Employee incentives and benefits provide a goal to motivate staff members within an organization. Incentive programs, benefits and rewards are a positive way for an organization to honor or acknowledge employees’ efforts or achievements. Incentive and employee benefit plans are as individualized as the staff in an organization.
The steps to be followed for developing an incentive and employee benefit plan are as follows,
- A clear set of goals must be identified. A concrete list of goals that are to be achieved by the end of each quarter and year must be created by the company and its managers. The company’s business plan and mission statement help guide the identification of these goals. The collaborative contribution of employees to the overall corporate goals has to be determined. A list of corporate-wide goals has to be created and each department manager must generate a list of departmental goals that are to be introduced to his employees.
- Employees must be met and acquainted to new goals. Corporate goals should be reviewed during all-employee meetings which include specific data such as percentage increases and fiscal amounts the company should achieve by certain dates. Department managers should be asked to hold breakout meetings with staff members to review and discuss department goals.
- Surveys should be conducted to determine the incentives and benefits that are perceived as most motivating by employees. A list of several incentives should be created – from company or department parties to money and employees should be asked to rank the incentives, starting with the best.
- Incentive plan outlines that match goals to incentives should be designed using these employee incentive surveys. Incentives that are possible for all employees to achieve to the corporate-wide goals and individualized incentives to department goals should be assigned.
- Launching the incentive plan. The way in which employee inputs have steered the company’s goals and incentives must be discussed so that employees feel empowered and enthusiastic about meeting goals. A small handbook or handout that details the program and incentives may be generated.
Incentives can be given in different ways
- Job – Related Incentives: This is the least expensive incentive as it consists of items like additional vacation time. Such benefits are appropriate to firms which would allow its employees to take advantage of them. Other options in this category are a new cell phone, i-pad or an upgraded laptop. These kinds of incentives are beneficial both for the organization and the employees. The employees get new equipment which helps them to work more effectively to gain more results. The organization gains as such incentives motivate the employees to work more effectively generating increased sales.
- Tangible Incentives: Tangible incentives can be the most effective motivators if selected cleverly. To understand what reward would be suitable for the sales persons it is necessary to understand the profile of the people.
- Experience Incentives: This is the incentive which is based on experiencing a particular reward. This includes group vacations, team outing or expensive dinners. Such incentives not only reward high performers but also let them bond with each other.
Employee Evaluation
Employee Evaluation systems help managers in evaluating employee job performance and developing a fair system of promotions and pay increases. Further, this helps staff members in improving their performance, and assisting companies in reorganizing or devising job functions to fit the position or the employee better. Moreover, outdated or inefficient business practices may be revealed through employee evaluations. Effective employee evaluation systems improve the employer as well as the employee by incorporating goals, through the application of timely and appropriate training and feedback.
Methods of Employee Evaluation
The various methods used for employee evaluation are discussed below:
- Trait-Focused Evaluation System: This system centers on attributes like punctuality, helpfulness and dependability. Employees are rated by supervisors on the specific traits each employee exhibits. Trait-focused systems generally use a basic checklist with ratings of options like “excellent”, “satisfactory” or “needs improvement”. Such systems are usually popular with customer service departments. However, the supervisor’s personal bias and the fact that most of the employees end up with marks of “satisfactory” limits the accuracy and reliability of this system.
- Behavior-Focused Evaluation System: The behaviorally anchored rating system (BARS) judges employees’ actions using a rating scale to measure specific behaviors. Four rating scales are used in behavior-focused evaluations: graphic rating scales, behaviorally anchored rating scales, forced choice scales and mixed standards scales. Graphic rating judges behaviors on a sliding scale from excellent to poor. Average employee’s results should cluster in the middle, with poor employees near the bottom and exceptional employees near the top. Behaviorally anchored scales rely on very specific evaluators to score the employee’s actions as pass or fail. For example, does the employee answer the telephone with the correct greeting? Does he/she verify all customer information in the correct order? The forced-choice scale lists rankings of performance such as poor, needs improvement, average, above average or excellent with no other options. A mixed standards scale is a forced-choice scale with room for administrator comments.
- Unstructured Method: Older performance evaluations often relied on the reports of the supervisor to evaluate the employee’s personal qualities. This method relies directly on the subjective opinion of the superior rather than an objective rating scale. An unstructured evaluation might be just a comment or description by a manager to answer questions such as, “what is that employee like?” this is an unreliable method as it is contingent on personal rapport.
- Straight Ranking: In this method employees are compared to each other, and ranked from best to worst. While pointing out the best and worst performers is often easy, those in the middle can prove difficult to rank in order. A good example of straight ranking is a customer service center that gives points for completing service tickets. Employers often post ranks anonymously by employee number. Despite making the ranking criteria specific, the process remains subjective due to customer input, where ticket completion is not always in the employee’s control. This subjectivity renders straight ranking unreliable as a tool for specific employee evaluation.
- Paired Comparison: In this method each employee is compared to every other employee in a group. As it is based on systematic comparison and evaluation, paired comparison method is considered reliable. These comparisons are best suited for situations where only one employee will get promoted. Each employee is compared and ranked on various factors against the others until one individual stands out.
- Grading and Checklist: In the grading method, standard letter grades ranging from A to F are used in different categories to rate employees; while the checklist method functions by a list of objective yes or no questions such as “is the employee helpful to his peers?” etc. In both these methods, the specific standards are predetermined and defined as categories of evaluation.
- Management By Objective (MBO): Modern methods of evaluation attempt to remove the subjective bias inherent in traditional evaluative methods to some extent. MBO or management by objective evaluation requires the supervisor and employee to agree upon a set of objectives before the process of evaluation. This method depends upon setting of goal and constructive feedback for success.
- Psychological Evaluation: These appraisals evaluate the employee on the grounds of analytical skills, intellectual ability, emotional stability and other psychological traits through an objective psychological evaluation process. These assessments are useful in developing and preparing training methods, and for placing employees on appropriate teams.
- 360-Degree Feedback: In 360-degree feedback, the employer surveys colleagues, supervisors, subordinates and even customers about the actions of each employee. The multiple channels of feedback offer objective perspectives of behavioral traits and actions. From this kind of feedback, the employee is able to set goals for personal development that allow them to make progress in their career and benefit the organization.