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Incentive programs need to be adjusted for economic reality

Organizations need to reexamine their employee incentive programs periodically to keep them effective.

When the economy is growing quickly and businesses are performing well it can be easy to keep employee enthusiasm high. However, few companies constantly find themselves with enough cash to accomplish every single one of their goals. This is why many organizations need to reexamine their employee incentive programs periodically.

Lexology states that programs designed during peak performance periods may not remain effective during downturns in the economy. Not only do companies have less cash on hand to provide bonuses and salary increases, but the figures used to measure performance may no longer be relevant. This is especially true with sales incentive programs. During recessions customers are watching their spending, making it tougher to complete sales. Quotas and sales goals that were easy to accomplish during periods of success may now no longer be possible.

Taking the time to reexamine and reset sales goals can keep employees motivated, which will lead to additional transactions. If staff members know that their sales target are reachable they will stay engaged, boosting performance. While adjusting performance measures, firms may also explore how employees are rewarded. Finding cost-effective ways to provide motivation can lift the overall performance of any department.

Moving beyond bonuses
While cash bonuses may seem an good way to encourage participation in incentive programs, the source notes that non-financial rewards can be more effective. Employees will come to expect more than a simple bonus. Recognition is often a simple way for companies to acknowledge the hard work of their staff members without a lot of additional expenses.

The Huffington Post reports that showing appreciation can build a positive culture that engages workers and pushes them to accomplish more. A manager or owner who takes the time to express thanks publicly to a handful of employees may see an increase in performance in all workers, as it sends a clear message that their accomplishments are appreciated.

As part of the recognition, personalized rewards can make a big impression on the workforce. Allowing workers to choose a reward from a selection of merchandise can give them what they want while keeping costs down for the company. These trophy rewards serve as a reminder of the accomplishment every time it is used, creating a longer-lasting effect than simple cash bonuses.

Companies need to continually adjust their approach to building employee engagement based on market conditions. A recognition scheme designed during one economic period is not likely to maximize performance in another. Whether it is providing employees with raises or creating public recognition programs, businesses need to continually adjust their management approach.

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