As agency owners, you want to reward your employees and show them you care about them, right? Most companies don’t have the ability to just hand out raises and bonuses left and right, continually increasing their fixed costs, but what else can you do to show that superstar employee that you notice and value their hard work?
The answer is incentive compensation. What exactly is incentive compensation?
Incentive compensation is a form of compensation that is directly tied to the organization’s success, team’s success, or is related to the amount of product sold, etc. The difference between incentive comp and bonuses is that incentive comp. is a contractual, forward-looking payment tied to specific achievements or objectives, and bonuses are completely discretionary rewards. Incentive compensation is one way you can increase employee performance and retention - but it’s also a way to reward your employees for their hard work!
There are several different types of incentive compensation, including phantom stock, sales commissions, profit sharing, and more! Tune into our Creative Outcomes Podcasts (Spotify, Apple, Youtube) where they’ll dive deeper into these individual options and can help you decide which option would work best for your agency!
Why not give your employees something to strive for? Working aimlessly without goals can lead to burnout, but working towards a goal with extra money on the line is motivating and a fun way to get everyone engaged! The key to implementing a great incentive compensation plan is making the goals attainable. Sure, you don’t want it to be a simple walk in the park, but the point of these is to encourage your employees, not add more stress to their plate!