2004 Spring/Summer Volume No. 3

Incentives

Faye Kelley
PolyJohn’s V.P. of Business Development
faye.kelley@polyjohn.com

A motivated workforce is the key to success for any small business. In fact, in a service business like yours, motivation may mean the difference between growing fast, or going slowly out of business. That’s because quality service is the primary difference you offer over your competition.

As the manager or business owner, you can do spot checks, but you don’t have time to follow your employees to check on everything they do. Ultimately, you need to trust that they will fulfill their own responsibilities, and be self-motivated.


So where do you find people like this?

Chances are you already have them. However, as their manager you need to provide the kind of work environment that motivates them to be their best.

Most managers rely on one of two techniques, the “carrot or the stick.” The “stick” is when you get angry at an employee, cut his or her hours, or threaten firing if he or she doesn’t shape up. Psychological researchers have proven time and time again, that this kind of management style makes matters worse. Employees tend to become “passive aggressive” which means they fight back by doing the minimum required to keep their jobs—all the while keeping an eye out for a better job elsewhere.

The “carrot” is the reward employees get for a job well done. For example, you might give drivers with excellent service records raises. You may have an incentive or bonus plan for drivers who pass all their spot checks and get very few customer complaints. You might pay drivers who service faster more money with incentives built in for quality.


Incentive Programs Impact Motivation
and Improve Performance

According to experts, effectively structured incentive programs can increase performance by up to 44% in teams and 25% in individuals. With this kind of potential gain, it’s clear that companies should spend more time constructing incentive programs and working continuously to fine-tune their effectiveness.

For example, Gary Phillips of Tidy Services, Roanoke, VA, pays incentives based on the number of toilets cleaned. He found that some drivers would occasionally only freshen a toilet that was hard to get to or lightly used, without pumping it and giving it a thorough cleaning. However, by basing his incentives on whether or not a toilet was actually cleaned, he finds that drivers will go out of their way to reach even difficult placements. Also with this incentive plan, pay goes up significantly during the busy season. Drivers don’t seem to mind working harder and faster when they see the results at the end of the pay period.

Gary also offers drivers an extra $25 per week safety bonus. Drivers who get speeding tickets or cause fender benders can have this bonus taken away temporarily. “Once I began paying the safety bonus, I saw accidents and speeding tickets go way down. So I think it’s working,” he said.

Many businesses have great success with cash incentive programs. However, if you run a program like this, you need to be careful how the incentives are given out, how they are perceived by your workers, and how they are taken away from employees who don’t meet the requirements.


Managers need to provide the kind
of environment that motivates employees
to be their best


Employees may begin taking financial incentives for granted. They may start to expect the extra money in their paychecks and get angry if they don’t receive it. An incentive taken away has the same negative effect on performance as any other kind of punishment or reprimand. A dissatisfied employee may lose motivation after he has lost an incentive.

Another problem with money rewards is that individuals with families may never see the reward themselves. Money quickly disappears in paying bills or buying new shoes for the kids.

Rewards don’t have to be financial in nature, such as bonuses in the paycheck to be effective. You may also get good results with an incentive gift program. Small gifts that are easy to hand out might include things like certificates for free meals, tickets to sporting events, movies, or other local attractions. You might want to give out smaller gifts like these whenever a driver gets a compliment or favorable report from a customer.

However, be wary of handing out visible gifts in front of other employees who are not receiving them. You may motivate the one employee receiving the reward, at the risk of making others frustrated or jealous.

Another alternative incentive program is to create a point system. Points could be roughly equivalent to dollars, but have no true cash value. Employees save their points each month until they earn enough to cash them in for prizes.

This kind of incentive program can become highly personalized. For example, before you start the program, you can sit down with employees individually and ask them what special reward they would want. It might be one employee’s dream to have a small fishing boat, another might dream of having a home entertainment system, another might want the ultimate stereo for his car. As the employer, you get to play Santa Claus by helping them achieve these dreams through the incentive program.

Explain to your employees how they earn points, help them calculate how long it will take to get what they want, and keep a board in your office to help them track their progress.

Another good thing about a point system is that it tends to improve employee retention because they can’t take points with them when they leave. If an employee is two months away from achieving his or her “dream” incentive, they are unlikely to listen to offers from other employers. If they achieve their goal, you can help them get started on something else right away.

It will always be easier to satisfy customers and gain new ones if your units are always sparkling clean, sweet smelling, and serviced on time by highly motivated service drivers.

Cash incentives, small gifts or point systems have all helped companies motivate their employees. However, no incentive program will motivate employees if they don’t see it as being administered fairly and according to a set of predefined rules. Be sure all your employees understand the program before you start, answer all their questions, and provide the ground rules for them in writing.

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