Achieving targets through incentives

As well as earning their basic salary, staff in some industries – such as hospitality – often have the opportunity to earn tips. In other industries employees can boost their pay packets with commission, perhaps through the sale of houses, for example, if working for an estate agent, or by selling advertising space or products.

Incentives such as these motivate staff, increase sales and keep standards high for your customers. But what do you do with staff who are not client facing, such as Clinic Managers or social media/marketeers? How do you keep them incentivised and, in turn, maintain high standards and profit? What can you do for those staff to give them the opportunity to earn a little extra as a reward for their hard work?

What we decided to do was this. We had a £3,000 a year commission paid monthly in £250 instalments up for grabs. If the £250 target was not achieved, it didn’t roll over to the next month so there was just one opportunity to achieve that £250.

The way staff could earn this was by achieving targets. We set four but you can have as many or as few as you like. To decide how many targets you would like to set and what they should be, think about the priorities of your business and what you would like to measure. We had the following:

–         Total sales

–         Total retail sales

–         Vouchers

–         Courses

We used to say ‘sell a voucher a day and a course a week‘, and the way we used to split the £250 was as a percentage, so staff got £250 if they achieved all four targets. If they got the top one, Total sales, then they got 40 per cent of the £250, so £100. Then they could earn 20 per cent for each of the other targets.

They could achieve total sales and none of the others, or courses and none of the others, and still earn some extra cash.

What the target should be set at is for you to decide, but a good benchmark is usually four times an employee’s hourly rate.

It might seem strange putting aside cash like this, especially if times are tough at the moment, but incentivising staff really is worth the money and the effort as it will boost staff morale and sales, whilst also maintaining the high standards of your company. And remember, if targets are not achieved, it won’t cost you anything.