By Terry Murphy CLP
Manager, human resource development
The first consideration in looking at employee incentive plans is to ask the question: What area of my business needs the most attention? What is the one item that were it improved, would benefit my business the most? This is the area that needs immediate improvement. This is where you should be looking to build an incentive plan that can change and improve the operation of the company.
If a firm is struggling with sales, then the focus on getting more business becomes important. Can we develop an incentive plan to stimulate sales? If we are losing people to the competition, how can we retain our employees? Can we develop an incentive plan to increase our retention? Does the company have a problem with safety? Do we have a complete disregard for safety and a “who cares” attitude? Can we find an incentive plan to get the focus on safety and improve safety performance? Are we finding that we do not project a professional image to customers? Can we find some way to turn this around? Is an individual a good employee who comes to work each day with a bad attitude? Can we tailor a plan directed at this individual to change his or her performance? What about a crew that is constantly losing tools, or has a very high scrap factor? Can we develop a plan to reduce these inefficiencies?
Be careful that you don’t set an incentive plan to try to correct or improve performance. Employees should be expected to perform to minimum standards. For example, if someone is constantly late, you should never create an incentive plan to pay the individual to be on time. This is part of employee discipline, which we can’t mix up with exceptional performance — “above and beyond” — which is the sole basis for incentive payouts.
While profit is important, many items need to improve in order that profit can improve. Incentive plans don’t always have to look only at only those areas that directly measure profit. We are also looking at areas that improve productivity and output. Improvement in these areas will improve profit!
Terry Murphy can be reached by e-mail at terry@landscapeontario.com.
