Incentive Plan


Designing a highly effective, motivational, and impactful Incentive plan that drives your employees to work to their full potential and produce the best results is important, yes. But what is more important is to make sure and realize if your incentive plan is working or not. Sometimes, designing the best plan is not all that is required from an organization. Its execution plays an important role as well.

The importance of Incentive plans cannot be neglected. Incentive programs are the most effective strategy to keep employees engaged and motivated to achieve improved performance. In addition to adopting an incentive program, each management shall ensure that the program is appropriately designed to achieve success. If a company has not once examined its plan, it will never know what effect it is having on its employees and effectiveness. As a result, every organization should assess its incentive system and make any required improvements to improve efficacy in attaining the set goals.

Here are a few things to keep in mind if your incentive program is not working:

1. Choose the correct performance measures:

You need to put a lot of thought into what the plan’s key performance indicators (KPIs) would be. For an incentive system to be efficient, it should be focused on delivering results that are critical to the company’s success. It will then be easier to coordinate and direct individuals’ efforts toward accomplishing those performance targets.

2. Layout the goals clearly:

Making the employees understand what is expected of them from a particular project can help smoothen the process. If they understand clearly what they need to do to reach the required target without having any doubts or questions, then the process would become a lot easier and more efficient for the entire workforce. With ill-defined Incentive plans, employees can find a loophole or play with the results. Hence, laying out the plan clearly and making them understand it thoroughly is essential.

3. Add the spirit of competition:

Gamification is a new and trendy concept that can ignite the spark that will drive employees to work better. The dynamic characteristics of social conditioning and competitiveness are critical considerations in building successful incentive schemes. Designing a plan whose incentives are desired by the majority of employees will help them accomplish challenging tasks as well.

4. Spitting performances:

Due to the performance-based nature of incentive programs, just individuals who provide worth should be eligible for compensation; low-performing staff should be paid minimally. The distinction should be such that a poor performer aspires to improve their performance to earn the same compensation as high performers, while the high performer is motivated to keep improving. To provide appropriate diversity between grade levels and performance levels, a balanced variance ratio should be set. To do so, the organization must first determine the value-add related to the various ability levels and work performance currently in use.

5. Goal Commitment:

Setting the right goal deserves your time and attention. A goal that is meaningful to the organization, and to its employees and a goal that would motivate the workforce can help the organization. When creating growth targets, aim for an integrated effort whenever possible to ensure commitment. Make sure to collect participant input as early as feasible in the design phase so that goals and obligations are divided evenly.


Designing Incentive programs can be a hard task, but it is even more crucial to check if these plans are working or not. It is not enough for businesses to run incentive programs. They must also evaluate their success in accomplishing the targeted goals regularly.

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