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8|July 2021 Slippery rock Gazette
   Performance Incentives
Motivating Your People to Excellence
accountability within a company is a serious managerial weakness that must be corrected before considering the introduction of incentive program. Incentives can make a well-managed com- pany better, but they will never make a poorly managed com- pany good.
Individual vs. Group Incentives
Individual incentives, often called piecework, are not what is being recommended here. Piecework sets up each employee as an individual performer, some- times even creating competition for the “good work” between em- ployees. Moreover, piecework can be a detriment to producing good quality. A common state- ment is “show me how you will pay me and I will show you how I will behave.” If you pay me just to produce more units I may do so at the cost of quality.
A group incentive, based on global goals, is a much better approach. These plans should be based on the overall company goals, which would include es- tablished quality standards.
The very nature of your busi- ness system must rely on your people to cooperatively work to- gether in order for the company to be successful. If too much emphasis is placed on individ- ual or isolated job goals, you may diminish the importance of reaching company goals. Some firms have inadvertently created destructive levels of internal competition by placing too much emphasis on individual perfor- mance at the expense of overall company achievement.
It should also be noted that an incentive pay system should
Bonus payments and incen- tive compensation are not the same thing.
Discretionary bonus payments have been a common practice at many companies for years. Typically, around the end of the year and during the holiday sea- son, a company might reward its key people with a bonus. The amount is usually a subjective judgment at the discretion of the owner, and is based on how well the company performed finan- cially during the year. Managers often agonize for weeks over how to fairly distribute the bo- nuses among the key staff. Since the bonus is purely discretion- ary, it is sometimes the source of disagreement among those re- ceiving it. Moreover, a holiday bonus in a good year can be taken as an expected payment even in not-so-good years. The intended effort toward a motivating factor can sometimes result in just the opposite.
A bonus system is traditionally reactive in nature and, therefore, establishes little motivation to- ward excellent performance. As noted, it often evolves into an expected payment irrespective of the company’s performance.
An incentive pay system is proactive and is earned only when the defined performance is achieved. Since it is clear that the payout only comes when the established goals are met, the motivation to perform is clear.
An Incentive Compensation program is pay for performance. A proper incentive compensation program should establish clear,
Ed Hill
Synchronous Solutions
    “Your people should see the Incentive Plan as a way for you to share the increased company profits with the good people who have worked to achieve them.”
unambiguous goals and speci- fied rewards before the period begins over which performance will be measured. The objec- tively stated plan should be fully communicated to staff members in advance, thereby creating the incentive. In this way the individ- ual knows exactly what he or she must achieve in order to obtain a specific reward and patterns his or her behavior appropriately. As well, when those goals are met, the employee rightly expects the reward will have been earned.
It is important to note that the purpose of an incentive compen- sation system is to encourage overall performance beyond the minimum expected. It should never be used as a substitute for holding your people accountable for their individual responsibili- ties. Using an incentives program as a non-confrontational way to get people to “do their jobs” will never work. A lack of fundamental
increase company profits. It should not be a cost of business, but rather a profit generator. In other words, a well-designed company incentive plan should result in productivity levels that exceed your minimum goals. The payout should occur only when your company goals have been exceed. As such, a good incentive plan is a win-win pro- gram for everyone.
As you can see, the design of the plan is extremely import- ant. The goals should reflect in- creased overall performance, but must be perceived as reasonable and attainable or they will not in- spire people to invest the needed effort and could even become a negative in the minds of your people. Your people should see the incentive plan as a way for you to share the increased com- pany profits with the good peo- ple who have worked to achieve them.
Finally, progress on the com- pany performance goals should be monitored and communicated frequently. The performance pe- riod on which the inceptive pay- out is based should be short, i.e. at about one or two pay periods, or monthly at the longest. This is necessary to provide the maxi- mum “incentive pull” which will create the highest motivation.
An incentive pay system that is based on annual or even semian- nual (six months) performance is too long. In any case you should provide frequent updates so that people “know the score” throughout the period.
Important Points in an Incentive Compensation System
1. Never substitute incentives
for basic accountability.
2. The plan should be clearly communicated and thoroughly understood in advance of implementation.
3. A good plan design can cre- ate a powerful recruiting and retention advantage.
4. A poor plan design can lead to serious internal conflicts.
5. All goals should be objective, measurable and attainable.
6. Design the goals around the behaviors you seek to encourage.
7. Properly designed, the funds to pay incentives will come from increased profits with at least half of the increased profits remaining with the company.
8. Provide frequent updates comparing actual performance to goals. The “Score” should be posted around the company for all to see.
A good resource for more in- formation on incentive plans is The Great Game of Business, by Jack Stack.
Synchronous Solutions, LLC has developed incentive plans specifically for the stone pro- cessing industry. For more infor- mation, contact Ed Hill at (704) 560-1536.
    Training & Education
 Continued from page 1
Bill Hickey, Vice-President of Business Development said, “I’ve worked at BB Industries now for almost 17 years. In that entire time I have always felt like we were one big family. Beginning with the original owners of Doug Slocum and Ron Weiler and con- tinuing today, we treat our cus- tomers and employees as if they
are family. I believe this is why we have so many employees with over 15 years of service, and cus- tomers who continue to allow us to serve them. It truly is a joy to work in an environment like this. I’m not sure many people have the chance to experience that, but I know it is why we have been as successful as we have been for 27 years.”
Stimac added, “Since I came from the HVAC industry, many of my employees have taught me about the stone industry, and provided history on where BB Industries came from, so that we were able to strategically plan our future, as a team. We have added some of the most experienced sales consultants in the industry to our team, brought thousands
of premium products to our of- fering, as well as partnered with top industry brands. We are committed to being the best product supplier and a true part- ner in the stone industry.”
All of the company depart- ments – marketing, sales, and order fulfillment – work as a cohesive unit toward the goal of being the best in the indus- try. They know each other’s families and support each other through hard times. It really is a unique environment.
Please turn to page 14
  Knoxville News Sentinel Awards BB Industries Knoxville’s Top Workplaces 2021 Honor
 






















































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