Incentives are game-changers. Well structured incentives provide motivation, increase revenues and retain valuable and experienced employees.
When extended to customers, it helps to bond and increase retention and loyalty. It gives your customers at least one more reason to come to you and not to others.
As an entrepreneur, one of the greatest inspirations to wake up early, work hard sometimes skipping meals and sleep late without complaining is the realisation that your are working for yourself.
It is the fact that you are building your future and every sweat and sacrifice is adequately compensated unlike when you are working for someone else.
Thinking that your employee will have the same stamina and commitment without extra push beyond the normal basic salary and threats of sacking is too naïve.
Psychologists tell us that in all matters human, rewards and punishments are two most powerful tools of management. The two must be used in driving human change.
However, most firms and bosses try to use only one tool -punishment to both customers and staff.
It is unfortunate that what most employees get from their bosses is threats of termination of services if targets are not met, warning letters for mistakes done or days missed. Hardly do they get appreciation or compensation for coming early, working late or not missing any day.
On the other side customers get warnings: ‘Goods once sold are not returnable or exchangeable.’ ‘Check your goods and change before you leave our premises,’ ‘interest of X percentage per month is charged on late payments’ and so on.
To reinforce or correct a behaviour reward or punishment works well if done immediately. Best incentives in business are the ones done immediately.
End-of-year bonuses given to staff by some companies are good but if done to individuals monthly or weekly as a result of meeting targets, firms can get better results.
Probably you have heard of the old adage, “You can catch more flies with honey than vinegar.”
This article was first published on The Business Daily on January 15, 2018.