New research says there’s one big problem with many firm’s incentive programs: They’re not working.
That’s according to the 2013 Talent Management and Rewards Survey Series from Towers Watson.
Though 90% of companies have annual incentive programs, fewer than 50% of employees at those companies say that top performers are adequately rewarded for their work.
And short-term incentive programs aren’t held in a high regard by many staffers: Those initiatives rank come in at 22 on the list of the 27 most commonly selected reasons to join a company — and rank 15th out of 27 most commonly selected reasons to stay with an employer.
2 major problems
So what’s the problem? One major culprit: funding.
Annual incentive plan funding has fallen below target for seven out of the last nine years in the U.S.
Maybe there’s not much HR can do about the amount of money available to dole out to your best performers. But what HR can work on is the second main problem: incentivizing staffers who don’t deserve it.
According to the research, nearly one out of every four companies rewards employees who fail to meet expectations.
And surprisingly, 18% of firms give the same payout to staffers regardless of performance.
How to fix incentive programs
What’s to be done? Make time to delve deep into your incentive programs to see just how the money is getting doled out.
If adequate and below-average employees are being unfairly rewarded, it’s HR’s duty to right that wrong — before top performers become disenchanted with the system and look elsewhere for a company that truly appreciates them.
Check out the full infographic below: