You want to reward employees for doing a good job and for going above and beyond. You want to incentivize the behavior you want repeated. This is great. A couple things you need to be aware of in order to make it work the way you want it.

First.  Money does not motivate everyone. Those who are motivated by money will be drawn to this and will want to gain the maximum from it.  If a person is not motivated by money, you may or may not see a change in their behavior. This means you will have to find another way to  motivate the behavior desired.

Second. Be clear on what the desired result is BEFORE putting the plan together. I know this may sound obvious and it’s about asking the right questions.  For example, I had a client who wanted to give the business development person a bonus for signing a new dealer to sell their products. I asked – you want to reward the contract or the additional business the dealer brings in? Their plan was rewarding the contract and the result they were seeing is lots of new dealers with no additional business.  They were getting the wrong result.

Third. Find the loopholes.  If there is a short cut to getting the extra money, you will have a few people who will figure it out and it can cost you. For example, a call center operation that rewarded their customer service people for handling customer complaints/issues quickly. What ended up happening is the customer service person would answer a call, give some sort of solution which wan’t necessarily what the customer was looking for and hang-up. Quick call = bonus.  This actually caused customers to be more frustrated as they would have to call back again. The fix, reward “no call backs”.

Lastly, if you want to know if you have the right components in your plan – show it to a couple of couple of employees and ask what they think they have to do to get the bonus.  You will find out quickly if you are getting the result you want and if there are any loopholes.

What incentive plans have been successful or unsuccessful for you?