One of the ways to get ahead is to set up programs meant to make improvements to your workplace as the year begins. Today we’re analyzing incentive pay programs and how they affect the well-being of employees and the company overall. Incentive pay programs are said to be an increasingly popular supply chain initiative that aims to increase productivity without needing any capital. It motivates employees to perform at their best level even during tasks that may be difficult and through long workdays.
A problem that may arise, however, is that an incentive program can reveal an unfavourable effect if not properly planned and executed. It may happen for example that employees feel that the incentives they are aiming towards are out of reach no matter how hard they work or may think that other colleagues are instead better suited for success based on guidelines the incentives has set. To avoid this and to ensure major impact by incentive programs, here are seven strategies established by enVista’s Senior Director, Tom Stretar.
Understand the need
The first step is to understand the need for an incentive program. Take into consideration the common who, what, where, when, why and the how. Establishing and understanding the responses to these questions will help you align the behaviours you aim to reward with the details to develop regarding the incentive programs. Clear answers make certain that your program is set up to achieve optimal impact on your employees’ performances.
Get employees involved
When developing the framework of an incentive plan, it is always crucial to gain perspective, interest and understanding of the employee. The three most common types of incentives used are paid time-off, rewards and additional pay. To find out which type of incentives will motivate employees to perform above normal expectations, conduct focus groups and questionnaires – they are the most successful methods of gathering information.
Keep the program simple
This is a factor that ties to our pervious point. A plan’s framework needs to be simple enough for employees to understand it. This will then result in a higher implementation success rate as opposed to complex incentive plans that will not achieve the desired results. Communicate the plan clearly to your workers and make certain to introduce the program during project kick-off meetings or at the start of a new quarter or year.
Include all employees
Avoid leaving out specific employee workgroups when developing the incentive plan. Programs that do this will only lead to jealousy and resentment within the organization amongst the staff members. Remember to include supervisors too and be creative with individual and team incentives.
Use work methods and labour standards to evaluate employee performance
An incentive plan needs to be based on a solid foundation comprising of preferred work methods and engineered labour standards. An employee observation program should be developed so that each employee is able to be reviewed on a frequent basis and can be tracked in terms of where they are in achieving set goals.
Offer rewards for direct work
In your program, reward work that supports movement of goods in the facility. This includes processes such as receiving, transport, putaway, replenishment, picking, packing, shipping, etc. Indirect work such as cleaning, meetings or prep activities on the other hand should not form part of the incentive plan as it promotes a lack of motivation to complete work in a timely manner.
Utilize existing systems to track rewards
Avoid having employees fill out daily production cards. What should happen instead is that workers should use existing systems such as the Time and Attendance systems and the Warehouse Management System (WMS). Export the data to the in-house payroll system for monetary based incentive programs.
Now that you are clear on how to set up incentive programs successfully, here are 5 Pointers On How To Build Effective Logistics Training Programs!