We’ve been discussing the Ownership Thinking (OT) system and the keys to turning workplaces of poor-performing or disengaged employees into motivated, passionate and profit-focused team players.
But what we haven’t covered are the incentives necessary to make that happen.
We should start by mentioning that most incentive plans fail because they’re often complicated and tied to financial results that employees don’t understand. Some are tied to obscure performance metrics, while others are made nearly impossible to attain—sometimes on purpose.
Some are built around effective profit-sharing or share purchase plans, but no matter the structure, incentive plans should be relatively simple for employees to understand and employers to administer. When they become overly complicated, they no longer serve their purpose and become more burdensome than helpful.
So, what kind of incentive program makes sense? The short answer is that it depends on your industry, business structure and even workplace culture. My advice to CEOs is to ensure that any incentive plan they implement is tailor-made to their environment. OT is the perfect system to achieve that goal.
OT utilizes cutting-edge methodologies to create incentive plans that are self-funding and clearly aligned with business objectives. In addition, the system provides employees with the education and tools required to become actively involved in funding their plans, while ensuring that bonuses don’t just become another form of compensation and remain an incentive payment.
What are the elements of a well-designed plan?:
They have perceived value—Ensuring that employees actually want the incentive on offer may seem rudimentary and obvious, but it’s a point that eludes many a business owner and manager.
They have shared targets—When everyone is working towards the same goal, businesses succeed. Miss this point and silos emerge where employees become focused one thing and one thing only: their own personal financial gain and not the company’s.
The goals are understandable—Again, a simple point, but if people don’t fully understand what they’re trying to achieve collectively, it’s difficult for them to take the right steps to reach those objectives.
The goals are ambitious, but attainable—Employees need to be challenged, but they also need to see the light at the end of the tunnel. The surest way to kill an incentive program is to make it impossible for staffers to eventually profit from it.
They clearly align employee behaviour to business objectives—Transforming worker behaviour is what good incentive plans are designed to do. By tying their everyday actions to drive business success and growth, employees will have a clear understanding of how they can use their OT tools—they’ve been taught to think and act like owners, after all—for the company’s benefit.
As we’ve seen in countless examples across North America, Ownership Thinking can turn good businesses into great ones. It just takes a strong foundation built on key pillars such as effective incentive programs to make it happen.
Until next time,
Perry Phillips, President
Ownership Thinking Canada
Visit www.ownershipthinking.ca to learn more about Ownership Thinking Canada.