Incentives should motivate. Too often they create arguments. A salesperson believes they hit target, the spreadsheet says otherwise, and two weeks are lost settling it.
Why incentive schemes go wrong
- Targets are agreed in a meeting and not written down where everyone can see them.
- Results are pulled from different reports by different people.
- The calculation lives in one person’s spreadsheet.
- Payment is late because the calculation is late.
Build the scheme on recorded results
- Set goals per role. A salesperson, a technician and a branch manager need different measures.
- Agree targets up front. For teams and individuals, for the period.
- Measure from the records. Sales won, collections recorded, service jobs closed, whatever the scheme uses, taken from the system where the work is done.
- Calculate from the same data. So anyone can trace an incentive back to the work behind it.
- Review with appraisals. Incentives and appraisals should tell the same story.
What to look for in software
- Goal templates per role.
- Targets for teams and individuals.
- Appraisals recorded against those goals.
- Incentives calculated from data the system already holds, not imported from a spreadsheet.
- Incentives that flow into payroll.
How AIMS handles it
In AIMS HRMS, goals and incentives cover KPI templates and goals per role, targets for teams and individuals, appraisals against those goals, and performance incentives calculated from the data AIMS already holds. Used with AIMS IQ or AIMS V2, incentives come from the sales and service work recorded there. See the hire to retire journey.