22 Aug Incentivise and watch you ROI grow to new heights
ROI isn’t just a meaningless buzzword in the business world. Instead, it is a highly important concept that defines whether or not a business venture will be a profitable enterprise. For investment to become enticing, the returns must exceed the new capital and labour inputs, and as entrepreneurs know, productivity is a key to success.
This is where a well-designed and well-executed incentives programme comes into the picture.
What are Incentives?
In simplistic terms, an incentive programme creates a culture of appreciation for good work. The form of appreciation should ideally be a mixture between peer recognition (this a very important aspect), and tangible rewards that have an inherent trophy value. This mixture serves as a powerful motivation for employees to perform at their best levels.
There are several analogies used in the industry to address employee engagement, but the stats all remain the same. For example, if you have 100 people working on a construction site, 30 of the workers do great work, while 52 workers are doing their jobs, but without much enthusiasm. The last 18 workers, unfortunately, are actively working to sabotage the project. They purposefully slow production down, are intent in producing sub-standard work, and perhaps even act to bring the project to a halt. Astounding.
Reputable research shows that companies that implemented effective incentive and rewards programmes outperform companies who don’t by between 30-40%: this is to say that employees are impressively inspired to realise their individual and team potentials.
What are the hard stats?
Incentives are realised in the areas of talented human capital retention, workforce morale, productivity, wellness, general positive attitudes and brand loyalty.
- 82% of surveyed individuals believe that recognition acts as a powerful motivational tool
- 78% of employees regard the acknowledgement of good work as being “highly” and “very” important, which in turn motivates good performance
- Almost 20% of talented employees seek alternative employment where their good work will be recognised by managers and directors
- A staggering 92% of employees regard incentives programmes as powerful motivational tools
This is all very informative, but what about that all-important bottom line?
Well, the answer to this is very easy: as a culture of appreciation leads to more productive work, more profitable work and that often over-looked element of top talent retention, companies implementing incentives realise a median return to shareholders almost double that of companies without programmes in place. The truly unbelievable statistic is that only 5% of the extra profits earned through incentive programmes need to be re-invested into the programme itself. This is enough to whet anyone’s appetite.
The obvious question now becomes, “How does one design and implement an effective incentive programme?”
A keyword here is “engagement”. Directors and managers need to embark on a meaningful conversation with employees as to how they imagine an incentive programme can be brought about. Once feedback has been received, it is usually a good idea for the management to approach a versatile and specialist company with many years of experience in the incentives space to design, manage and implement the programme.
It should be remembered that an incentive is a motivational and performance enhancing programme that encourages a commitment to increased productivity, increased sales, culture change and augmented profit. All the while creating a healthy work environment. As it stands, there really is no reason why a company should not implement a proper incentive programme. Happy incentivising!