Incentive programs are a worldwide business strategy, and Canada is among the countries who take advantage of rewarding employees to foster motivation.
In a recent study, conducted between January and May of 2010, the Conference Board of Canada surveyed 130 mid and large-sized businesses; the results showed that 83 percent had short-term incentives in place. These incentives include: “variable pay, performance bonuses and annual incentives to achieve targets.”
While the survey’s statistics show most businesses using incentive programs, only 69% of those businesses had methods in place to determine the effectiveness of the programs “against the level of performance achieved by the organization, team or individual.”
Interestingly, the other 42 percent didn’t care about the effectiveness of their reward programs.
In the Toronto Sun, the Conference Board’s associate director of compensation and industrial relations Karla Thorpe explained, “With so many organizations rewarding employees with incentive pay, organizations need to do a better job of finding a link between pay plans and business results, to ensure they are getting value out of their incentive programs.”
With the economy slowing improving, in turn leading to a healthier job market, employers need to think employee retention. Part of this strategy will include taking measures to assess their company’s incentive program effectiveness.
While it’s always beneficial to have employee reward programs in place, they need to be comprehensive and effective to provide the desired results.