky. You have the chance to show your appreciation for your employees' dedication with an appropriate reward, so don't use incentives as a marketing tool. If it's obvious that you didn't put any thought into the incentives, your employees won't appreciate them, and your program will backfire.

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This article was originally published in the November 2000 print edition of Entrepreneur with the headline: Promo Power.

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