Financial incentive programs come up as discussion topics at peer group meetings – especially newer groups – all the time. After 30+ years of experiencing contractors search for and fail to find the ideal incentives program, might we conclude that the “perfect” plan simply does not exist? If cash incentives aren’t all they’re cracked up to be (not to mention the fact that they often backfire and produce unhealthy behaviors and other unintended consequences), what does an enlightened contractor do to reward productive employees?
Tune in this week as Wayne offers seven strategies for helping your employees feel better recognized and rewarded. What do you think? Are cash incentives the way to go? Or not? What has been your experience? Please share with us in the comments section.
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Hi Wayne. Great video and timely topic. We see value in both cash and non-cash incentives. We want our employees to enjoy in the financial success of the companies and also feel part of a family at work. In addition to your 7 great points, I also think that giving every employee a career path, no matter the role, is important for retention.
Excellent, mark! You guys have a great thing going! Thanks for adding to our thinking.
I have found letting managers set their own times sometimes has them almost disappear. I’m not sure how to tackle that.
Do you have the right managers, Stacy? Everyone at FBI sets their own schedules, and we rarely miss a beat. If your folks aren’t holding themselves accountable, and they’re letting you down with their behaviors, you have to review your team composition.
Hi Wayne,
I have listened to your blogs for a number of years now and have greatly appreciated them. This is the first time I have ever felt compelled to send a comment. I have a great deal of experience with incentives and the difficulties surrounding them. I am in my 40th year with our family construction business. My first year in 1983 (I was 17), we hit the milestone of 1 million in revenues. I am currently the CEO and our core business along with our numerous affiliates, we are targeting 160 million this year and we have about 500 employees. Over the years we have tried every incentive program imaginable with less than overwhelming success (which fits with your presentation).
However, in todays climate, I believe that the seven things you mentioned represent the floor of what needs to be done. Those things aren’t nice extras, they are expected – it is the least we can do.
Several years ago I designed an entire compensation structure that has many creative parts to it – performance incentives based on annual goals, rainbow charts, year over year improvements, deferred comp. plan, etc. Appreciation helps to get everyone on board and rowing in the same direction – Cash (more importantly the ability to realize their dreams) inspires the implementation of discretionary effort that makes the rowing go faster and more dynamic than ever before. I completely agree that money alone doesn’t inspire people to change and behave differently, but I am convinced that specifically designed compensation packages that are applied to the right kind of people will produce results that far exceed expectations. People don’t simply want to feel like they belong, they want to become a valuable piece of something important and therefore devote themselves to creating a habit of excellence.
I would be happy to hear YOUR comments and share more if desired. Keep up the good work!
Thank you, and congratulations on your growth and success! Kudos also for being one of the very few contractors who have figured out a working (workable?) incentive comp plan. The point I am making (maybe I didn’t so so well!) echoes your comment: “money alone doesn’t inspire people to change…” Too many contractors focus on the money part expecting the non-monetary parts to follow naturally. As you have experienced, money can be part of the equation, but $ alone won’t get you where you want to go. Are we in agreement on that point, at least?
Thanks, Brad!
Very good information and food for thought, Wayne! Certainly, no organization wants to have an incentive comp plan that incentivizes incorrect behavior – in steps clear targets, accountability, and consistent application of accountability. I think that is the real struggle.
Cash can be a motivator in that it enables individuals and families to realize their dreams (buy a car, own a house, send kids to a good school, take a vacation, retire). Competitive base pay can compensate in the absence of an incentive comp program.
While allowing employees the latitude to pick their hours and locations works for some organizations, it is not practical for heavy highway contractors who are crew-based.
Agree that we should spend more time on marketing our benefits – not only to external potential candidates, but also to our internal folks.
I love gift cards, but they scare me because they are taxable. With 87,000 IRS agents looking for something to do, gift cards will result in exposure for employee recipients and the company.
Really like the note pad appreciation idea. This goes a long way with employees and does not cost a thing! Also, beginning meetings with appreciation can be a culture changing behavior.
Good observations, Valerie, especially the one about the horde of 87,000!