Incentives – “To offer or not to offer that is the question?”

In the past at BMR we’ve played around with incentives with varying degrees of success, however we recently set our first big incentive which involved flying everyone to Koh Samui for an all expenses paid holiday. This gave our staff 4 days of extra leave, 5-star accommodation, a break from Aussie winter and a great end of financial year. Targets were set around hitting stretch targets or in Macquarie Bank terms, BHAG (Big Hairy Audacious Goals). For us, this incentive proved extremely successful and it made me wonder why so many of our clients don’t ‘rate’ or use incentives and ‘why’ it did work for us.

The most common criticism that I can find around extra incentives is that we are bribing people to do their job, which they are paid for anyway! I disagree. If you encourage something you get more, if you discourage something you get less. In my opinion, it is just a question of getting the key criteria around the incentives right.

Firstly, through luck rather than planning, we came up with an idea that resonated with everyone. Our team wanted to visit Koh Samui and the idea of a vacation really motivated them. Everyone enjoys socializing together, so it was an obvious choice.  Although, this incentive was specific to our team. Several industry peers and friends have commented that going on holiday with colleagues would be “their worst nightmare.” You have to pick something that your employees actually want and will enjoy! Otherwise it may well have the opposite effect.

Secondly, from a financial perspective, we identified a key consideration: The extra revenue generated more than paid for the incentive. It was completely “self financed” and was a win win for all.

So – when can incentives work?

1. When they are self financed and the extra revenue/value created more than covers the cost of the incentive.
2. When the incentive is something that the Consultants want. It needs to be something that really motivates to go that extra mile, to cancel Thursday night beers because they want to get some extra phone time in. For us as a small business it is quite easy to come up with something that motivates the whole team. For larger companies you might need to offer some choice.  Speak to your Consultants – ask them what they want.
3. If the level of the target is pitched right.  If the target is pitched too high and is seemed to be unachievable – it can actually have the opposite effect to morale and motivation.  Get buy in from the team to the target before it’s officially set.

To all recruitment business owners, this incentive gave us more than just strong revenue results, it increased company loyalty too.  Our guys love the generosity of us giving back rather than just pocketing the extra profits. The team dynamic has improved and team work has increased dramatically. From our experience, I can’t recommend additional incentives highly enough but be warned – it sets a precedent! My team can’t wait for me to announce what this year’s big incentive is going to be!!