Top 10 Reasons Why Your Company Needs An Employee Incentive Program
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Employee Incentive Programs reward exceptional employees for reaching work goals, achieving milestones or simply doing a good job. These types of programs are designed to offer incentive and rewards to valued employees. Employee Incentive Programs have proven very successful in arousing motivation in employees and increasing the overall performance of the company. An incentive program is a great way to show employees that you value their input while at the same time increasing your businesses potential.
Here are the top ten reasons your company needs an Employee Incentive Program.
1. Mutual Rewards. An Employee Incentive Program is mutually beneficial. The employee feels valued and motivated and is therefore more productive and committed. The company reaps the benefits of a motivated, focused and loyal employee. The results of Incentive Programs have a consistent theme. The company’s bottom line increases as the employee’s productivity peaks.
2. Increased Motivation. Many people find it hard to motivate themselves at work. This is a common occurrence and one that has been significantly effected by Incentive Programs. These programs motivate employees by offering rewards for reaching targets and company goals. These come in many forms ranging from cash to cars to holidays to gifts. The rewards are a great motivator but what is more inspiring for the employee is that the company cares enough to offer these incentives.
3. Increased Company Morale. Rewards, incentives and recognition make for a happy, harmonious working environment. Goal setting and targeting objectives helps with focus and purpose. Employee Incentive programs offer all of these things and are highly conducive to company morale. Increases in company morale help to reduce absenteeism and overall company costs.
4. Increase Company Loyalty. Company loyalty is not something you can buy. However incentives for good work and rewards for hard work go a long way to securing commitment from employees. Employee incentive programs show employees the company values their input and their work. If an employee feels valued and appreciated they are more likely to form an allegiance to the company.
5. Increased Productivity. Incentive programs promote productivity in a number of ways. Employees are offered incentives for reaching targets or for good work in general. These incentives vary but the main aim is to encourage employees to work towards company goals. With the promise of incentives and clearly defined targets employees are more productive and motivated.
6. Increase Objective Achievement. Incentive Programs are a great way to reach targets and company objectives. Using an Incentive Program employers can set realistic goals and reward employees when the reach them. This is a great way to boost productivity and morale while at the same time achieving company goals.
7. Reduced Company Costs. Overall company costs can be reduced as a result of an Incentive Program. This cost can be measured in terms of reduced absenteeism, reduced recruitment costs and turnover of staff. You will also see a significant return on your investment via increased productivity and motivation within the office.
8. Reduced Absenteeism. The bottom line with incentive programs comes down to the very simple fact that people like being rewarded for hard work and a job well done. The rewards are only part of the equation. Incentive schemes show employees the company cares and appreciates the work they are outputting. If an employee feels appreciated and has clear targets that result in rewards then they are more likely to want to come to work.
9. Team Work. Incentive Programs promote teamwork and foster an environment that is conducive to success. Employees working towards rewards or targets will pull together to achieve desired results. Teamwork increases efficiency and creates harmony within the workplace.
10. Decreased Turnover. Incentive Programs foster happy, productive working environments. Employees enjoying this kind of environment will be more likely to stay long term. This means incentive programs reduce the amount of turnovers within the company. The advantage of consistent staffing is that you are not spending money on recruiting or training new staff. You are also able to retain loyal committed employees with a vested company interest.
Micah Joel, a systems engineer at SupportSoft in Redwood City, Calif., calls himself a “B player.” There is no shame in his voice. He will work a 60-hour week when the company is under the gun but also feels no guilt when he cuts out early to volunteer in community theater or train for triathlons. His goal is balance, not a corner office. Gratifying work is more important to him than promotions or pay raises. “I work for mental chocolate,” says Joel, 29.
When employers aren’t busy weeding out the bottom 10% of their workforce, they’ve been trying to steal the A players from the competition in a battle to lure the best. But some of those employers are coming around to the realization that failure and success might not lie among the weakest and strongest links, but in the solid middle, the B players like Joel, the 75% of workers who have been all but ignored.
Companies have been trying to capture what organizational intelligence consultant Adrian Savage calls the “unicorns,” but the focus is starting to shift to the horses, the B players. “Ignore them at your peril,” says Thomas DeLong, a Harvard management professor who co-authored with organizational strategy consultant Vineeta Vijayaraghavan of Katzenbach Partners an article in the June issue of Harvard Business Review called “Let’s Hear It for B Players.”
Five years ago, high-tech companies were going to such extremes to raid each other for A players that National Semiconductor rented a billboard outside Texas Instruments’ headquarters in Dallas and gave a toll-free number for the competition’s employees to call for a new job.
Today, the high-tech industry is also coming to understand the value of B players. A players, by definition, don’t hang around when opportunities for riches and promotions dry up, DeLong says. So when dot-com and other tech stock options started to take on water, many in Silicon Valley ran like rats, some back to the industries from whence they came. Left behind were the loyal B players, who still retained the organizational memory to help their companies survive and now move forward.
The importance of B players may be only now dawning on the experts, but it’s one of those common-sense discoveries that many garden-variety workers have subscribed to all along. The backbone of every company is in the middle where the ether of great thoughts is hammered into reality. Every boss knows the frustration of seeing great ideas fall through the cracks, and in their best-selling business book
Execution: The Discipline of Getting Things Done, co-authors Larry Bossidy and Ram Charan argue that the biggest obstacle to success is not a lack of grand vision but turning a little vision into some product, service or useful innovation. “B players are crucial,” says Bossidy, retired CEO of Honeywell. “They may get directions from others, but they’re the ones who execute.”
