Just being employed today often isn't enough of a motivator. Some employees are being asked to work longer hours, while others must take on additional responsibilities due to staff shortages. Morale is down, and frustration is high.

This is the case for both small start-up ventures and established businesses. In the start-up phase, most entrepreneurs are limited in the number of employees they can hire. Capital is often scarce, and everyone is asked to do more with less.

At many established companies, cost-cutting has become an important corporate goal. That often means the elimination of a number of jobs. Those employees who remain are expected to increase their productivity and make a greater contribution to the company's bottom line.

The fact is, people in all situations need to be recognized. When they are, it boosts their egos and morale and encourages them to be more productive.

A well-designed incentive program offers that recognition and can help modify behavior. Among those modifications are increased productivity and sales, improved customer relations, safer work environments, increased morale, and much more.

When it comes to improving employee performance and morale, the "carrot" has proven to be much more effective than the "stick." In California, for example, CEOs must motivate their employees to carpool because ridesharing is now a law, enforced by fines that are levied against the company. That same law is also taking effect in other parts of the country, including the Northeast.

Rather than charge employees for parking, which would be a "stick" approach, many companies have turned to positive reinforcement and are rewarding their employees with a "carrot" of highly desirable Sony products. The program is a great success.

Incentive programs can be used to achieve a variety of different goals, but no matter what a company's objective may be, there are five basic steps to establishing a successful incentive program:

Step #1: Set fair objectives. You can't ask your employees to suddenly improve their productivity time by 200%, but asking them to improve their productivity time by 10% may be reasonable and obtainable.

Make the objectives easy to understand and very specific. "We have to improve quality" is too vague. On the other hand, "Our rejection rate on our widgets has to go from 10 per thousand to five per thousand" is realistic and specific. The length of an incentive program is also critical. Most often, it should be goal-oriented for a specific and finite period of time. It is also recommended that employers discuss the objectives with their staff. Allowing them to be part of the initial process usually helps improve the program's chances of success.

MEASURE RESULTS

Step #2: Measure results accurately. This is probably the most difficult part of an incentive program. It's easy to measure improved sales, but non-sales objectives such as fewer mistakes in correspondence or faster handling of complaints are much more difficult to measure. If your objectives can't be measured accurately, restate them in measurable terms.

Step #3: Communicate your goals clearly and on a regular basis. People like to know what they're trying to achieve and where they stand along the way. Let them know how they're doing on a regular basis. This can be accomplished by distributing memos with the specific objectives and posting charts showing success to date.

Step #4: Choose rewards or incentives tailored to your participants. Be conscious of lifestyle habits and demographics. If the majority of your staff is married with children, you may want to select rewards that the entire family can enjoy, such as camcorders, television sets or VCRs.

Whatever the awards, choose quality and variety. Let the employees know that if they can't win the Sony 27-inch Trinitron TV, they may be able to win a Sony Sports Walkman personal stereo.

Types of awards vary greatly. According to a recent Gallup survey, electronics products have the highest overall appeal as durable goods incentives, and vacations are considered the number one non-durable goods incentive.

Products have one big advantage as incentives, i.e., they leave a lasting impression on the recipient. The earned television set that is displayed in an employee's living room is a daily reminder of a job well done.

Although cash may seem like a good motivator, it doesn't leave the lasting impression that a product does, especially if it's used to pay a phone bill or credit card charge. In addition, the perceived value is no more than the dollar value. Merchandise, however, might cost you one dollar but be perceived by the recipient as being worth five dollars or more.

Although travel can be a wonderful incentive, it can also be awkward for the recipient because of timing or family considerations. This is particularly true in the time-pressed, two-income households that have become the norm in most segments of U.S. society. Many working families find they barely have time to meet their everyday obligations. Scheduling a trip or vacation -- especially one that is limited to a specific time frame -- can be a near impossibility for them.

In addition to vacations and electronics products, other motivating incentives, according to the Gallup survey, include entertainment tickets, appliances, and jewelry.

CELEBRATE ACHIEVEMENTS

Step #5: Celebrate achievements. Let your employees know what they achieved and who won what. It's counter-productive to spend money and effort in an incentive program if you don't let people know what they achieved. You can hold an awards ceremony, post employee photos and awards on a bulletin board, or distribute a company newsletter.

