What is the most pressing problem for today's private enterprises? That is to move from a loss to a profit, or even to reach a profit balance from a state of loss for many years. You know, if a company can't solve the profitability problem and only relies on cash flow support, the results can be imagined.
Running a business is like fighting a battle without gunpowder, and the key measure of performance is performance
In today's business environment, if a private company fails to achieve performance growth, it is likely to be unsustainable. You must know that good performance will bring good profits, and good profits will help enterprises continue to make profits and build a long-lasting business.
Performance is not simply a means of appraisal, it is a complete cycle process that includes value creation, value evaluation and value distribution.
The core lies in the following: at the strategic level, at the organizational level, to stimulate the vitality of employees, and to properly design the incentive mechanism.
In practice, if we want to put our strategy into practice, we have to make sure that our strategy is not a castle. To do this, you need to ask your team four straightforward questions:
First, what is our goal? Specifically, what should I do to achieve the overall strategy of the company?
Second, what is our plan of action? How do we get there step by step, and what should we achieve at each stage?
Third, how to evaluate progress and effectiveness? Are we acting according to plan, and what are the results?
Fourth, what are the incentives? Is there any different feedback or reward for doing well or not?
Today, let's focus on motivation. At the end of the day, motivation is about motivating people to achieve their goals and turn our strategic vision into reality.
According to the research of William James, a professor at Harvard University in the United States, the current situation in the field of employee motivation shows that the traditional hourly compensation system can only mobilize 20%-30% of the potential of employees.
However, with the right incentives, employees have the potential to increase their ability to work to 80%-90%, revealing a potential performance increase of up to 60%.。This shows that effective incentives can significantly improve employee performance.
It's important to note that incentives are not the same as rewards; It includes both positive and negative incentives.
There is an adage in management:
"Only rewards without punishment is false management, only punishment without rewards is bad management, neither rewards nor punishments are equivalent to no management, and both rewards and punishments are truly effectiveManage. ”
When implementing incentives, it is important to take into account the needs and expectations of employees and the suitability of different incentives.
Problems with corporate incentives
In terms of incentives, many companies have actually adopted methods that do not achieve the desired results.
The head of a private enterprise expressed his concerns to me:
The company invited a vice president to engage in a set of incentive plans, and after the implementation of the employee income, but the company's performance not only did not rise, but declined.
After learning about the company's incentive plan, I found that this is actually a set of disguised wage increase plans. Of course, wage increases are not bad, but if incentives do not bring about performance improvements, it will only bring one result, incentive costs will rise, corporate profits will fall, and enterprises will not be able to sustain in the long run.
Later, another similar private enterprise tried similar incentives, but due to the lack of obvious results, the business owner had to return to the model of only offering a basic salary, and the results can be imagined.
It is clear to those involved in human resources that the purpose of pay-for-performance is not only to reward performance, but also to adjust the compensation structure to adapt to the dynamics of the labor market and the impact of inflation.
Simply offering a base salary doesn't really motivate employees to work.
Therefore, it is not advisable to talk about incentives. We must recognize that most employees may lack the motivation to improve their performance without changing the current salary level, and only a few good employees will be able to continue to work hard.
In China, many enterprises rely too much on bonuses and performance-based wages in the design of incentive mechanisms, resulting in the distribution of capital, labor, management and technical elements has not been fully optimized. Some companies choose to keep their employees' salaries unchanged and set up performance bonuses. However, this approach presents a dilemma: if the performance bonus is set too low, the incentive effect on employees is limited; If it's set too high, the business needs to bear a bigger cost.
In addition, companies are sometimes afraid to set excessively high performance standards, mainly for fear of affecting recruitment.
If the base salary is further reduced, it will be more difficult to recruit talent. For employees, as long as they can ensure a base salary, they will hardly pursue higher performance.
2. There are drawbacks to a single incentive methodIncentives for businesses should not be limited to a single approach. According to Maslow's hierarchy of needs, companies should consider the needs of employees in terms of physiology, safety, socialization, respect, and self-actualization.
As a result, employing a single incentive can present a number of problems.
First of all, there is a timeliness problem with a single incentive method. This is similar to medications**, such as taking cold medicine when you have a cold, and its effects may only last for a day or two.
Once the expiration date has passed, the effect will wear off. Similarly, incentives, such as bonuses or wage increases, may only last for 1-2 months or less. Therefore, long-term reliance on a single incentive may not achieve a sustainable incentive effect.
Second, a single incentive can lead to drug resistance. For example, overuse of drugs such as penicillin can lead to drug resistance in the body.
Similarly, the frequent use of the same incentive may reduce effectiveness. Employees often rely on performance-based pay for incentives at work, and they may gradually adapt and take it for granted, leading to a gradual diminishing incentive effect.
