I’m not a sheperd, nor do I know any sheperds. I read The Alchemist awhile ago, which is about a sheperd, but that’s about it.

I do know that even sheep need incentives to do what you want them to do. That’s why there are sheep dogs, who incentivize sheep to move in the appropriate direction on the fear of getting barked at. Woof! (Ok, an incentive isn’t quite the same thing as instilling fear as a motivational tool, but it’s still a funny example. More importantly, I wanted to use sheep for my metaphor…)

Employees are not sheep.

Ah, there’s my point.

So don’t treat them like sheep. Actually, given my lack of knowledge about being a sheperd, who am I to use that phrasing, except for the fact that it’s fairly commonly used. We consider sheep to be:

* All the same / lacking individualism
* Easily herded around
* Fairly mindless

Don’t treat employees like sheep. Right. Next point.

We’re human (at least, I think we are…*he says peering carefully at a few people he’s held suspicions about for some time…*), and humans need motivation. Hopefully a lot of it comes from the inside, and you want to hire people like that, but people are people, and as such, they need incentives.

Maria Palma at CustomersAreAlways comments on a news story about Home Depot, where they’re now offering $1,000 monthly to employees that provide great customer service.

My first reaction was: “What exactly does the person have to do for their $1,000?” It’s a legitimate question even if it brings up all kinds of potentially lascivious thoughts.

Maria thinks cash incentives = bribes. I hadn’t ever really given it much thought, since I don’t give cash incentives at my office, but I can see her point. And she notes that numerous studies claim that tangible rewards (particularly travel or merchandise) are better than cash ones. That makes sense to me. It’s the same principle as giving cash as a gift versus something tangible. The feeling is that a tangible gift had to have some amount of thought behind it, whereas the cash was just stuffed into an envelope or a lousy gift card and that’s that. Minimal thought required. Of course, lots of people prefer cash, so they can spend it on what they want, and don’t have to feign excitement over a label maker, but when it comes to incentives, I can see tangible ones working better.

All of that aside, I’m on the fence when it comes to incentives. I can see them working well in larger companies (where it becomes almost impossible to really hire great people for every position), and I can see them working well for certain types of jobs (like call centers; boring, tough jobs, where an extra wee boost might be nice.) But I have other ideas when it comes to incentives:

1. Bonuses. I like bonuses (be they cash or otherwise.) To me, a bonus says, “Job well done. Keep up the good work.” I know in some places bonuses are expected, and at that point, I think they lose some of their effectiveness. Small companies can really give their employees a boost by surprising them with a bonus. And the bonus doesn’t have to be huge. It might be a couple hundred bucks and you’ll be surprised how positive the response will be from your employees.
2. Training. Pay to have your people trained. Give them a boost in their skill set and you’re benefitting them and benefitting yourself. When employees see that you’re investing in them they’ll feel more appreciated than they would through an incentive program. You’re giving them a chance to improve themselves, which can lead to all kinds of opportunities (i.e. promotions, if there are jobs to promote the people to, or at some point, a new job elsewhere if they grow out of the one you have for them.) You benefit by improving your employee’s skills; suddenly that person can do more, probably faster, and can increase his/her value to your company. That increased value is going to improve your bottomline. I’ve done this a few times and it’s worked extremely well.For one employee (when we sat down to chat about the future) I gave him the chance to find the training/learning opportunities. It wasn’t for me to say, “You absolutely must go take these courses, and do such and such the way I want.” The format (online school, university, college, books, etc.) doesn’t matter to me, as long as the employee knows that I care about investing in him and the employee’s skills improve.

So…what have you used to incentivize and motivate your employees? What do you think about cash incentives? Is Maria right, are cash incentives tantamount to bribes? And how many of you are going to apply for jobs at Home Depot, do “whatever it is they want” and reap the $1,000/month rewards?