Staff Rewards And Incentives – Make Sure They Improve Your Bottom Line


Your staff incentive and reward schemes must reinforce what helps you, as manager or owner, to achieve your business objectives. Lots of businesses have incentives that unwittingly hamper business goals. Try this review.

Sales Incentives And The Bottom Line

Do your sales incentives offer the greatest rewards to staff who sell the product or service that leads to the most profit?  Paying flat rate commissions on most or all products or services regardless of their value to the business won’t help your bottom line.

“Doing” And “Done”

Design your staff rewards and incentives so that you cover both the incentive to “do it” and the reward for “getting it done”. For instance, you could reward telemarketers on a scale that offered $1.00 per name, $3.00 per qualified prospect, $5.00 for a confirmed appointment and $10 for an actual sale.

Systems Support Slips

Do your systems support your incentive schemes?  System barriers can make it hard for staff to gain incentives. Worse still, you could unintentionally reward performance that hampers the achievement of incentives.

Let’s say that you offer special incentives for reducing scrap and wastage. You need a system that enables staff to keep records of scrap and wastage simply and easily. Enable staff to earn the incentive without excessive paperwork.

You may provide incentives for maintenance staff for fast turnaround of repairs and return of repaired goods to customers. But if the turnaround is slowed by a poor dispatch and delivery system over which maintenance has no control, the effect and value of the incentive will be seriously impaired.

Watch Your Words

Watch what you say. If you talk constantly about production volume not scrap reduction, you’re likely to find that your scrap reduction incentive won’t reduce your scrap. What you actually talk about – production volume – conflicts with what you say you reward – reduced scrap and wastage.

Incentives And Teamwork

You can talk all you like about the importance of teamwork. If your incentive schemes reward only the performance of individuals, your teamwork “pep talks” will be virtually useless. And your staff will probably regard you as insincere about both incentives and teamwork!

Individuals should receive full rewards and incentives only when team goals are achieved. Use a sliding scale, depending on accountability for team goals. e.g. the incentive scale for a  “worker” may be 90% individual, 10% team: for a manager, 50% individual 50% team.

Reward Failure

Build in penalties for “failure” so that “success” is reinforced and made more desirable especially in satisfying your business success criteria. Let’s say that retaining customers is a top priority for you. Ensure you give the greatest incentive to staff who retain current customers, not those who lose current customers, while gaining new ones.

Not Just Money

Be creative about how you reward. Work to correct incomplete or poor work quality. A client employing tradespeople had a problem with “callbacks”. It was very costly. He offered the incentive of a paid half day off to employees who had no callbacks for two weeks. Callbacks reduced by 80%.

Incentive Creativity

You could reward safe working, repeat business, returns and reworks, maintenance, expense control and other areas as well as sales and production.


Rewards and incentive and business results are interdependent. When you emphasise this interdependence, you give an important message to your staff. Whatever you reward, keep the business aims foremost in your mind.

What To Do Now

Check your rewards and incentives against the points I’ve made. Note any that apply to you and take steps to fix them. Look at areas other than sales performance that you could reward. And consider non-monetary rewards too. If you need help with a specific issue please email me. And please leave a comment.

2 Responses to Staff Rewards And Incentives – Make Sure They Improve Your Bottom Line
  1. Mohammed
    January 11, 2011 | 5:36 pm

    great job, keep it up

    thanks a lot

  2. Leon
    January 11, 2011 | 11:35 pm

    G’Day Mohammed,
    Thanks for your encouraging comments. Always feel free to let me know what you think


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