NU 12 - by KC, New Incentives for Perfomance

Hi Sir,

Here's my 5th NU 12 Blog-- changing our company's incentive scheme from monetary to non-monetary.

Thank you!

----------------

Crisostomo, Kathleen Lizette C.

ENTREP

NU 12: New processes at work

Every time a candidate endorsed by a recruitment firm gets hired, companies pay the firms an amount based on the salary offered to the candidate.  This makes the recruitment industry sales-oriented and in turn employees are also rewarded based on the revenue they generate for the firm.  To date, my company, Manpower Philippines, is the most generous company within its industry to provide incentives to its employees.  The company entails individual rewards monthly, quarterly and annual.  The goal of these programs is to align the employee's needs with the organization's goals.

Current Incentive Program

The main incentive program of the company is the quarterly commission scheme where upon meeting the quarterly target a recruitment consultant receives 15% of his revenue while a business manager receives 5%.  Aside from this, monthly incentives are given every town hall during the first week of the month for each division's top recruitment consultant and business manager with the highest revenue based on the number of hires.  At the end of the first and second half of the year, the company provides an all-expense out of town vacation to all employees who have met their sales target.  At the end of the year, the top performing business manager and recruitment consultant across all divisions will receive a cash bonus from management.

The preset rewards system, despite being very lucrative, is not necessarily motivating employees in a manner which leads to organizational values.  As important as the bottom line is, employees must also generate a commitment within themselves that they are providing employment opportunities not only because they want to receive incentives.  My proposed change in the business process is to modify the rewards system from a definite monetary scheme to a holistic, non-monetary scheme which drives achievement and responsibility.  All monetary bonuses should be removed and replaced with a new system of incentives.

Proposed Incentive Program

An accumulative "point-system" must be created to make employees goal-oriented and to instill that it takes one step at a time to achieve goals.  For every PHP X thousand worth of revenue, a recruitment consultant or business manager is entitled to claim an item for a certain number of points received.  Points can be accumulated up to the end of the year or may be redeemed once the points are enough to qualify for an item.  For example, 10 points is equivalent to an iPod Nano, 200 points is worth of revenue is equivalent to a Nikon DSLR Camera, or 1000 points is equivalent to a trip to a 3-day 2-night trip to Boracay.  Instead of competing with each other on who should be the number one performer of the month, the individual competes only with himself and he makes the decision on which prize he wants to redeem.  There should also be a Manpower Values Award given every end of the year to all employees (business units and support units such as accounting and HR) who have exemplified characteristics of model employees.  Additional awards such as Perfect Attendance for the Month / Year will also be covered.

Possible Results / Interventions

Removing the commission scheme and replacing it with a different program will work against tradition and it is expected that employees will disapprove in the beginning.  A possible intervention for this change involves a program initiative from HR since this involves rewards management and employee relations.  Apart from management, there should also be informal change champions within the company to help redefine norms and persuade others to focus on recognition, achievement and fulfillment at work instead of monetary benefits. 3.5