Describe five of the guidelines for creating motivational incentive systems.

Question

What will be an ideal response?

Answer 1

Varies but should include five of the following:
Base all incentive programs on the company strategy and culture.
Make sure that the incentive program has some rewards for everyone--nobody should be left out.
Make the incentive program easy to understand and clearly communicate it to all involved.
Base the incentive on factors that the individual or group can affect.
Use SMART goals--Specific, Measurable, Attainable, Relevant, and Time-based.
Clearly separate incentives from base pay to avoid the question of entitlement.
Make the reward a significant piece of overall compensation.
Take great care in program administration to provide rewards in the amount owed, when they are owed.
Promptly apply any incentive award--immediate reinforcement works much better than delayed reinforcement.
Don’t forget to use nonmonetary rewards too--not everyone is motivated by cash.
Don’t reward nonperformers or you risk ruining the incentive system.
Make the incentive program part of a comprehensive approach to managing--pay attention to the entire performance of employees, not just specific behaviors tied to incentive payments.