Masonry Magazine February 1995 Page. 56
Is Your Incentive Plan Effective?
MANY CONTRACTORS who are considering or who have actually implemented an objective, performance-based incentive program wonder how to determine its impact on their organization. The following are the hallmarks of an effective incentive plan:
Employees understand the plan and what they need to do to earn an incentive. In addition, they perceive it to be fair and equitable, and recognize that rewards are earned by producing results rather than by simply working longer or harder.
The plan pays out when it should. Though the impact of a plan in its early stages often is difficult to ascertain, once incentives are paid when they are expected there should be a marked increase in employee excitement. A first corollary is that incentives should be withheld when goals are not met. A second corollary is that the plan should provide immediate reinforcement (though not necessarily payment) for positive results.
The plan improves company communications. Employees become interested in the company's goals and objectives. Teamwork and cooperation replace the attitude of "it's not my job."
The plan captures employees' attention and influences their daily work routine. Employees are more aware of their activities and their individual contribution to the company's success. Additionally, employees are keenly interested in the cost, quality and safety of their work.
There is an increase in company or team performance. Whether it be profits, quality, market share, productivity, employee retention, or any other criteria, the ultimate test of the effectiveness of the plan is whether it has measurably increased the performance objective.
threshold, meet the major prerequisites of a successful incentive program. They reward employees for measurable specific results under their control and explicitly share the savings or excess profits based on a predetermined formula which may be adjusted for qualitative criteria such as safety, quality, and owner satisfaction.
If the following characteristics describe your business, a project-based incentive system may be right for you:
The type of work or projects undertaken is consistent in size, scope and contracting methods.
Project durations are not subject to large variations and typically last no longer than a year.
The company is labor intensive and there is an opportunity for significant productivity improvements.
The project manager is also involved in the sale and/or estimating of the project.
The project manager and superintendent are routinely part of a pre-job planning meeting at which the estimate is thoroughly reviewed and a revised budget is established, if necessary. In addition, the company should have a history of the budget being reasonably indicative of ultimate project performance.
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56 MASONRY-JANUARY/FEBRUARY, 1995