In addition, there is a misconception in incentives, that is, a single incentive means is regarded as a panacea. Thinking and acting this way can lead to ignoring the different needs of employees and the change in motivational needs due to personality differences.
Therefore, the incentive for people in the enterprise should not only adopt a single incentive means, but should adopt a set of combined incentive strategies. Only in this way can the diverse needs and expectations of employees be met.
The application of theoretical tools for enterprises to do incentives
In order to understand the combined application of incentives, let's first look at the theoretical frameworks used by companies to implement incentives: Maslow's hierarchy of needs, Herzberg's two-factor theory, and Aldfer's ERG theory.
1. Maslow's hierarchy of needs
According to Maslow's theory, human needs follow a hierarchy of five levels: physiological, safe, social, respectful, and self-actualized.
It is only when the lower level needs are satisfied that people pursue the higher level needs. This theory provides a precise methodology for analyzing individual needs.
Through accurate analysis of employee needs, management can take targeted management measures to achieve management efficiency improvement
2. Herzberg's two-factor theory
Herzberg's two-factor theory in 1959 still has a profound impact on the field of business management. The theory divides working conditions into two categories: health factors and motivational factors.
Health factors involve company policies, salary and benefits, material conditions, management systems and interpersonal relationships. While improving these factors can be effective in eliminating employee dissatisfaction, they alone are not enough to motivate employees and motivate them to work.
Motivators focus on job fulfillment, value recognition, challenging tasks, growth opportunities, and bonuses. Only when motivating factors are optimised can employees feel satisfied and demonstrate greater motivation to work
In the practice of enterprise management, many enterprise leaders and managers have integrated the two-factor theory into their daily management activities, such as through the means of job enrichment, expansion and flexible working hours, etc., to further stimulate employees' work motivation and improve labor productivity.
3. Alderfer's ERG theory
According to Alderfer's ERG theory, there are three core needs in human life: survival, relationships, and growth.
The survival needs meet the basic material conditions of the person, corresponding to Maslow's physiological and safety needs. Relational needs involve relationships that individuals build and maintain in their lives and work, which echoes Maslow's need for belonging and respect.
Growth needs focus on personal development and potential development, which is consistent with Maslow's respect and self-actualization needs
It is important to note that multiple needs may coexist at the same time. When a need is basically satisfied, its intensity will not decrease, but may increase.
If higher-level needs are frustrated, individuals may turn to the satisfaction of lower-level needs. Therefore,Understanding and meeting the core needs of the person is essential to help promote the mental health and holistic development of the individual
In summary, in order to ensure the effectiveness of incentive programs, organizations should deeply understand the individual needs of employees when planning incentive measures, and pay attention to the changes in their expectations at all stages of career development.
By applying the above theories and methods, organizations can more accurately grasp the diverse needs and expectations of employees, and then design effective incentive strategies
How to do corporate incentives?
In the process of in-depth combination of incentive theory and actual operation of enterprises, we can clearly divide incentive strategies into two categories: cultural incentives and mechanism incentives.
Cultural incentives
The so-called cultural motivation refers to the internal drive based on a sense of mission, the pursuit of dreams and the identification of values. Taking the feat of Tang monk Xitian learning scriptures in "Journey to the West" as an example, his behavior is not out of fame and fortune, but the adherence to his mission and dreams deep down
When an enterprise reaches a certain stage of development, the self-motivation shown by leaders and management stems from deeply rooted beliefs, ideals or values.
Mechanism incentives
Well-known companies such as Huawei and Tencent are favored not only because of the generous remuneration packages they provide, but also because they have established a complete set of incentive mechanisms.
The core of the mechanism can be summarized as three elements: economic reward, social respect and career advancement。These factors are extrinsic incentives as opposed to cultural incentives, so they are also called extrinsic motivations.
First of all, a competitive compensation package is the basis for employee motivation. The original intention of grassroots employees to join the company is to make a living, and the most direct motivation is to pursue higher economic income.
By offering attractive salary levels, companies enable employees to be more motivated to create value for the company after receiving satisfactory economic returns.
Secondly, social respect and a sense of honor are important parts of employee motivation. In addition to monetary rewards, employees should be recognized with honor and respect for their outstanding performance.
At present, many enterprises advocate public recognition in cultural construction, and set up a sales champion list or a list of outstanding employees to express full respect and recognition to employees. Pay attention to the spiritual needs of employees, and let employees feel their value in the enterprise through commendation, organizing activities, and providing a good working environment.
Finally, career advancement opportunities are key to unlocking the potential of employees. Employees who have performed well in the company for a long time should have the opportunity to be promoted.
Companies need to provide employees with a fair path to advancement and see career prospects. This helps motivate and motivate employees to put more effort into their work.
