The business world has some basic rules and guidelines about employee motivation that are common from company to company. In the last 20 years of owning small businesses, I have learned that these rules and guidelines are valuable to pass on because they work.
There are many ways to reward people who make above-and-beyond contributions to your business. Here are the most common rewards used by small business owners.
With any incentive program, there are some elementary Do?s and Don?ts that can make a big difference. If you are just starting to think about a Bonus Plan, for example, consider the following guidelines:
GUIDELINE #1 ? Reward those who are critical to keep in your organization. In a long-term sense, it is only important to reward those who are critical to your success. Don?t waste time or money on rewarding those who aren?t the key players in your organization.
GUIDELINE #2 ? Bonus programs tend to be complex, because we often try to affect too many different behaviors all at the same time.
Focus a bonus plan on the ONE most important result you want to achieve. This focus can change every month, but should only try to affect one behavior or one result at any one time. Time and time again, simple plans motivate, while complex plans create excuses.
An effective program has a clearly stated goal and a clear time limit. Monthly evaluation (or even weekly) is best.
GUIDELINE #3 - Try to time the reward to be as close to the right behavior as possible.
Make it simple and achievable and easy to communicate. Have a clear picture of what you want to accomplish as you form your bonus plan. Start with simple behaviors and progress.
GUIDELINE #4 ? Keep the goal so simple that it will be obvious to all when it is met. If the goal is and increase of profits by 10% over this same month last year, then chart the results in a visible place week by week. If the goal is ?No Customer Complaints?, then post a chart with the number of days without a customer complaint for all to see.
GUIDELINE #5 ? Make the reward easy to understand. Don?t make the calculation of a bonus a burden for your bookkeeper. For example, if the profits go up at least 10% over last year, the employee gets a $500 bonus. Simple, easy.
GUIDELINE #6 - To get the most out of your bonus plan, make a big show out of ?paying off?. Everyone loves to be patted on the back in public.
GUIDELINE #7 ? Always pay what you promise.
NOTE: Is money the best motivator? According to a recent survey I read about, ?money? ranked 3?rd on a list of motivators by the actual employees. Surprised? Believe it or not, money was beat out by ?recognition for a job well done? and ?interesting and challenging work?. Number 3 ?Money? was closely followed by ?involvement in decisions that affect them? and ?opportunities for growth and promotion?. In spite of what you think, your people just might be looking for a pat on the back, which some bosses find is harder to give than a bonus or a raise.