Employee Incentives vs. Awards


Leadership Tip of the Month by Ron Jasniowski



Employee incentives and rewards are similar but different. I'm not a strong advocate for awards, because they tend to reward only top performers. This all too often has a negative effect on valuable employees who don't get the award.


However I am a strong advocate for incentives. That is compensating desired performance. Many managers have seen employees with performance and behavioral problems quickly turn around once there was an attractive incentive to do so!


In order for incentive programs to be effective, they must be setup properly. They must be simple for employees to understand (which behaviors are compensated) and they must be practical for managers to implement. There are many different types of incentive programs. Some offer a selection of gifts from a gift book, others simply offer monetary bonuses on a monthly basis. This tip will only describe the latter.

Rather than simply giving employees nominal raises on an annual basis (which for the most part were unmerited), I gave monthly monetary bonuses for meeting the following desired objectives:

  • Start and finish promptly each day: $60 max. per month

  • Competency (doing new tasks alone correctly): $50 max. per month

  • Personal calls not excessive: $35 max. per month

  • Speed (work completed within normal time): $50 max. per month

  • Remembering responsibilities & carrying them out without reminders: $80 max. per month

  • Sales/profit increase from year before: $10 per percent increase

The amounts of course will vary for how important the task is to your organization. The hardest part is figuring it all out and then presenting it to the employees. But once it is done, the benefits are great and ongoing:

  • Employees who were weak in certain areas, turn around.

  • Employees make more money and it is tied directly to performance/profits.

  • Morale improves as coworkers do their share of the work and everyone’s pay increases.

  • Customer service improves and profits increase!

Those of you who aren't in a position to implement something like this may want to forward this article to whoever is responsible for employee incentives.


Future issues will provide you with more details on how you can reach the next level of leadership success.


You may want to print this and discuss it at your next leadership team meeting.


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Ron Jasniowski specializes in training managers and supervisors at in-house training workshops and at leadership retreats around the country about character-based leadership skills. This helps managers develop the untapped potential in employees. Learn more from the services page or con.tact us for more information and a quote.


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