In summary,Economic rewards, social respect and career advancement reinforce each other and together form the core framework of the company's motivation for employees。Enterprises should be good at using these motivational elements to stimulate the potential of employees, and then create greater value for the enterprise.
To sum up,Cultural incentives and institutional incentives are like human feet, both of which are indispensable。If you only rely on mechanism incentives, it may lead to employees being mercenary and unscrupulous; Conversely, if there are only cultural incentives and no material rewards, it may be regarded as empty talk and questioned by employees.
2. Build an enterprise incentive system
There are three keys to building an incentive system:
Orientation
In the design of enterprise management mechanism, the problem of orientation is very important. Orientation, that is, the behavior of clear encouragement and opposition, determines the correctness of the management mechanism. As long as the direction is correct, even if something seems unprofessional or subtle, it can be considered correct
On the contrary, if the guidance is wrong, no matter how professional and refined the management mechanism is, it will deviate from the right track.
In terms of compensation system and incentive system, service growth and motivation should be regarded as the core orientation. If incentives don't drive growth or inspire employees, there will be problems.
For example, in Huawei's corporate culture, employees who are dispatched to work in difficult areas enjoy more promotion opportunities and equity incentives.
In 2002, a young Huawei colleague refused to be sent to Africa because he was concerned about his career prospects. This example highlights the critical role of orientation in business management.
Therefore, the orientation problem is the primary issue in the design of enterprise management mechanism, and it is also the starting point and basis of all work. The right direction ensures that the business is moving in the right direction, while the wrong direction can cause the entire business to go off track
principles
When it comes to principle, we should conduct a multi-dimensional in-depth analysis. Taking the bonus design of sales staff as an example, the principles of threshold, cap, acceleration, deceleration or uniform payment are proposed.
First, threshold setting. In order to protect the company's operating costs, it is necessary to set a minimum performance completion ratio.
Second, the cap setting. After considering factors such as business form, industry trends, and market conditions, clarify the percentage of bonus payouts and set limits and maximum values.
Third, accelerate, decelerate, or pay at a constant rate. Accelerated payments encourage high performance and show that companies are willing to pay more; Slow down payments to control costs; Tiered payouts are concise and to the point, but avoid subjective manipulation of performance.
For example, Huawei's proposal for easy jobs and easy salaries is seen as a principle. In this context, we can focus on this principle:The core principles of the incentive system, namely high goals, high performance, and high returns。Imagine if we adopt a low-target, low-performance, high-return model, which may be feasible in the short term, but in the long run, it will not be sustainable, and competitors may gradually gain the upper hand.
In addition, low goals, low performance, and low returns are equally undesirable. In this scenario, the best talent may choose to leave.
Therefore, only high goals, high performance, and high returns can form a positive cycle, which is the core principle of the incentive system
Mechanism composition
First, the general contracting mechanism.
In payroll management, the turnkey mechanism is the key management method. Taking Huawei as an example, the company's net profit increased from 100 million to 400 million, and the income of employees remained 200 million. If it is increased to 600 million, the employee income will be adjusted to 300 million.
Reasonable remuneration helps to achieve sustainable development of the company, solve the problem of value logic, and alleviate the conflict between labor and management. The turnkey mechanism is an effective tool to achieve this goal.
The core advantage of the turnkey mechanism is that it not only promotes the company's growth, but also guides the company to improve efficiency. Through reasonable remuneration arrangements, we can motivate employees to work and improve their work efficiency.
Second, the mechanism of progress.
The core idea of the Advancement Mechanism is that performance evaluation should be based on continuous improvement. This requires not only an improvement over past performance, but also a faster pace of development within the industry, among competitors and among colleagues.
By setting clear comparison criteria, we are able to ensure that our service growth targets are met.
When conducting performance appraisals, we must ensure that the distribution of value promotes the increase of value. Based on the principle of benchmarking-based improvement, value distribution should follow the logic of value.
Third, the squeezing mechanism.
In the field of performance management, employees are usually classified by a normal distribution mechanism, that is, they are divided into the top 20% of outstanding personnel, the middle 70% of general personnel, and the bottom 10% of those to be promoted. For the bottom 10% of employees, we may have to implement pay cuts or eliminate measures.
The existence of the normal distribution mechanism is similar to the principle of forest ecological balance. Without predator pursuit, bears that are otherwise strong can become lazy, gain weight, and eventually lose their combat effectiveness.
Similarly, if there is no such mechanism in the organization, employees who are already performing at the top may become slack and less focused on the business and the struggle.
Fourth, equity mechanisms.
While motivating good performance, it is also important to ensure fairness so as not to distract the team. The consideration of fairness is mainly divided into two levels: external fairness and internal fairness.
External fairness is primarily concerned with comparisons with industry standards and competitors to ensure that compensation and benefits are market-competitive.
