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Compensation & Benefits

Steps to Create an Effective Incentive Program

James Feldman and Diane L. Landsman

1. Review Incentive History

• What did your company do?
• What do you know about the success or failure of the program?
• If you ran the same program today, would the results be different?
• If the winners were given the same reward for the same effort, what results would you expect?
• Did you receive suggestions or complaints that would make a similar program run more smoothly?
  

2. Define the Role of the Motivation Program

• Who are the participants?
• What end result do you anticipate?

3. Set Objective Measures for the Program

• Is the anticipated outcome measurable?
• Is it realistic?
• Is it attainable?

4. Create an Incentive Strategy

• What is the business objective of the promotion?
• What are the results you want to achieve?

5. Review the Objectives and Strategies with Management

• Make sure everyone on staff (including support personnel staff) is involved.
• Make sure all department heads understand the program before it is presented.

6. Determine Tactics and Creative Concepts

• What kind of theme or graphic representation should be used?
• How and when should the program be announced and promoted?
• Who will take the lead in presenting the program to employees?

7. Set a Budget

• What is the maximum potential cost of the awards?
• What should be budgeted for a communications/promotion program to support the awards?
• What will the administrative costs be for tracking progress for everyone in the incentive program?
• What about training (which is often neglected within incentive programs)?
• How can the education component be incorporated into the incentive reward?

8. Prepare the Specifics of the Incentive Program

• When will the program begin and end?
• Who will be the participants?
• What type of program will it be? The rules should be clear, simple and comprehensive, and you should anticipate surprises.
• Select a memorable, appropriate, simple, exciting theme.
• Choose the awards.
  

9. Implement and Track Program Results

• Assign responsibility for tracking.
• Provide reports to participants at each level, managers and executives.
• Fine-tune throughout the program.
• Monitor fulfillment of awards.
• Interview winners after they receive their prizes.

10. Debrief After Completion

• When the program is history, ask for feedback from all levels.