Guest Commentary: 5 Things That Can Sink Your Incentive Program

Motivating employees to embrace different corporate programs can be complicated. And on top of that, the atmosphere around labor has changed due to new technologies and software, such as modern labor management systems (LMS), which claim to solve all workforce challenges. Running employee incentive programs can be hit or miss. According to ARC Advisory Group, 63% of firms using incentives programs reported gains of 10-30% in productivity, while others reported no change. In either case, the intrinsic factors underlying human motivation stay the same.

Operating executives cannot rely on these systems, automation or the diligence of a few outstanding employees to deliver all of the results their companies need to remain competitive and profitable. Executives need to become more involved and create a culture where employees feel motivated consistently, boosting productivity. Nothing happens in a company without people to drive it forward, so making sure that a good incentive program is in place so employees are motivated is extremely important.

Five Things Every Supervisor Should Avoid When Rolling Out Incentive Programs:

1. “We don’t feel the commitment from management
Supervisors work hard to attract and retain talented and dedicated staff. In order for this to happen, employees need to feel appreciated and know that they add value. There are many factors that contribute to this “perceived value” for employees: your company brand, operating conditions, wages and benefits, interpersonal relationships with supervisors, as well as the work itself. Supervisors should go out of their way to thank employees for good work and smart suggestions. When employees work hard, and they see the appreciation over time, they feel more committed to an organization. Supervisors also need to make sure their teams understand how their work contributes to the company’s success. Unfortunately, not all incentive programs are embraced. Too many times we see incentive programs haphazardly thrown together with policies, rules and concepts that frustrate employees and create conflict within work groups.

2. “We know how the system works—and we work it”
Employees are constantly evaluating their investment and effort against their reward, as well as comparing it with that of their coworkers. One big influencer of employee productivity is the notion of fairness. Take this example from a large direct-to-consumer operation. This operation had just rolled out a team incentive program. While the rewards were lucrative (some groups overachieved and banked incentive pay into the future), the overall perception was dismal. A company survey found that due to several structural issues and poor supervisor accountability, this team incentive program was highly disliked across employees. The ultimate goal of an organization is to increase value for the customer, so it’s only natural for an employee to ask, “What’s in it for me?” Celebrating success is the way to motivate members of a team to keep doing their best. Some ways to celebrate success include:

  • Thanking an employee for a great suggestion, especially in front of others.
  • Visible tokens of success, such as a pin that goes on his or her safety vest.
  • Hold a monthly drawing to reward employees for their participation in programs.

Through a rewards program, your employees feel more appreciated because you show them the value they add. This boosts their morale, which ultimately improves their performance.

3. You try to lead from your office
There is this idea that letting an LMS automatically sense and respond to real-time conditions in your workforce will make for a successful incentive program. For example, say a truck driver is taking longer than the LMS predicts he or she should be taking to complete a delivery. When this happens, an alert is sent, usually to the supervisor, alerting of the infraction. Does this mean that appointments or volume projections for the day are going to be missed? Not necessarily, and this is where the problem lies. While this idea works in theory, there are several problems with this type of system. First, real-time reporting gives managers the false sense of empowerment to run operations remotely. Secondly, the LMS does not take into account different factors that may be affecting the time it is taking employees to complete a task. Third, an LMS does not provide instant and valuable feedback to employees that only supervisors can give. Lastly, real-time reporting consumes system processing capacity – a precious resource in high-transaction environments.

4. Employees are faced with constant roadblocks
Many times in an operation, there are roadblocks that prevent employees from being productive and adding true value. This makes them feel frustrated and uninspired. It is important that supervisors create work conditions that are conducive to getting maximum results. For example, if one employee’s work interferes with the work of another employee and they are just standing idle waiting for the first to finish, this delays that employee’s work, which causes a ripple effect down the supply chain. A work environment should be designed so that an employee can be productive without someone else’s work interfering. An organization should provide employees with the tools and encouragement they need to be effective in their jobs. Employees should also be motivated to find efficiencies in their everyday work. This will improve the employee’s attitude because they will be rewarded and it will reduce costs for the organization as well.

5. Is this just another ‘flavor of the month’?
When implementing a new labor management and incentive program, it is important that this commitment be long-standing. This should not be an ad hoc initiative that withers away once management’s attention gets pulled in another direction. This needs to be a cultural change. Management needs to be engaged and committed to this change. A few things that show commitment are:

  • Having a quick meeting every morning to start off the day where management shares with employees the status of an operation and the goals they are expected to meet that day.
  • Having visual displays that keep track of daily performance.
  • Management coaching.
  • Monthly team meetings.

Running a Program Employees Will Love

In order to avoid these five things you will need three equally important weapons: credibility, objectivity and expertise. Companies that journey down the incentive program path alone are challenged internally in both the perception and reality of the program. Working with a partner that can implement an effective labor management solution with a proven rewards program can help solve that problem.

Overall, it is important that employees know that the organization has their best interests in mind; otherwise, the ramifications of implementing a poorly perceived program are far greater than the potential benefits. Your incentive program should foster a creative and collaborative environment, that all employees from the top down can experience a sense of pride and ownership.

Jeffrey F. Boudreau is Vice President Business Development, Global Retail Supply Chain Solutions for Ryder System, Inc. He is responsible for customer acquisition and marketing Ryder’s services to the specific needs of retailers and suppliers worldwide. Prior to Ryder, Mr. Boudreau was Managing Partner at XCD Performance Consulting LLC where he grew the firm to be a thought leader and innovator of workforce motivation and supply chain strategies for retail, pharmaceutical and other labor-intensive industries. Prior to XCD, Mr. Boudreau was a Principal and Director of Marketing for Supply Chain Services at Kurt Salmon Associates. A long-time contributor, writer and speaker on supply chain topics, he has been recognized as “100 Great Supply Chain Partners” by Supply Chain Brain and his work is nominated for the Chairman’s Award at Pfizer, Inc. Mr. Boudreau earned a Bachelor of Science in Industrial Engineering and Operations Research from Virginia Tech.

Comments

  1. This has got to be the most interesting and informative Guest Commentary ever on the issue of employee incentives. Jeffrey Boudreau has excelled in portraying his exceptional talent in the field of employee motivation.

    Anyone interested in taking the opportunity to learn from this article should spend time to think carefully about the savvy presented and not waste time in implementing Jeffrey’s wisdom, if only in part, to see the powerful messages coming through in what has been said. Start by thinking about this: “The ultimate goal of an organization is to increase value for the customer, so it’s only natural for an employee to ask, “What’s in it for me?”.

  2. Excellent article. Well written with specific steps. We are jsut starting a new program at our logistics software company. I will keep this article for reference. Thank you.

  3. Great article Jeffrey.

    I appreciate that you touched on the importance of thanking employees and intrinsically rewarding them. Sometimes dangling too many carrots creates a very self-interested workforce. If I get a $25 gift card every time I do something good, soon I won’t do anything unless I’m rewarded. Genuine appreciation and recognition go a long way in creating a culture that encourages improvement without too much competition.

    In addition – I appreciate your critique of LMS. Eventually, they will be very helpful, but I think they’re still too new to hold people to the fire over them. Metrics are important, but sometimes it’s better to stop analyzing statistics and go out and get something done.

    Again, thanks for the article.

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