Incentive Design

Perhaps you’ve heard the oft-repeated phrase – “The good news about incentives is that they work; and the bad news about incentives is that they work.” Of course, this means incentive plans can be one of your most powerful tools for focusing and energizing team members to achieve critical business outcomes. However, poorly designed incentives can encourage and generate a host of unwanted and adverse behaviors.


Romanoff Consulting has extensive experience designing powerful and appropriate incentives in a wide range of industries and applications for jobs at all levels. In fact, we believe every employee should have some portion of their pay tied to incentives.We make a clear distinction between bonuses and incentives.


Bonuses are paid after-the-fact in amounts and for reasons unknown and unforeseeable to those eligible to receive them. As such, they have limited motivational and behavioral impact. We generally consider them a waste of money. Traditional profit-sharing programs fall into this category. Incentives, on the other hand, define in advance what an employee is supposed to do and what they will receive when/if they do it. This makes incentives a powerful motivator and tantamount to a contract with employees. And why not? To us it has always made sense that if a company makes explicit demands from its employees, it should be equally willing to commit to what it will offer in return.


Unfortunately, most incentive plans not only function like contacts, they read like them. Dense narratives interspersed with complex formulae and legalistic language are not incentive plans – they are dis-incentive plans. Incentive plans must clearly communicate on a single page exactly what is expected. Without this simple communication, much of an incentive plan’s motivational impact is lost.


One of the ways we do this is using our proprietary Incentive Plan Builder on-line application. Incentive Plan Builder is the only online incentive plan design tool for managers. Incentive Plan Builder is both a design and learning tool. Using it, over time you will become more knowledgeable about measuring and managing performance.


Incentive Plan Builder breaks down the method of developing incentive plans into a step-by-step process. The end result is an attractive, professional, standardized incentive plan document. On a single easily understood page, each employee will see their measures with three levels of performance (Threshold, Target, and Outstanding). Their earning opportunity for each level of performance can be seen at a glance, motivating them to get to work achieving their goals.


While it is a valuable tool for incentive design, Incentive Plan Builder is far from our only method of designing and developing incentives. We have an extensive library of different designs suited to different situations from Sales Commission Plans which function like Bingo boards to complex Gainsharing programs. Let us help you create the ideal incentive design for your business.