How to Create an Employee Incentive Program Based on Key Business Metrics

Even if your company is highly-automated and roboticized, employee performance is still a key component of your success. You need to attract, motivate, and retain the best workforce that is focused on the work that helps you achieve your strategic goals together. This need has led companies in many industries to use alternative (non-cash) compensation. Some employers are known for using lavish benefits and perks as alternative compensation (We’re looking at you, Silicon Valley). But believe it or not, there are better ways to motivate people than with free foosball and breakfast buffets.

Employee incentive programs—structured effectively to recognize and reward specific metrics— are proven to get results. Whether your company makes products in a clean room, physical plant, warehouse, or some other facility, a manufacturing employee incentive program—done right—can help increase employee engagement and raise the KPIs that matter most to you.

Manufacturing Employee Incentive Programs

Structured for Results

The most effective employee incentive programs are built around specific companies, people, and strategies. This isn’t a one-size-fits-all proposition and involves more than just distributing rewards catalogs and points lists (how much do I need to earn for the clock radio?). The connection between specific behaviors and tasks to the recognition and rewards given needs to be transparent and clear for all to see.

That recognition and those rewards are important. People want to earn really great gear, sure, but they also want public recognition from the highest levels (ownership and senior management) and feel connected to the company’s mission.

See also: How to Structure Incentive Plans That Work

Target Your Industry’s Most Meaningful Metrics—and Yours

So which KPIs would help your company most right now?

Are they the same ones that will drive your long-term success?

If you don’t have those answers at your fingertips, choosing the KPIs that will drive your incentive program can be more challenging. However, this is a great opportunity to consider those questions with a fresh eye. Depending on your financial, workforce, and other goals, you can customize the KPIs you measure based on what you need and what’s trackable. Same rules apply when considering your incentive program as with tracking other operations or sales activity at your company: You’ll need indicators that are measurable, customizable, and consistent.

Selecting the exact mix of specific KPIs you choose to recognize and reward is a strategic opportunity: Although most companies in a given industry likely measure the same KPIs, you don’t have to follow the crowd. Get people focused on the work that will help your organization reach its goals.

From the production line to QA to Sales, you can target metrics to boost results for different teams. If the first three sets of the examples below are too broad for your needs, zero in on what makes the most sense for your firm and what KPIs you need to boost to meet your specific goals. At Inproma, our house specialty is incentive programs, not manufacturing, but these example KPIs may help guide your decision.

Again, the key is to use KPIs that are as specific to your company’s business as possible. As an example, medical device manufacturers may want to track corrective actions taken, audit findings, and compliance-related indicators.

If your incentive program is administered properly, you’ll also get an extra benefit that should help KPIs and overall productivity across the board: Employee engagement. As Gallup has noted in its annual State of the Global Workplace report, workers are more engaged when they know their work is being tracked, and vice-versa. So tracking KPIs as part of an incentive program will get employees more “into” their work. It’s a way of getting more value from the information you already collect.

What’s In It For You

Manufacturing employee incentive programs help recognize your people for great work. Besides motivating your team to do their best, there are several benefits to this type of alternative compensation for employers:

• Better results dollar-for-dollar than cash bonuses
• Delivers full value of the company’s investment—no wasted unused gift cards or rewards program points
• Budgetary predictability; no surprise bursts of reward point redemptions
• Rewards act as Internal branding and advertising (“I heard you won that. How’s that work?”)

One of the great things about employee incentive plans is that you can add or shift focus as division and corporate goals change, maintaining and possibly increasing the value of your incentive program investment over time.

Incentive Programs That Get Results

Gourmet chefs on company campuses aren’t the only way to attract and keep great employees. Professionally-designed and structured incentive programs can help motivate your people better than cash bonuses. Inproma can handle everything from program design to fulfillment. If your manufacturing company could use a productivity boost, or you need to increase employee engagement, let’s talk.