As an incentive program planning and production company, the Maxxus Group is often asked by our clients to also manage their performance benchmarking plans in the hope that the affected employees are assured of some degree of impartiality compared to when the process is handled internally (either by the departments directly involved or by the HR department). While there are many approaches to performance benchmarking and the literature is rich with different concepts, theories, and methodologies, an informal survey of our clients indicate that most companies prefer a simple and streamlined process to maintain the transparency of the process.
It goes without saying that incentive programs represent great and unique opportunities to motivate driven employees to strive for higher achievements (whether in performance or in measurable contributions to the corporation’s goals). As counsel to many of our clients in designing their incentive programs, we take a rather simple and transparent approach to measuring performance that can be subject to an incentive program. As such, we take a somewhat narrow approach to benchmarking performance—as opposed to HR-driven perspective.
While a wide range of parameters can be used to measure employee performance, a balanced and well-designed incentive program must at least meet criteria that are universally agreed up by key stakeholders. They include:
· Individual goals
· Corporate goals
· Health & Safety goals, if applicable
· Client satisfaction metrics
· Peer reviews (in team structures)
It is universally agreed that incentive programs are commonly designed to attract and retain talent and boost employee productivity and morale. However, they can also be used to enhance employee loyalty and engagement—which in turn can be viewed as a competitive weapon vis-à-vis company’s competitors.
In our benchmarking assignments, we have developed a matrix of factors to be taken into account when measuring employee performance for eligibility for the company’s incentive program (which may be in multiple forms including cash, incentive trips and other forms of reward). The pillars of our matrix are a set of internal and external criteria that are taken into account when we design an incentive program for a client. Some of these key criteria include:
Internal:
motivation factors
performance enhancing factors
personal goals vs. corporate goals
measurable goals by department and by individual
quantitative vs. qualitative goals
External:
industry norms
competitors’ plans
shareholder values (especially in public companies)
Summary:
Incentive programs represent a unique and huge opportunity for progressive companies to motivate and extract above-average performance from among its driven target personnel. Such programs have the potential to create an environment that attracts highly motivated employees to a company. To design an incentive program that is both effective and is perceived to be impartial is a key challenge for most companies. While some elect to carry out the Herculean task of designing a benchmarking system on their own, many companies shy away from this task so as to avoid any perception of bias. The latter companies opt to retain the services of an incentive design company to ensure that their program passes the test of objectivity. The Maxxus Group has been recruited by many of our clients to help in the design of a forward-thinking and proactive benchmarking process to identify those employees that would be entitled to the company’s incentive compensation plan including goal setting and performance against established goals.