Reference no: EM133011886

For incentive plans to pay off for companies, the plans must stimulate employee interest and motivate them to perform well. Firms in several different industries have been creative in developing incentive plans, which have resulted in the companies receiving Top Motivator Awards from Incentive magazine. A look at two of the recent winners illustrates the variety of plans being used.

Houston-based Pappas Restaurants has over 10,000 employees working in restaurants such as Pappadeux Seafood Kitchen, Pappas Pizza, and others. As a key part of creating and maintaining a "fun culture," Pappas has created an unusual job as part of its management structure, a Director of Fun Stuff. This individual's role is to develop and conduct activities that reinforce the performance-oriented, fun culture that Pappas wants. By stressing this culture, the firm hopes to ensure that both customers and employees enjoy Pappas restaurants. One successful incentive program is called "Rising Stars." Employees working as bartenders, food servers, and in other customer contact jobs receive $20 gift certificates weekly for such actions as favorable customer comments, attendance, and working extra shifts as needed. But employees without primary customer roles are not forgotten, because Pappas has a "Kitchen Superstars" program for its dishwashers, cooks, and clean-up workers, who can receive gift certificates also. Purchased from well-known retailers such as Target, Blockbuster, and other retailers located near Pappas restaurants, the gift certificates provide immediate reinforcement for positive actions, as well as providing an easily used reward.

In a very different work setting, Washington Mutual, an insurance and financial services firm based in Seattle, has used sales incentive programs effectively. One successful program was called "Fresh Perspectives." To motivate sales employees to generate a greater number and volume of home loans, the company developed several different incentive plans. In the primary plan, the firm's sales representatives accumulated points for loan product sales. Sales results for employees were tracked and posted monthly so that everyone knew where they were in comparison to other sales representatives. The 400 top-producing salespeople became members of the President's Club. To provide special recognition of their accomplishments, the President's Club members were rewarded with a five-day trip to Cancun. Unique entertainment events, jungle safaris, and other activities were participated in by the club members and key executives. The Cancun trip was both an incentive to encourage performance and a reward for the top sales performers.

Numerous other firms spend considerable time and money on various incentive programs. The key focus of those programs, as well as the ones used at Pappas Restaurants and Washington Mutual, are to motivate and reward performance.

Why might the use of incentives in the form of gift certificates be better than just providing cash to employees?

What are some advantages and disadvantages of a sales incentive program in which the top performers receive a trip or other large reward, while other sales individuals receive lesser or different types of rewards?