Issue No. 66 - August/September 2012
Dangling the carrot to achieve results
by Kishen Vijayadass
BDO has partnered with in-business for the Fast Movers program for eight consecutive years, providing BDO with the opportunity to speak candidly to Fast Movers CEOs about the challenges they faced in growing their business.
The most common reply to the question of the greatest hurdle to rapid growth is finding and retaining great people, and keeping them engaged. No matter what business you run, people are central to the success, particularly individuals who contribute most to wealth creation in the business. Without these key individuals, business success and growth is difficult to manage.
To ensure the performance of these key individuals contributes to the overall performance of the business, it is crucial for on-going growth to appropriately incentivise.
Nevertheless, structuring the right incentive program to fit purpose is critical. Common mistakes when setting incentive programs are:
• Rewarding the wrong people
• Rewarding the wrong outcomes
• Providing the wrong form of incentive
• Lack of connection between reward and performance
• Cynical or crude use of incentives.
A well written incentive plan will, in the very least, help you to assess the real profit generators in the team. At best, it can create new entrepreneur-employees to capture the significant energy and drive of these performance focussed individuals.
An effective incentive program, cemented with a strong culture of performance, should:
• Target the individuals on whom the business relies
• Assess their most beneficial measure of reward
• Provide the individual with a mechanism to control a significant portion of their ...