Top 10 Ways to Set the Right Rules for Incentive Programs

Always start by defining a problem and setting goals that will solve it

roy saunderson large

Generating rules for effective incentive programs is essential for motivating employees and achieving successful results. The decision tree for establishing rules always addresses the problem, goal, behaviors, people, measurements, incentives, and outcomes. Consider these Top 10 Ways for Setting the Right Rules for Incentive Programs to help you.

1. Clearly articulate what problem you wish to improve through using an incentive program. What is the business goal for this program? What is the pain point you're struggling with? Defining the problem is half of your solution.

2. State the specific improvement desired from using a planned incentive program. What will the desired outcome look like? How will you know you've reached your goal? Creating a chosen end state will act as your North Star.

3. Identify the specific employees being targeted by this incentive program. Is the problem associated with a certain group of employees? Will it encourage these employees to go above and beyond? Make sure you know who's involved.

4. Define the desired performance in actionable terms so the performance can easily be measured. What exactly do you want employees to do more of? Or what do they need to do less of? This should narrow down the desired results.

5. Empower employees to have control over the desired performance outcomes. Do employees individually, or as teams, have the ability to perform well? Do they have tools and resources to achieve the goal? Help them reach success.

6. Ensure you're using the right metrics to measure the correct behavior or desired action. Incentives must be contingent on results that can be properly measured. Is it number of accident free days or number of safe practices used?

7. Determine an appropriate incentive that can be applied fairly to all targeted employees. Is your incentive or reward appropriate to the performance expected? Can you determine through metrics who truly merits the incentive?

8. Examine the criteria and processes of the incentive program carefully. Are you sure no part of the program would deter employees from doing the right thing? Is there risk of employees being incentivized for doing something wrong?

9. Consider best way to communicate incentives earned and distribution of incentives to employees. Have you set up communication channels for notifying employees who merit incentives? How, when, and who will deliver them?

10. Maximize the value of your incentive programs by making results visible to everyone. Do you publicize the contributions made by those who merited incentives? What's the best way to demonstrate the value of your program?


Incentive columnist Roy Saunderson is the author of Giving the Real Recognition Way. The Vistance Institute chief learning officer at Rideau Inc., Saunderson provides consulting, learning, and thought leadership services focused on helping leaders and managers give real recognition the right way. He can be reached at and followed on Twitter (@RoySaunderson) and at his blog.