When you introduce an incentive plan, do you get the results you expect?

Scripture: The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty (Proverbs 21:5).

Today’s Thought: A key business principle for managing a staff is that you will get the behavior you reward. If you want to motivate employees to produce specific results, you must connect the proper incentives to the desired outcome. This takes careful planning.

Don’t be too quick to change your compensation structure. First, thoroughly analyze the behaviors and results you want from your staff. For example, which is more important for your sales department: gross revenue or margin? If the best indicators of success for your business is gross revenue, tie the commission structure for your sales force to gross sales. On the other hand, if some products are more difficult to sell but are more profitable to the company, consider raising the commission value of these products.

On the manufacturing side, if quality is your main concern, consider tying bonuses or raises to increases in quality. Likewise for productivity. No matter what your priorities are, carefully planning your incentives will lead to greater profitability.

The generous man will be prosperous, and he who waters will himself be watered (Proverbs 11:25).

Carefully planning your incentives will lead to greater profitability.