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Incentive management plays an important role in motivating employees and boosting their performances to align the business goals. Incentive management includes designing, implementing and administering the program.
The program not only includes monetary rewards but simple offerings too such as recognition, appreciation, flexible work arrangements or career development opportunity.
Incentive management is a process of formulating design, implementation and administration of programs within an organization to motivate employees, boost productivity and performance and align the business goals.
Incentive management includes extra pay, rewards to employees that meet benchmarks or extra time off, this allows employees to inspire them and do better than their ordinary responsibilities.
Incentive management plans, also referred to as executive plans are specific programs designed to provide incentives and rewards to senior executives or management-level employees based on the achievements of business objectives.
The plans are aligned to the interest of executives with the goals of the company, motivating them to drive performances.
Various types of incentives are as follows:
Performance-incentive
Performance shares
Long-term incentive plans
Result-driven cash incentives
Management incentive plans are created to align the business goals with the performance of the employees with an objective in mind, which may include financial or non-financial incentives based on achieving specific targets.
General steps of management incentive plans includes:
Setting a specific goal
Incentive setup
Performance measurement
Calculation of incentive
Open communication
Incentive distribution
The responsibility for incentivizing upper management to meet or exceed goals lies with the business’s board of directors or leadership team. Here are some stakeholders involved in incentivizing upper management:
Board of directors
Employee leadership team
Human resource department
Compensation committee
Benefits of incentive management are as follows:
Increase productivity
Goal alignment
Talent retention
Better teamowork
Some of the incentive management softwares which helps boost productivity and align the performance with the goals are as follow:
Xoxoday Compass
Xactly Incent
Anaplan
Core Commission
These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).
Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.
eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.
