As the year ends and goals are set for the new year there may be a key role for incentives in managing and retaining key executives for the company. Rewards and incentives in the workplace have benefits for both employees and employers.
Here are some reasons for and examples of how to structure effective incentive programs for the management group.
1. Monetary Incentives
Monetary incentives reward workers for performance and productivity through money. These incentives include employee stock options, profit sharing plans, paid time off, bonuses and cash awards.
2. Non-Monetary Opportunities
Non-monetary incentives reward employee performance through perks and opportunities. These rewards can include flexible work hours, training opportunities and the ability to work independently. The rewards and incentives are valuable to an employee because they may allow workers to learn new skills and pursue advancement opportunities.
You want to retain key management personnel for a number of reasons. High turnover destabilizes the company and can have severe effects on moral of employees and the bottom line.
4. Enhance Growth.
You want to retain high performing managers to enhance your own company’s growth potential and to keep key people from wanting to look at other opportunities.
5. Setting the Bar
Good managers don’t expect a bonus without achievement but don’t set the bar so high as to be unachievable. That becomes a disincentive to achieve growth.
6. Improve Profits.
Set goals that help improve your bottom line; just achieving new sales records is not a priority if the costs exceed the benefit. Sales executives should be just as concerned about profitable sales as the CFO.
Pay executives for overachieving by sharing profits. As profits goals are exceeded rewards can continue to be major incentives if shared fairly. Reward contribution. Roll plans forward and allow incremental bonuses for achievements in consecutive years. That’s a great way to keep a key person from leaving; that extra bonus for additional achievement may be too juicy to walk away from.
Incentives are important tool to maintain a motivated and dedicated management team and a well-designed plan can bear fruit over the long term.
I trust these suggestions may help with goal setting in the new year. Please let me have your thoughts. firstname.lastname@example.org