how to build incentive programmex

Tips on How to Create Effective Employee Incentive
Programs
If you wish for your business to generate more profit than usual,
you need to work on creating two types of incentive programs:
one for your employees and another for your customers.
COMMUNICATE – Use all the ways possible to know how your
employees feel. Have them fill out evaluation forms, and
encourage them to voice out their opinions. Make it a point to
know them personally so that you’ll also be able to read
between the lines.
EXTERNAL AND INTRINSIC MOTIVATION – Both are
important if you wish to properly motivate your employees. It’s
impossible for one to stand without the other. External
motivation can be provided by giving away cash and other
similar incentives like travel packages and gift checks. Intrinsic
motivation can be provided by establishing company loyalty,
aligning their goals with that of the company, and giving them
sincere compliments when they do something exceptionally
well. A simple pat on the back can do wonders to a person’s self-
esteem.
MONITOR, MONITOR, MONITOR – Changes in an employee’s
preferences may differ due to changes in the economy. Priorities
may differ because of a change in lifestyle. Thus, it’s important
to constantly monitor and evaluate the effectiveness of your
program.
SHORT TERM VERSUS LONG TERM BENEFITS – Be aware of
which incentives would work better for motivating people to
achieve short term goals and which ones would work for long-
term goals.
GIVE REWARDS INSTANTLY – If an employee does something
well, give him the reward he deserves immediately. Don’t delay

because your employees might think you’re begrudging them of
the reward they deserve.
Tips on How to Create Effective Customer Incentive Programs
KNOW YOUR TARGET MARKET – Are you sure you know
what your target market is? Determine everything about them
from general demographic factors like age, gender, income
class, to the little but important details like which colors or
designs they prefer and so forth.
COMMUNICATE – Again, do everything you can to know what’s
on your customers’ mind. Have them fill out survey forms, and
to make sure that they’ll answer these, give them incentives to
do so.
Keep in mind that although you truly need to spend money for
both incentive programs to work, you don’t need to spend a lot
because big capital doesn’t necessarily equate with
effectiveness. Creativity and resourcefulness still counts so it’s
definitely possible to have a successful incentive program
without denting your company’s pockets too much.
REWARD CUSTOMER LOYALTY – Know who your loyal
customers are. And when you’ve identified them properly, make
sure that you reward them accordingly. Let them know that
you’re aware of their loyalty to your company and that you’re
giving them a reward because you appreciate it.
GIVING AWAY REBATES – Be careful when using rebates as an
incentive strategy for your customers. Due to numerous
controversies surrounding rebates, more and more consumers
are feeling discouraged and reluctant to take advantage of
rebates. If and when you do use them to encourage customers to
patronize your products or services, make sure that you use a
simplified process for your customers to redeem their reward:

don’t dangle a carrot if you don’t plan to give it away in the first
place.
GIVING AWAY PROMOTIONAL PRODUCTS – Promotional
products are always welcomed by all kinds of customers. Be
sure, however, that you give them something useful – even if it’s
only in the aesthetic sense. If you skimp on the costs and design,
your incentive strategy might end up backfiring on you.
Top 7 Ways To Develop An Incentive Program
1. Focus on the desired behavior needed or the goal of
the program.
Begin with a clear, briefly-stated objective. Identify what
goal/objective needs to be accomplished, for example:
improved attendance, longevity, reduced accidents, etc.
The objectives must be specific, simple, and obtainable.
2. Select an implementation team.
Before advancing, set up a committee of employees to
obtain recommendations from the people who actually will
be affected by the recognition effort. It is important to
bring people in from all levels of the organization. Use an
outside expert if necessary to facilitate the process. Insure
the team helps to set the goals and performance factors
and are in a position to report any obstacles to
improvement.
3. Outline a strategy.
Build the foundation of the incentive program carefully.
Decide on the methodology to be used. Focus on and detail
who is the target audience, and anyone else who will be
affected by the program. Decide if the program is going to
be employee or management driven. Employee driven
programs are the best and easiest to carry out.

4. Decide on the budget.
Insure there are adequate resources available before
starting the program. A program involving sales personnel
will be different and usually costs more money.
5. Set goals.
Establish quantifiable and qualitative goals that can be
measured. Try to keep it as simple as possible. The more
complicated, the likely this effort will fail. The goals need to
be fair and reachable for the target group.
6. Pick the type of recognition or award.
It is important to select the correct award. The power and
influence of the award/recognition is minimized if the
individual does not care about receiving it. Spend time
discussing with the target group and select an award
within the budget framework. You may select several types
of awards/recognition and allow the winners to choose.
7. Develop a communication strategy.
Most programs fail due to poor communication. How will
people know about the program? Decide what form(s) of
media to use such as a newsletter, email, a brochure or in
new employee orientation materials? Decide how to
remind people through the life-cycle of the program.
8. Implement the program.
The best programs are those that the employees run
themselves. On the other hand, management-directed
programs usually take more energy and enthusiasm to
carry out the program. After a couple months, time
requirements are reduced. The target group will need
consistent and clear communication on the results and
measurement of the targeted behavior and performance.

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