Incentive Plans for Employees: Driving Performance & Success

What does employee performance really mean?

The next time you are in a meeting with your peers, ask each person to describe employee performance. Inevitably, the answers will vary from one person to another, and if you ask the same question in a different group setting, you will continue to get more items to add to the list.  Is it about time management? Quality and quantity of work? Client satisfaction? The truth is that performance looks different in every organization and every discipline.

That variability makes one thing clear: attracting, motivating, and retaining top talent isn’t just about base pay and benefits anymore. It’s about building incentive plans for employees that truly connect performance with organizational success.

The Key to Incentives is Understanding Performance

At its core, employee performance is defined as the accumulation of ideas and abilities used in carrying out certain work to produce various outputs by existing provisions of the organization. An employee’s effectiveness and efficiency in carrying out their responsibilities (Digital Behavior and Impact on Employee Performance: Evidence from Indonesia).

When companies do not have standard operating procedures (SOPs) related to performance, there is more flexibility, freedom, and potentially inconsistencies in how the work is performed.

How employees use their time, the expected quality and quantity of work, and the way in which the work is performed will vary from one organization to another and even from role to role, and project to project.  It’s definitely not one size fits all.

Think about it:

• The work for a project manager who designs buildings for a franchise restaurant is often repeatable from one location to another, requiring minor regional adjustments for local culture, building codes, etc.
• The work to design a music hall in one city will have a unique set of stakeholders and a vision that can vary significantly from those in another city.
• The type of engineering needed to design a bridge versus a high-rise building is distinctly different.

In all of these scenarios, each role requires unique talent and motivators. Without the right incentive structures in place, leaders risk disengagement, turnover, and missed opportunities for growth. While I am not an engineer or expert on what it takes to execute these projects, what I do know is that each requires a certain level of talent with its own combination of knowledge, skills, and abilities.

Why Incentives Matter More Than Ever

Keeping and finding the talent that is naturally motivated to perform each type of work is more difficult than ever before.  Conversely, if someone isn’t naturally excited about their work, the incentive to reward the individual may not yield the return on investment needed. When critical incentive components are in place, it is so much easier to elevate performance.

Leaders today are challenged to retain high performers in a competitive market and simultaneously push teams to deliver greater value. As a leader, it is important to have the right people on the team and to know the levers that can be adjusted to elevate their performance.

Increasing efficiency, pushing people out of their comfort zone with a creative challenge, taking risks, adding new services, etc., are all examples of ways that organizations can move the needle on performance.

Getting specific about how each employee will help achieve their goals can then be used to measure the increased performance and ultimately help define the criteria for a successful incentive plan.

Next Steps

How do you design an incentive plan for employees that works? One that drives measurable results instead of just adding cost. That’s exactly what we’ll cover in our upcoming webinar, Compensation Reimagined: Incentive Plans that Drive Success.

Don’t miss this opportunity to learn how to leverage incentive plans to accelerate performance while rewarding the talent who makes it all happen.