"The worst mistake a company can make is to take another company's incentive plan and assume that it will work just as well in their shop."

You Can Quote Us On That.

Incentives are designed to change behaviors and to reward specific activities and results.  What you do and how you do it must fit in with the culture and the capabilities of your organization.  You can't (successfully) just lift an incentive program out of one environment and plunk it down in another.  Do it right.

What's the first step?

Decide essentially what you want to accomplish and create a decision-making group charged with getting it done.  Give us three hours with that group.  We'll discuss the potential pitfalls and pratfalls and ask a whole bunch of questions that have usually not been thought of yet.  

If you still want to go on...

We'll be happy to help you design your program and to get it instituted, as well.  We're always ready to discuss the extent of our involvement.  Remember, anything that can be measured, can have an incentive attached to it.   

Incentives vs. Bonuses vs. Pay for Performance vs. Commissions

Which do you have?  Which do you want?  Perhaps what you have isn't doing what you want because it's the wrong alternative for meeting the objectives you've established.  In brief...

Incentives reward people for doing something differently than they've done it before.  They can be short-term or long-term programs.  "We'll pay you to change" is what you are telling people.

A bonus is just that--something extra that you get for some reason.  Generally, a bonus is paid because the company has done well.  The recipient is seldom in control of whether or not they are paid a bonus.

Pay for performance sets standards of achievement and rewards people for reaching those standards.  It is often a major component of the total compensation package.  To be effective, the achievement of the standards must be in the control of the participant and/or the people he or she supervises.

Commissions are generally received upon completion of a particular task, e.g. making a sale.  We seldom see commissions paid in the banking world outside the retail investment and mortgage lending areas.  Commissions are generally designed to represent the majority of the individual's compensation.