This blog is about business incentive programs
While changes and adjustments are sometimes necessary, companies must strike a balance when it comes to tinkering with the plan. If companies change the plan too much and too frequently, individuals could become confused about priorities and what they need to do to meet their goals. Companies should be adjusting goals each year and reviewing overall plan design every three or four years, depending on how quickly business changes, says Sejen.
Show and Tell
"Companies can't over-communicate about an incentive plan,". "The more you share about the business, the more employees want to know. And the more they understand why the company is doing something, the more likely they are to accept it."
Although communication should be broad-based, line managers should also be heavily involved in communicating with employees about the incentive plan on a daily basis. The goal, of course, is to make sure employees know and understand how the incentive works, including how goals are set, how decisions are made about payouts, and, most important, what employees need to do differently to achieve those goals and receive their payouts.
Line managers also are often involved in or responsible for setting goals and performance targets for individuals or groups of employees. Therefore, they may need support from HR as they determine how goals should compare to current performance levels.
Sejen says the good news is that "Companies are getting a lot better at leveraging the power of incentives. They are thinking about why they are offering the incentive, and they have gotten serious about putting meaning into pay for performance."
In this way, companies can make sure that their incentive plans motivate employees to perform at a higher level without unintentionally encouraging them to engage in unacceptable behavior.Companies with an incentive plan should develop a written document detailing how the plan will work and how payouts will be handled in various situations. The plan document should also clearly state that the company has the right to change the plan at any time as needed.
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