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Are there any pitfalls to Employee Incentive programs?
Home » Management » Employee Incentives » Are there any pitfalls to Employee Incentive programs?As previously mentioned, if you give a cash gift, the recipient will have to pay taxes on that money. Yes, you’re still giving a gift, but it’s not as large of one, and it’s a hassle for the person you’re supposedly rewarding to have to deal with taxes. Employees will appreciate the money—but will they remember your goodwill in giving it, or the fact that a third of it went to taxes and the rest was used to pay bills?
Also, studies have found that employee incentive programs can sometimes foster ill-will, cheating, an unhealthy competitive spirit, and dishonesty—far from the desired effect. When employees compete to be the first to land a big account, make the most sales, or retain the most clients, for example, there’s a possibility for them to use underhanded techniques to meet your criteria. When others see this happening, the good morale and team spirit you’re striving for goes out the window. Also, if you’re using employee incentives as a way to discourage accidents and injuries on the job, you may just be pushing employees to hide accidents—or to push their co-workers to do so, so they can get their safety bonus. Setting clear rules about how employees meet the criteria and watching for any signs of employee incentive program abuse will help keep everyone honest.
Lastly, some companies find that incentive programs don’t work for the long haul. For example, some people are inspired by competition. You ask them to sell the most books, they’ll hustle all over the place to come in first place. But as soon as the competition is over, they’re back to working at a snail’s pace. And keeping an incentive program in place year-round may require lots of effort on your part—promoting the program, reminding employees to work for the goal, changing things around to keep them interested.
Think about how your employees work when deciding whether an employee incentive program is right for your company. Will short, frequent competitions inspire them, or will they drive employees to dishonesty? Do you want employees to work to better their own goals, or are they working against co-workers?
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- Are there any pitfalls to Employee Incentive programs?