Effective Motivation:

Incentive Motivation

Reward Systems

Increasing Performance and Creating Happier Employees

Why Reward Systems?

The only way employees will fulfill your dream is to share in the dream. Reward systems are the mechanisms that make this happen. "However, reward systems are much more than just bonus plans and stock options. While they often include both of these incentives, they can also include awards and other recognition, promotions, reassignment, non-monetary bonuses (e.g., vacations), or a simple thank-you."⁵ "The journey is the reward," says Steve Jobs.

You Get What You Reward

The greatest management principle is that the things that get rewarded get done. "You get more of the behavior you reward. You don't get what you hope for, wish for or beg for. You get what you reward."⁷

When your employees do hit the target and meet a stretch standard you set for them, reward them immediately. Never stall. By doing this, you help employees directly connect the reward with behavior and higher performance they've attained.⁴ "Fail to reward the right behavior and you will most likely get the wrong results."³

Stimulating Entrepreneurial Environment

Your reward structures providing "a high upside for the success, and at the same time a downside for the failures help to encourage managers to stimulate an entrepreneurial environment."⁵

Linking Pay with Performance

Great managers create heroes in each role and link pay with performance. "They create broad bands for pay within each role. They also create overlapping bands of pay to encourage people to assess their strengths before moving to the next rung on the ladder. This means that a great salesperson could earn much more than a new sales manager who is yet to demonstrate performance in his role."⁶

Recognition and rewards are fundamental elements of any successful Idea Management program. They perform a number of important roles. Most programs now provide a mix of corporate recognition, career advancement and trinket-style gifts... More

 Case in Point  IDEO

IDEO's compensation is very competitive. They have a profit-sharing bonus, which is based on company profitability as well as on a specific studio's profitability. IDEO Ventures offers additional reward opportunities. The company work on so much great stuff that succeeds in the marketplace that it  makes sense for them sometimes to invest in their clients. They could put money in if it's a startup or they could negotiate a royalty agreement with a more established company on that product. An employee of IDEO receives X number of points in any venture fund that opens after hiw or her start date.⁸

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