Incentive Pay

1. Setting Objectives

Design your incentive pay scheme to achieve specific objectives.

Your targets should be 'SMART' (specific, measurable, achievable, realistic, time-limited).

1.1 Decide what business results you want to achieve. For example:

• Hitting a certain sales target during a sales campaign for a new product.
• Specific improvements in customer service.

1.2 Decide which employees should take part. For example:

• A specific group of employees, such as the sales team, whose work directly influences the result you are aiming for.
• The management team, so you can retain the key individuals your business needs.
• All employees, to raise general productivity and morale in the business.

1.3 Decide how long the scheme should run.

• If you want to concentrate on one particular result, limit the time. For example, until a backlog of orders is cleared.
• Consider adopting a scheme as a permanent part of your business' culture.