When someone mentions the word incentive, oftentimes in the next breath comes the word money,” says Wayne Richards, CCLP, vice president and COO of Cagwin & Dorward in Novato, California. “Unfortunately,” he continues, “the words incentive and money have become inseparable over the years. Even more unfortunate is how these ‘money’ incentives are used, in many cases, to inspire performance that should be expected in the normal fulfilling of a job description. If an organization has to give an incentive to get someone to show up for work on time, to do a quality job, or to take proper care of equipment, then it probably has a training or behavioral problem that cannot be solved with a monetary incentive.”

With more than 30 years in a company leadership role, Richards has seen and been part of many incentive program failures. “Not to say all monetary incentives are failures. They can be effective when used to reinforce a desired behavior or to reward discretionary effort, such as delivering extraordinary value to customers. For example, we have spontaneously handed out Starbucks cards or gift certificates to reinforce a desired behavior. We have also recognized a good safety record through praise and the frequent reward of inexpensive gifts, (e.g., coats, hats, coffee mugs, coolers, etc. — all with our company logo and a reference to safety).”

Generally speaking, though, Richards has found that money incentives and small gift giving have a very limited range of effectiveness. They can be used to enhance awareness or reinforce behavior, but they are less effective when used to change behavior or to get employees to buy into the bigger picture. “To achieve these results,” he says, “we look to a different genre of incentives, ones that are less topical in approach and oriented more toward reaching long-term goals.”

The following are just a few examples of incentives that Richards suggests companies can use to achieve their long-term goals.

1.       Be a great boss, trainer, and mentor. Provide a learning environment where employees can realize a career with opportunity.

2.       Invest in continuing education by supporting employee certification, reimbursing them for independent study, and encouraging them to participate in trade association meetings.

3.       Allow employees at all levels to get involved in decision making. Employees today want to be involved. Create an environment where they are empowered to make decisions and allow them to make mistakes during the learning process. Praise those who have the courage to share their mistakes with others. By encouraging employee participation, owners and managers are also making life easier for themselves.

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