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Incentives That Really Reward and Motivate

June 6, 2001
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Related Topics: Recognition, Featured Article
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As a company's major incentive, a gold watch after 30 years of servicedoesn't cut it anymore. Given the ups and downs of Wall Street, stock optionshave lost much of their motivational luster. And in a soft economy, there maynot be enough extra cash for bonus plans, especially in smaller companies.

    So what's an employer to do to motivate and reward employees? Surprisingly,market-wise companies that are serious about satisfying and retaining employeesdon't seem to be making any changes at all. Despite uncertainty in today'sfast-paced global economy and tight labor market, recognition and rewardprograms are more important than ever, says Kimberly Smithson, president of theNational Association for Employee Recognition and a consultant for CultureWorx,experts in behavior-consequence management.

    Incentives are essential in order to keep top performers satisfied with theirtotal compensation packages, says Frank Belmonte, HR consultant and principalwith Hewitt Associates LLC, global management consultants. It will be thestandouts who will play key future roles in nurturing new growth and rebuildinga company that's on a slide in a soft economy. Businesses simply can't afford tohave talented people jump ship.

    Phyllis Eisen, vice president of the Manufacturing Institute, the educationand research arm of the 14,000-member National Association of Manufacturers,says it can cost even a small company $3,000 to $5,000 to train an outstandingemployee.

    Incentives and bonuses can be in cash, performance-based pay or bonuses, cashequivalents like travel awards, or benefits such as employee training. Eisensays employee training is the biggest retention incentive in the workplacetoday. For companies willing to settle for average and competent people, anordinary incentive/rewards and compensation program will suffice, Belmonte says."But, if you're an organization that really is looking for opportunities tomaximize growth and impact your financial results, and you're looking for the Aplayers, then you really have to have a huge tool belt of offerings in yourtotal compensation program and it has to be competitive." Incentives andrewards are an important part of that equation, he says.

    Here's how three different-sized companies deal with the issue.

Workforce, June 2001, p. 108 --  SubscribeNow!

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