How Can I Choose the Best Incentive Scheme to Motivate My Team Across Sectors?

Hi, I hope all is well. I am working with a job placement company that deals with various sectors. Currently, we are performing very well, and I am looking to boost the interest and motivation of my employees by implementing an incentive scheme.

Guidance on Incentive Scheme

Can you please guide me on how to decide on the incentive scheme? Should it be based on the candidate, in terms of rupees, or specific to each sector? Which option would be more effective?

I am seeking help from this group to determine the incentive criteria as I believe this platform is filled with renowned, experienced, and successful members.

Thanks in advance.

Regards,
MANOJ

You can reach me via email at [Email Removed For Privacy Reasons].

Incentive Payments and Employee Motivation

Incentive payments to uplift the motivation of employees should come after an in-depth study of the job process. It may be that in a job cycle, employees become demotivated at a particular point. To improve performance, some incentive schemes need to be derived. Moreover, any incentive scheme once designed cannot remain forever; it should be periodically assessed.

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Regards,
SUDIPTA

Hi, in my opinion, you should plan an incentive scheme. A rupees-wise scheme will work better. Please find the incentive structure below:

Incentive Structure

Target % achieved Incentive %
50% 2%
60% 3%
70% 4%
80% 5%
90% 6%
100% 7%

For example, an employee of yours has a salary of Rs 10,000. You had decided the target as Rs 100,000. If he/she achieves 50% of the target, then the incentive should be 2%, i.e., 2% of Rs 50,000, and so on.

Thanks,
Rashmi

Incentive Scheme Planning

What is more important for your company will be closing the position as soon as possible. You may use criteria such as:
a) Time taken to source profiles and convert them into interested candidates
b) Follow-up with the client
c) Setting up interviews
d) Time taken to convert the candidate to a hire
e) The hire itself

You may fix a certain percentage of the incentive when the hire takes place. Also, you may include a small percentage for lower-level hires and a higher percentage for senior/management level hires.

You can also request your team to seek referrals from candidates or anyone they talk to. For example, for every two candidates they talk to, they must at least get one referral.

Also, monitor the email language. Encourage employees to improve proper email communication. You may even fix an incentive for people who have not made mistakes in email communication.

Thanks
Regards

At the outset, it's encouraging to know that you are doing well. Keep it up. Your first priority should be to consider the Cost to Company (CTC) of the employee. There is a minimum target that every employee must achieve, which accounts for the CTC. No incentives are paid for meeting this minimum target, as the employee is already receiving a fixed salary. Incentives are planned based on achieving targets above this minimum. Additionally, there is a component called REWS cost, which stands for Real Estate Work Space. Every employee has a cost associated with their workstation, which is considered when determining the employee's CTC.

Incentive Planning in Hardware Sales

In hardware sales, one method we utilize is setting a contribution target for employees. This target focuses on the profit contribution to the company rather than the turnover. For example, a turnover of Rs. 10L may result in a profit of Rs. 2L. This Rs. 2L becomes the contribution target. Consider setting a contribution target suitable for a placement firm like yours and structure incentives accordingly, whether in terms of a percentage, a month's salary, or two months' salary. Additionally, take into account booking and billing targets. Incentives should be paid upon achieving the billing target, not the booking target. Therefore, incentives can be paid quarterly to align with higher billing chances compared to monthly payouts. You can adjust and align these strategies according to your industry.

I hope this information proves helpful to you. I will provide further details if needed.

Warm Regards,

Girimaji

Incentive is an external motivational factor to boost performance levels and interest in a job. Incentives in the form of money are key factors to enhance performance, confidence, and a sense of achievement among employees.

In my view, we should not differentiate based on the domain, sector, or job position offered to a candidate as it may create unhealthy competition among recruiters. I suggest basing it on a percentage of the Cost to Company (CTC) offered to the placed candidate by the concerned recruiter. This policy or criteria can be as specified by Rashmi earlier.

Incentive Structure Based on CTC

For candidates placed with a CTC of 5 to 10 LPA, the company would be charged an average of 8.66%, and an incentive policy could be structured as follows:

- For CTC 1 to 5 LPA - 2% of the consultancy's earnings to the recruiter.
- For CTC 5 to 10 LPA - 3% of the consultancy's earnings to the recruiter.
- For example, if a candidate with a 5 LPA CTC is placed, with an 8% commission from the company, the consultancy can earn 40,000 INR, and the recruiter could be paid 3% of this, i.e., 1200 INR.
- For CTC 10 to 15 LPA - 4% of the consultancy's earnings to the recruiter.

Before planning, ensure that it is challenging to place candidates for consultancies these days, and the success credit goes to the recruiter. Therefore, the incentive policy should align with real motivation criteria, particularly in terms of financial rewards.

Regards,
Brijesh

Hi,

Thanks a lot to Sudipta, Rashmi, Asha Mathew, Reema, Girima Ji, and Brijesh for your valuable suggestions. It gives me an idea to decide the incentive criteria for employees. I will try to keep in mind all your suggestions.

Regards, MANOJ BHATT 9879590072

Employee incentives are a great way of keeping employees motivated. Rewards and incentives are a good strategy to keep employees motivated and focused on the goal. However, the incentive strategy needs to be well thought out and well planned.

Here is a link to an article focusing on some key areas that companies must consider before having a formal incentive plan: [Pros and Cons of employee incentives](http://quikchex.in/dangling-the-carrot-pros-and-cons-of-employee-incentives/)