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 HUMAN RESOURCES GUIDELINES

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As a business owner, you know motivated people are better employees. And motivation comes from either a carrot or a stick. You might feel that having and keeping a job in today's economy should be sufficient motivation. However, it's human nature for people to want something a little bit special. Run properly, incentive contests pay for themselves and boost productivity. Here's how.

Virtually any size or type of businesses can use incentives to motivate employees. There are two issues that need to be decided:

• How to measure performance.
• What to award.

There are performance and motivational companies that are in business to create incentive programs for companies. These operations are useful if your employees are in a variety of offices or in the field. However, a smaller, centralized company can create incentive programs all on its own.

HOW TO MEASURE PERFORMANCE

1. Determine what performance or behavior you want to reinforce or improve. It could be as straightforward as increased sales or decreased product rejects.
2. Create a reliable method to consistently measure that behavior. This might be an existing sales report or creation of a tracking report on what is causing products to be rejected at a quality check. Select a logical period of time to track the performance being measured. It could be monthly, by period, or by quarter.
3. Determine how much of an increase in performance you wish to reward. Make sure that the increased profit from improved performance not only pays for the incentive awards but also contributes additional profits to the company.

WHAT TO AWARD

What awards and prizes are best at keeping employees focused, interested and enthused?

It depends. Every employee is different, so what motivates each is different. Some say cash is an easy answer, but it does not provide the important emotional tie that products offer to both the recipient and the company.

One way to start: talk with those you are trying to motivate. Find out what is important to them.

Some experts contend that money doesn't motivate on its own. But money buys things that motivate, namely merchandise and travel. On the other hand, product incentives work because they represent the things that people would like to have, but will not necessarily spend out-of-pocket cash for because that cash is used for necessary things.

Benefits to Product Incentives:

• It's easier for potential qualifiers to focus on merchandise and travel instead of cash.
• Products deliver opportunity for recognition, trophy value and lasting reminders.
• For the manager, products stretch the budget further. Companies buy watches wholesale. The perceived value of merchandise surpasses the face value of an equivalent amount of cash. However, it costs you $100 to give an employee $100.

Benefits of Cash Incentives:

• Money can be used to buy products that the person really wants, compared to product awards that may not be on-target for personal desires or interests.
• As sales forces grow more diverse in background and geographic locations, the universal appeal and flexibility of cash is sometimes more appropriate.

Nontraditional Incentives:

Some incentive programs go beyond simply offering cash products by using nontraditional rewards. Examples include autonomy, learning opportunities, challenges, time off, flexible work schedules and greater freedom to voice opinions or pursue an idea.

Whatever incentive you select, the goal is not only to have your people strive for a reward but to see that higher levels of performance are within reach. Incentives should be used as proof to your people that they can perform at higher levels.

One key to an incentive program is to understand that employee interests and values shift, and lifestyles change. You must keep asking employees what they are interested in to keep an incentive program fresh, interesting and motivating. Never put a program on autopilot.

DON'T FORGET THE LEAST EXPENSIVE INCENTIVE

While incentives are valuable, business owners should never forget one motivating technique that costs nothing - personal recognition. Praising an employee in front of his or her peers can be more motivating than any amount of cash or pile of prizes.

This information is compiled and provided by George S. May International Company.
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