For businesses of any size, finding the right combination of incentives and compensation is difficult.
Different employees are motivated by different incentives. For example, the cash bonus that one employee values may be of little interest to another who prefers a few more days off. Gift cards, dinners and other perks are valuable to certain employees depending on their personal situations. Just as you spend time recruiting the right folks to work in your organization, spend some time to understand what will motivate your individual staff members.
Employees respond well to simple and immediate incentives. Complicated programs like points programs that build toward a reward work only when employees actively participate – and often get neglected once the novelty has worn off.
Tips on creating great incentives
If you want to recognize an employee for their extra effort you should do it as quickly as possible to reward those actions. You also need to articulate to all your staff what it was about that employee’s effort that merited the reward. An employee who lands your next big client should be congratulated when the contract is signed and recognized in front of his/her peers.
Keeping your incentive program spontaneous ensures that employees don’t expect the reward but are rather surprised when one does come after the fact. This keeps all your staff motivated to perform and truly appreciative when rewarded.
No matter how you choose to reward your staff, the value of the reward needs to be meaningful. This will vary based your business size, the pay of the employee and the value the employee has brought to your business. A $5 Timmies card might not be appropriate or appreciated by the employee who just saved your company tens of thousands in expenses.
When it comes to creating your incentives plan, keep it simple and relevant to the employee being rewarded. Making it immediate and spontaneous will ensure your other staff will be similarly motivated
Tracking incentives and benefits
Tracking these benefits is also important to ensure the right tax obligations are met. The PaymentEvolution pay rules feature allows you to provide your staff any number of benefits while accurately recording the incentive and associated taxes.
Let’s say you want to reward your top sales associate of the month with a new iPad. You’ve already determined that such a reward is meaningful to your staff and you’ve committed to presenting the reward at your monthly sales meeting. To ensure you’ve recorded the reward correctly as part of the employee’s compensation, you’ll want to create a pay rule.
- Login to your PaymentEvolution payroll account
- Go to Settings -> Pay Rules
- Create a custom benefit
- Now assign the rule to the employee that earned it
- The next time you perform your payrun, the employee will have the benefit added to their pay. If this is a one-time reward, you can remove the benefit after the run is complete in the employee profile.
It’s that simple – your staff will appreciate the incentive and you’ll be accurately recording their compensation and tax obligations.