Incentive Plans for a High Turnover Environment
by Bill Collier
incentive programs. Bonus programs. Do they work, and really provide a
good return on investment?
sold on them. I have successfully used incentives and bonus programs in
my own businesses - particularly in my first company. But, that was a
medical electronics company with a stable workforce. What if you're in
retail or other high-turnover, short attention span industries – maybe
with a teenage workforce?
bonus programs run all year, with either a quarterly or year-end payout.
But if you have a high employee turnover rate, the incentive you're
trying to create goes out the door with each employee who goes away.
Even the folks who stay until the end of the year may not have a
long-range attitude, so it can be very difficult to get their attention
and to use bonuses to accomplish a change in their performance.
of your industry and regardless of the reasons why a year-long bonus
plan hasn't worked for you, try a shorter-range plan to get tangible
recommend a monthly theme or focus (choose the word that you prefer)
with corresponding targets and rewards. Here are two examples:
Customer Satisfaction Surveys
Target: Collect at least 50 surveys this month
Reward: Pizza & soda lunch
Flyer Offer Response
Target: At least 100 customers redeem the offer on this month's
Reward: $25 gift card for each employee
possibilities are endless, but here are some commonalities and issues to
you have more than one location, the target and reward can be for
the entire operation, or for each location. In other words, one
office might win and the other might not. A little friendly
competition between the locations is OK as long as it remains
positive. You'll have to decide how to handle rewards for employees
who move between multiple locations. Inside each office or location,
avoid competition and work to foster an environment of cooperation
you achieve a target and move on to the next month's focus, it
doesn't mean your employees can say "mission accomplished"
and now ignore the prior months' themes. You've now proved you can
achieve a certain level of performance in that area, and you should
reasonably be able to expect that level of achievement going
forward. This will take some education, reminders and maybe some
residual incentives to accomplish. For instance, if you hit a target
when it is the monthly theme, each person gets a reward. Going
forward, each time you hit that same target again, they may get a
smaller reward PLUS the reward for the current month's theme. Do
what it takes to avoid backsliding once you’ve worked hard to
achieve a target.
can be operational (like the examples above) or financial (revenue,
overhead expense, profit), but many employees will more readily
understand and relate to operational measures. Using financial
measures is good but plan on doing much more training to make them
meaningful to your staff.
themes that are critical to moving the operation forward – drive
out a weakness, capitalize on a strength or an opportunity, and so
having 12 themes - one for each month. Repeat every year, and change
the targets and rewards as appropriate.
can be money or non-cash, like movie tickets, food, or gift cards.
Mix it up.
the rewards in proportion to the target. Try to make this program
"self-funding" - which means the benefit derived outweighs
the cost of rewards. Don't get carried away with big rewards.
the program as a teaching tool. It’s a great opportunity to teach
your employees how the business works, how to help it succeed, grow
and make money, and how to solve problems. Show the employees a
“line of sight” between their work and the target.
it in the employee's minds. Create excitement and “buy-in” when
you roll it out, and use signs, meetings and emails to keep it front
and center as you go along.
everything comic book simple! Make it simple
for employees to understand and easy
for you to administer.
program like this takes a fair amount of thought and work to implement.
It should not take a lot of work to run once it's in place. Consider
having the employees measure their own results. In fact, have them
create their own “scoreboards.” Tracking their own results like this
has many benefits. It gets and keeps them involved, they learn about the
business, and it adds fun to the equation.
right and tailored to your company’s workforce, your employee
incentive program can increase revenue, productivity and profits while
reducing waste and employee turnover.
Bill Collier is a St. Louis-based
business coach, consultant and speaker. He is the author of the book “How
to Succeed as a Small Business Owner … and Still Have a Life.”
His website is www.collierbiz.com,
and his email is