How to set up and implement a successful incentive scheme

Steve Baker of Grassroots Group explains the best way to create an incentive scheme that works for you and your target audience:

Identifying the objectives
In order to measure the success of an incentive scheme you need to be clear on what you wish to achieve and add to the business. Examples include :

  • Increasing turnover/margin
  • Improving service/green credentials
  • Targeting specific products
  • Decreasing costs
  • Enhancing staff skills.


Setting a budget
Incentive schemes can be largely self-funding but there are costs to consider:

  • Communication (e.g. design costs)
  • Rewards
  • Certificates
  • Tax and NI contributions.

Identifying the audience
Here are some points to consider:

  • Can all staff contribute or is it restricted to specific people?
  • Will you demotivate staff in any way?
  • Can you enhance a previous scheme with a separate programme?


Setting targets
If your objectives are specific, setting targets should be straightforward. Here are some things to remember:

  • Measurable targets are essential
  • Targets should be challenging but achievable. If not, you will not achieve your objective and are at risk of demotivating staff
  • Targets for teams will encourage camaraderie and develop/strengthen teamwork
  • Linking individual targets with overall corporate objectives will engage staff.

Deciding on timescales
Incentives need clear timescales to ensure participants know when to achieve goals. The scheme’s length depends on what you want to achieve.

  • The average sales incentive duration is six to eight weeks, but short bursts of two weeks will really concentrate effort
  • Incentives relating to service are more effective if run to a period of 12+ weeks
  • Specialist schemes requiring a major change in behaviour will need a much longer duration to achieve success.

Selecting rewards
If your aim is to motivate staff into small improvements, the rewards will differ to a scheme with major improvements. You also need to give staff a choice of reward. The most popular rewards are:

  • Vouchers
  • Merchandise
  • Pamper/experience days
  • Incentive travel
  • Prepayment cards.

It is vital to communicate clearly. If aims are unclear, they won’t be achieved.

  • Use a variety of communication methods (e.g. brochures, posters)
  • Performance systems should be transparent so staff can note successes
  • Targets must be communicated clearly and not altered (if there is a need to stretch targets, you should complete one programme and commence a new one, or introduce additional incentives).

Ongoing and the end result
You must communicate continuously throughout the individual’s development as well as on the scheme’s goals:

  • Regular performance updates will maintain momentum
  • Highlighting exceptional performance will strive others to succeed
  • Peer recognition is motivational, and giving awards for contributions will promote similar behaviour.

You can measure the success of the scheme in various ways:

  • Numerics (e.g. sales, costs) can be measured by your business’s reports
  • Softer targets, i.e. service elements, can be logged throughout the scheme
  • Ask the participants! This will give you a direct view of the scheme.

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