Thursday, December 2, 2010

Shouldn't Incentives Motivate?

On a recent flight to Detroit I sat next to a sweet woman from central Wisconsin. During the course of conversation, she asked what I did. When I told her that I worked with companies to help with their employee motivation programs, she replied “Oh you should talk to my company!”

She described how her company was purchased by AIG who had a company sponsored incentive program in place. The program is laid out like this; her boss would let her know at the end of the quarter how much bonus money she would see on her next paycheck. That was it. No explanation of why she was receiving the bonus, no feedback whatsoever. She thought that this must be the result of the media’s infamous slamming of AIG senior staff receiving large bonuses and extravagant travel. She assumed that now they were trying to “spread the wealth” to some of the worker bees but she didn’t really understand how it was supposed to motivate her. She said that she would appreciate knowing specifics of why she made the bonus, how she could improve, etc. She also expressed how much she loved her job, enjoyed giving excellent customer service, and would do it whether or not she received an incentive.

Every company dreams of great employees like her- people who's jobs give them enough satisfaction that they want to work hard- but it is certainly not the norm. Most employees need some sort of motivation to push them to achieve company goals. But in order for the goals to be reached, the carrot needs to be clearly understood.

I find this phenomenon more often than you can imagine. A company puts significant dollars into an employee incentive, but does not bother to make sure it is communicated and managed well. What a waste of company resources! A poorly designed and administered program is sometimes worse than none at all. Let’s use those dollars to implement a truly exciting and motivating travel or merchandise program instead of using it towards a cash bonus. Studies have proven time and again that cash is not motivating. They would get so much more for their money with travel or merchandise.

Of course, given the parent company is AIG, you may think that travel is not the best choice. However, it could be if laid out and planned properly. If they chose to communicate the business case for implementing a travel program focused on the workers and not the highly paid executives, it could go a long way toward improving their image in the marketplace. With results measured through a well done ROI analysis and feedback from the participants to gauge its effectiveness, they could turn lemons into lemonade.

AIG… give us a call!

Sandi Daniel
President & CEO

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