Internal fairness involves more complex issues, including old and new businesses, mature and growing businesses, compensation packages for new and existing employees, and a sense of fairness between the front and back office.
3. Combined incentives
In order to solve the problem of incentives and avoid the disadvantages of a single incentive model, we must adopt a strategy that combines a variety of incentive methods.
The combination referred to here is mainly manifested in three aspects:
Diverse combinations of incentive purposes
First of all, to achieve performance growth. Achieve your goals by increasing revenue, reducing costs, increasing profits, accelerating collections, reducing inventory, and increasing cash flow.
Second, change behavior. The focus of the incentive mechanism is also different for different business personnel. For example, incentives for sales agents can be differentiated based on customer returns, consumption frequency, and customer unit value.
Finally, boost morale and attract talent. Incentives should take into account a number of factors, such as attracting industry talent, retaining top employees, and energizing younger teams.
Motivate people to diversify
In order to fully motivate employees, enterprises must deeply analyze the composition of the workforce. From the post-60s to the post-70s, and then to the post-80s and post-90s, we develop corresponding incentive strategies for different age groups, knowing that young people's values will be very different due to individual differences.
For example, some employees were born into poor families, and their primary goal was to make ends meet and provide for their families. Others come from wealthy families who choose to work in order to achieve their personal dreams and pursue values.
Diversified combinations of incentives
Incentives are like weapons in war, and they are many and varied. When attacking from a distance, bows and arrows are the best choice; In hand-to-hand combat, swords are more advantageous. Again, the choice of incentives depends on the situation and needs.
Effective management cannot rely solely on rewards or punishments, and over-emphasizing any aspect can lead to undesirable consequences.
Real management should have both rewards and punishments, so as to stimulate the enthusiasm of employees and promote the sustainable and healthy development of the enterprise.
How do I verify the effectiveness of my incentives?
To judge the effect of a company's incentive mechanism, we can start from whether the company's employees are activated, and there are three specific aspects.
1. From the perspective of employees' wishes
First, observe the gait of the company's employees. If the employees of the enterprise are in a hurry and the pace is vigorous, it indicates that they are enthusiastic, proactive and efficient. Conversely, if employees are slow, it is a sign that they are less motivated to work and lack a sense of urgency.
Second, look at the meeting performance of middle managers. In organizations with strong employee willingness to work, middle managers will show a positive discussion atmosphere in the meeting, and everyone will speak freely and jointly contribute to the development of the enterprise.
However, in companies where employees are less willing to work, meetings often become a one-man show for the boss. Employees are more focused on passing the buck when they avoid talking about job improvement.
Third, pay attention to the discourse focus of senior management. In organizations where employees are highly motivated, top managers are often future-oriented, forward-thinking, and brave enough to face the challenges of the future
In organizations where employees are less willing to work, top managers tend to dwell on the glory of the past and lack planning and vision for the future.
Through the observation and analysis of the above aspects, we can preliminarily judge the overall work willingness and motivation of the employees.
2. From the perspective of employee ability
Employee competency assessment is a key part of ensuring the efficient operation of a business. Employee competencies are divided into two categories: explicit and implicit.
Explicit competencies are the skills and experience demonstrated by an employee, which can be assessed by their past performance, current performance, and future development potential. For new hires or employees who have changed positions, the future method is usually used to evaluate, that is, whether they can perform their jobs in the future
Implicit competencies mainly include personal traits and latent qualities that cannot be directly demonstrated by employees. Among them, learning ability is regarded as the most critical tacit ability.
To judge whether an employee has a high level of competence, it is necessary to pay attention not only to the actual work results, but also to the way they work and think. This not only reflects the learning ability of employees, but also reflects their comprehensive quality and potential development.
3. From the perspective of employee execution
The important basis for evaluating the execution of employees mainly involves the speed and persistence of employees
An employee who responds quickly and takes immediate action will demonstrate effective execution. We usually describe employees with strong execution skills as neat and quick to highlight their fast and efficient work characteristics.
Speed alone is not enough, but the longevity of employees is equally crucial. Execution can only be achieved when employees have the ability to react quickly and maintain lasting action.
In short, the examination room is control, the competition field is activation, and the essence of corporate motivation is to activate employees. Use the vision of investment to motivate, motivate one person, drive thousands, and improve employee performance through effective incentive measures.
A good incentive mechanism can enable employees to challenge high goals, and develop a more effective incentive plan by focusing on the suitability of employee needs, expectations and incentives.
In addition, pay attention to the orientation and principles of the incentive system to ensure the correctness of the incentive mechanism. Through these measures, companies can better attract and retain the best talent, improve overall performance, and achieve sustainable growth.
end-**Produced by Noteman |Catering O2O