Happy Employees Create Profits
“From the earliest days of our founding, America has been the story of ordinary people who dare to dream. That’s how we win the future.
The first step in winning the future is encouraging American innovation. In America, innovation doesn’t change our lives. It’s how we make our living.” - State of the Union 2011, President Barack Obama
If you had the chance to catch President Obama’s State of the Union address last Tuesday, were you struck by his emphasis on innovation in American business? On more than one occasion in the speech. he mentioned the importance of innovation. As we move forward into the new year, it might be time for innovation in Human Resources.
After a few years of sluggish business, there seems to be a glimmer of light quietly announcing that business is bouncing back and companies are poised to start hiring again. This is prime time for Human Resources to re-evaluate employee benefit and compensation packages. Is your company plan attractive to a prospective employee? Is your plan competitive in the workplace? And how does a current employee’s package line up with that of a new hire? Your current employees have weathered the hard times of the recession by taking on more responsibility and often doing the work of one and a half to two people but collecting a single salary. Without your current employees dedication and diligent work, production would have decreased and company profits would have plummeted. As business rebounds, what are the company plans for the standing employees? Has your Human Resources Department considered preparing a proposal for CEO’s or Executive Boards to address changes in employee benefit and compensation packages for both new and existing employees? Does your company offer an Employees Incentive Program? If not, now is the time for innovation.
An Employee Incentive Program is an opportunity to create a win/win situation for employers and employees. It does not matter whether the company is part of a huge conglomerate or a small business; an Employee Incentive Program can become an effective change agent in any company. If implemented correctly, an incentive program can change the culture of a company from employer- dominated top down business to an all- inclusive, customer satisfaction priority organization. Employees want to be valued by employers. Time and time again successful companies have shown that customer satisfaction plus employee satisfaction equal company profits. Other positive consequences to establishing an incentive plan include improved employee morale, a productive company environment and better employee retention.
In order to create an effective Employee Incentive Program Human Resources needs to take into account the following steps:
- Purpose of the program
- Motivate employees to be productive
- Increase company profits
- Attract and retain best in the business
- Program Design
- Develop a committee including management, non-management and senior level employees and add HR representative
- Review current compensation packages, benefits and wages
- Review current employee incentives both formal and informal
- Develop an anonymous survey to ask employees about motivation, incentives, attainable benchmarks, views about employers, profit ratios
- Use data from survey to begin creating a company plan
- Develop incentives that are generic to your organization (examples)
- Performance pay (individual or team)
- Periodic monetary increments for exceeding benchmarks
- Time off with pay
- Profit Sharing
- Tangible Merchandise Rewards
- Company paid trips
- Employee Recognition in a public forum (luncheon, media)
- Implement an employee business solution
- Exchange business strategies with senior level management
- Pay and recognition for new idea to improve productivity
- Enlist senior level support for implementation
- Market to employees to insure buy in
- Communicate widely and often to keep employee motivation active
- Original committee including HR revisit program annually to measure effectiveness and adjust accordingly
- Manage the program up and down (Board or senior level to employees)
By using the steps outlined above, your Human Resources department would be taking a bold step to become an innovator in your company. Rarely is HR seen in this light but as President Obama says, “In America, innovation doesn’t change our lives. It’s how we make our living.”
To read more about employee incentive compensation ideas visit the APLS online store.
