How to Change an Incentives Plan

Is your staff incentive plan no longer driving the benefits you need for the business?

You’re not alone. Incentives shouldn’t be a set and forget activity. Your strategy and direction often change as environmental factors cause you to change direction. When this happens, you need to review all of the ways you’re rewarding your staff to ensure you’re driving the right behaviours.

Changing an incentive plan can be difficult, especially if it’s been in place for some time and your team members are used to it. So before you send out an email announcing the changes you’re making, run your eyes over these tips to ensure you’re not going to get resignations as a response.

Provide the Bigger Picture

Whether you’re cutting back on incentives or broadening potential earnings, you need to provide context to your actions. The best place to start is with the company strategy. What is the business looking to achieve? Is it growing market share, reducing lapse, or something else entirely? The incentives plan should support these goals.

Taking this approach also gives your staff an idea of how they can contribute to the organisation’s success. They will also see how they will be rewarded for their efforts. It provides better alignment and should also increase staff engagement.

Gather Input

Even though you might think you have created the best incentive plan ever, avoid setting anything in stone until you’ve gathered input from your staff. If you can’t speak to every team member, reach out to a collection of high, middle, and low performers. Alternatively, use an anonymous survey to get feedback.

You need to remember the incentives plan is for them. It’s to motivate your people to help you achieve business goals and objectives. If it doesn’t connect with them or if they feel it isn’t worth it, then all your hard work will be for nothing, and the company will find it hard to meet any targets.

Set a Timeframe for the Incentives Plan

One of the biggest mistakes you can make is creating an incentive plan and then forgetting about it. When rolling it out to your team members, explain that it will get reviewed in 12 months when the company strategy is updated. If there are no changes besides higher targets or metrics, then you may not need to adjust much. But if the business goes in a different direction, then you need a new incentives plan.

It might be a good idea to provide staff with a calendar, so they know when reviews will commence. This will encourage them to give input and feedback to help you shape the new plan when the time comes to update it.

Demonstrate the Potential Earnings

The most powerful image you can show team members is their potential earnings. Compare old versus new plans. It doesn’t necessarily have to demonstrate that they will be better off financially. But you need to show that they’re not going to be worse off, or it will be more challenging to achieve bonuses.

However, be sure to describe the factors that led to these potential earnings. For example, specific marketing campaigns or other anomalies that contributed to the results. Take a page from investment ads and explain that past performance doesn’t guarantee future results.

Keep Your Staff Engaged With the Right Incentives

Staff incentives can be a great way to motivate your employees. However, the plan and results need to align with your business objectives. If they don’t, then it’s time for a change. Treat it delicately and with respect, and you’ll get the outcomes you need.

If you need more ideas to motivate your team members, then make sure to follow the Better Boss Blog. You’ll find tips and tricks on how to keep staff engaged. Follow pwf services on Instagram, LinkedIn, and Facebook, so you never miss a post.

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