What's your approach to incentives?
September 1, 2007
When it comes to the subject of incentives, thoughts and opinions differ as widely as the names of the programs themselves â€” Incentives, Incentive Programs, Incentive Plans, Employee Incentives, Employee Motivation, Human Resource Impact, and so on. And although the names pretty much refer to the same process, the thoughts typically take one of three tracks.
Thought Track One is the most dominant (in my experience) and is principally comprised of the “indifferent.” These people are unsure if incentives do or do not work, regardless of the number of testimonials from peers, vendors or unsolicited sources for or against the use of incentives. The indifferent are the first to jump onto and off of the “off-the-shelf” programs.
Thought Track Three is the second most dominant and includes such endorsements as, “a godsend,” “the best return-on-investment,” “should have done it sooner,” even “increases company loyalty” (company loyalty is not something you can buy). I’ve noticed that these endorsements are found only in the brochures and rarely expressed by anyone who doesn’t have a vested interest in selling incentives plans.
Thought Track Two includes everyone who has a true grasp on attempting to deliver “what is right.” This is the most difficult endeavor for the EHS professional â€” delivering a truly valuable plan that considers the culture of your operation, what your management team will accept and support, and how your employees will regard its development and validity.
With this goal in mind of delivering the best incentives solution for your company, there are a number of do’s and don’ts to remember. Let’s begin by gaining a better understanding of incentives.
The Merriam-Webster dictionary defines an incentive as “something that incites or has a tendency to incite to determination or action.”
So it appears that â€” definition-wise and in speaking here and now on human behavior â€” an incentive would be used to get someone to, at the very least, decide to do something and, preferably, to act. Here is where this reasoning begins to break down for me because I feel that, historically, incentives are both positive and negative. For example, I would clean my room not because I was rewarded for doing so, but because I wanted to avoid being punished for not cleaning my room. Likewise, I wouldn’t stay out all night when I was married not because it wasn’t fun but because the aftermath wasn’t fun.
So the definition of “incentive” really doesn’t give the full definition for workplace use, which leads us to our first DO and our first DON’T:
DO your homework to define your own unique applications for incentives; and
DON’T rely solely on what others might try to tell you is a best fit for you and your operations.
Wikipedia’s entry is much more involved, as one would expect from an encyclopedia:
Incentives can be classified according to the different ways in which they motivate agents to take a particular course of action. One common and useful taxonomy divides incentives into three broad classes:
Remunerative incentives (or financial incentives) are said to exist where an agent can expect some form of material reward â€” especially money â€” in exchange for acting in a particular way.
Moral incentives are said to exist where a particular choice is widely regarded as the right thing to do, or as particularly admirable, or where the failure to act in a certain way is condemned as indecent. A person acting on a moral incentive can expect a sense of self-esteem, and approval or even admiration from her community; a person acting against a moral incentive can expect a sense of guilt, and condemnation or even ostracism from the community.
Coercive incentives are said to exist where a person can expect that the failure to act in a particular way will result in physical force being used against them (or their loved ones) by others in the community â€” for example, by inflicting pain in punishment, or by imprisoning her, or by confiscating or destroying their possessions.
I think you might be getting somewhere now in understanding what kind of thought needs to be put into deciding your particular approach to incentives plans. Let’s consider each of the three broad classes mentioned above, in reverse order:
Coercive incentives: They have been around forever and are rarely considered an incentive because most deem incentives to be positive. There are no incentives plans that advocate punishment (demotion, suspension, termination), or any kind of discipline for that matter.
DON’T forget about (or deny) the past; negative incentives are what prompted the need for positive incentives.
Moral incentives: The right thing to do? Oh, c’mon … if the majority of society truly acted â€” let alone believed â€” in anything other than self-interest, there wouldn’t be a need to talk about incentives.
DON’T rely on people to do the right thing (that’s not wholly cynical; continue reading); and DO make sure that all of your actions revolve around ensuring that your people do the right thing (and that will only come about as a result of training, education, supervision and assessment).
Remunerative (financial) incentives: This is the backbone of every off-the-shelf incentive plan: rewards of one kind or another, not necessarily money, though usually something material in nature. But it needn’t and shouldn’t be for you, as long as you tailor your plan, program and recognitions according to your needs. Your employees won’t respond if they see that there isn’t any substance behind your “incentives” efforts. DO establish, without a doubt, that money and material goods alone will not be the answer.
Let’s finish with the final DO’s:
DO show appreciation, on a daily basis, for the work of your individual employees (employees are motivated to achieve greater results not only because of the rewards they receive but because of the appreciation they are being shown);
DO maintain credibility through personal contact and not bulletin board campaigns or the rare CEO announcement;
DO mix up your approach with knowledge quizzes, presentations of Tool Box Talks, feedback surveys and participation;
DO try to be creative.
Most importantly, discuss the plan with employees: What would they like? What would they respond to? After all, it is their “incentive” program, isn’t it?