The do's and don'ts of incentive schemes
At H D Pritchard & Co we can advise businesses in the Carmarthen area on many aspects of business life. Here are some pointers for employee incentives...
Incentive schemes can have great benefits both for your business and your staff. Rewarding good performance motivates your star employees, and encourages others to emulate their achievements. However, there are pitfalls, so tread carefully when devising an incentive scheme. Here are some do's and don'ts:
- DO reward results
- DON'T reward activities
- DO set targets that encourage employees to maximise profit opportunities
- DON'T set targets that do not fit in with your overall objectives
- DO reward results in proportion to the extra profit they generate
- DON'T set upper limits to the amount that can be earned in incentive payments
- DO use incentives to take overall pay to the high end of the market
- DON'T tamper with basic pay levels - keep them at competitive market rates
- DO use equitable criteria so that everyone feels equally motivated
- DON'T forget to communicate the successes and failures to all concerned on a regular basis
- DO fund incentive schemes from the additional revenues they generate
- DON'T make promises you can't afford to keep!
Call us if you would like help in developing strategies for motivating employees and reducing staff turnover.
If you are in the Carmarthen area and are looking for help and advice from a team of professional accountants and business advisers, contact H D Pritchard & Co.