There is no evidence that A players are any smarter than B players, DeLong says. The difference is in temperament. There are many types of B players, but most are loyal (to a point), don’t live and die for the next promotion (but want challenging work), don’t need coddling (but can die of neglect), are honest (if not diplomatic) and are not as driven by power, status and money as are A players, who live for little else. Indeed, A players admit to being maddened by the B players’ seeming indifference to what matters to those at the top.
Ken Siegel says he has worked with a number of top executives as a management consultant in Beverly Hills, California. When those executives talk about their promising employees, they usually lump them into just two categories. There are the “strong,” who are willing to sacrifice their personal lives, even morality, to get to the top. Everyone else is “weak,” Siegel says.
A players “don’t understand why I’m not trying to get their job,” says Todd Walter, who has a high-sounding job title as chief technical officer of Teradata, a division of NCR. But he has only one employee working for him, whom he calls an apprentice, and Walter considers himself a B player. Walter has coached his sons’ basketball and baseball teams and recently spent a week canoeing on the Green River in Utah with Boy Scouts. He says his immediate boss is OK with his priorities, but feedback from other executives has been “mixed.”
B players demand but a fraction of the boss’ time compared with those who need either constant stroking or reprimanding. McKesson, a Fortune 20 pharmaceutical wholesaler, calls B players “performers in place,” and they make up 70% of its 24,000 employees. “They are happy living in Dubuque,” says McKesson CEO John Hammergren. “I have more time and admiration for them than
the A player who is at my desk every six months asking for the next promotion.”
To use the word of the day, B players are “embedded,” not only in their jobs, but also in their communities, says Tom Lee, professor of human resource management at the University of Washington- Seattle. He is also editor of the Academy of Management Journal.
“A players are motivated by a different set of rules,” says Joel, the systems engineer. He says the best managers recognize the difference.
The Harvard Business Review article on B players was buried in the back half of the June issue, but the message is resonating. The article ranked second among reprint requests from the June issue, and HBR editor Thomas Stewart says he expects the attention to B players to be a topic that will gain a following with time.
DeLong and Vijayaraghavan say they have been approached by several companies since the article was published that are looking for ways to address the needs of B players. It may have taken companies and experts awhile, but music lyrics have long connected with B players, most recently with the hit song Red Dirt Road, in which country stars Brooks & Dunn sing, “Happiness on earth ain’t just for high achievers.”
Then, there is the analogy that running a business is like running a sports team: “During my coaching days, the most dysfunctional teams were the ones who had no respect for the B players,” says Karen Freeman, former head coach of women’s basketball at Wake Forest University and an assistant coach for the Charlotte Sting of the WNBA. She is now executive vice president of Biologics, a cancer pharmacy company. Basketball coaches who attempt to forge a team of stars are asking for disaster, Freeman says. If every player needs 15 to 20 shots a game to be happy, there is going to be disgruntlement because each game has but one ball and 40 minutes. In basketball or business, when the team goes into a slump, stars are the first to whine, Freeman says.
Many companies long ago quit giving the gold watch for years of service, opting instead to recognize only performance. But SupportSoft last year brought back rewards strictly for longevity. Of the 14 employees who have been with the company since its founding in 1997, 10 are B players who held fast when the company’s stock went from $39 a share in 2000 to less than $2 and have nursed it back up above $8.
Recovered A players
The most valuable B players, DeLong says, are recovered A players. They have “breathed the rarefied air” but for various reasons rejected the demands of an A life. Recovered A players know how other A players maneuver. They can be called in as a pinch hitter for an occasional home run. Bob Bertrand is a recovered A player, says Gary Kowalski, CEO of Vector SCM, a supply chain management company used by General Motors.
Bertrand, 61, was a senior executive at Leaseway Transportation before retiring after 32 years. Now, he has a non-executive title at Vector SCM where he considers himself a “conduit” between the A and B players. B players talk to him because he is not management, and A players talk to him because he’s no longer “a threat to anybody,” Bertrand says.
B players interviewed hesitate to be called potential whistle- blowers, but they may be uniquely valuable in times of corporate scandal. They don’t weigh the political repercussions of what comes out of their mouths, DeLong says.
Walter says he recently persuaded Teradata to back away from a multimillion-dollar contract with a large client because he believed the sales agent had exaggerated to a customer what Teradata was able to deliver. “I’m the truth teller, the one who is brutally honest,” Walter says.
A CEO at age 36, Sam Goodner of software company Catapult Systems in Austin is by definition an A player. He’s married to an A player, Caroline Caskey, president of Identigene in Houston. Goodner says most CEOs understand the desire for a different lifestyle, then admits that executives get frustrated with B players who don’t use their leadership potential.
“We need A players to set the vision, get things started, close the big deals, but none is sustainable long term without solid B players,” Goodner says. “There are many positions that need someone accountable and hard-working but don’t have a lot of room for advancement. An A player would rapidly become frustrated in that role.”
“Some (B players) really do want to be A players but are risk averse” and need a motivational push, says Robert Wilkins, president of Danfoss, the U.S. arm of Denmark’s largest manufacturer. Bossidy says some talented employees are afraid that getting too high in the organization will rob them of freedom. “They come packaged differently. The job as a leader is to get the most out of them.”
When CEOs or coaches get together, conversations often turn to the players they have had with the talent to go to the top but without the disposition to fulfill that promise. “As I matured in my coaching life and now in business, I came to realize those people bring great stability and step up to the plate when they have to,” Freeman says.