It's also important to incorporate incentive programs into your overall marketing plans. Incentives are measurable, cost-effective and can dramatically impact your company's bottom line.

A leading manufacturer of emergency lighting, for example, needed to increase sales on two existing products while simultaneously introducing a new product. It designed an incentive program targeted at electrical contractors that involved a minimum buy in order to earn the award. The company set a goal of increasing sales by 25% over the previous year. Sales actually increased by 36%.

Cathay Pacific Airways wanted to build awareness of its new business class service and entice potential customers to try it. Then came the challenging part. The company wanted to actually double transpacific business class boardings. The incentive chosen was a Sony portable CD player. The results were very impressive. Business increased by 150% over the prior year, and more than half of the passengers who received the Sony CD incentive were first time customers of the airline.

Lenscrafters wanted to increase sales of its premier eyewear, Silor Super Shield Scratch-Resistant lenses. The program involved a three-week trial in which every Lenscrafters customer who spent $100 or more would receive a free Sony Walkman stereo radio. As a result, sales increased by 22%.

In a recent year, Reebok wanted to increase holiday sales of athletic shoes. The company developed a program whereby anyone purchasing athletic shoes during the holiday season could purchase a Sony Walkman for $5.99. More than 140,000 Sony units were purchased during the campaign, and that added up to a lot of Reebok athletic shoes.

Square D Electrical Company wanted to increase sales to distributors and contractors. The company devised a 6-month program for 1,300 distributors and 6,500 independent electrical contractors. Points were awarded for Square D sales which could then be redeemed for prizes such as Sony television sets. More than a half million dollars worth of Sony products were awarded as a result of the increased sales.

The growing trend in the incentives industry is in non-sales incentives. For example, Rhythm Tech, a small business that designs and manufactures percussion instruments and distributes them worldwide, has successfully implemented incentive programs to improve attendance, maintain a high level of quality control and ensure that orders are shipped correctly. According to Robert Linett, president, the employee incentive programs the company established have increased morale in addition to meeting the other set goals.

In business for 15 years, Rhythm Tech developed its incentives program three years ago but has modified and expanded it since. Originally attendance was the primary reason for initiating the program, but Linett broadened the program to include quality control and shipping as a group.

If an employee earns eight points, he/she is entitled to one type of prize. To reach the second level, the employee must earn 14 points. And for the third level, to win such products as a Sony boombox, the employee must earn 20 points. Employees can then choose their gift from a variety of products from a catalog that includes tools, electronics, toys, recreational gifts, cooking utensils, and more.

The incentive program, which was originally initiated as a test program, has grown into a successful, established program for Rhythm Tech. Linett has found that not only has the program successfully produced positive behavior in certain employees, but that it continues to reinforce positive behavior and attitudes in the "good" employees.

LOW COST

An incentive program costs practically nothing. Unless the objectives are met, the company doesn't purchase the awards. If the awards are earned, then the incentive program becomes a win-win situation for both the employer and employee: The employer achieves the goals such as increasing sales or reducing expenses, and the employee is recognized for doing so.

The reward is usually the last element of the overall incentive program to be considered, after designing the incentive program, setting the objectives and deciding how to implement the program. One pest control company decided to take the opposite approach. Its objective was to increase sales, and it chose the reward first -- a Sony VCR.

The CEO of the company sent each of his salespeople a VCR at home along with a videotape explaining the incentive program and informing them that they had to reach a certain quota in order to keep the VCR. By the end of the three-month program, the company saw a 27% increase in sales -- the highest in the company's history.

Another critical component of incentive programs is that every employee in the targeted group (i.e. salespeople, secretaries, etc.) must be given an equal opportunity to earn a prize. This is important to the overall success of the program because if everyone can win, then everyone is motivated.

Incentives comprise a $20 billion dollar industry that sees a steady growth of 5%-7% per year. A good incentive program does take some experience and expertise to set up.

Naturally, start-up businesses are often faced with tough decisions on how to allocate their resources. In many cases, however, the investment made in hiring someone with specialized expertise can result in a payback that justifies the cost.

As with any outside service or expertise a business owner considers hiring, you should take a close look at the benefits an incentive program can provide.

Sony's Premium/lncentive Sales Department has been a leader in this industry for almost 30 years. For more information, contact the department at 1-800-833-6302.