Absolutely not! That was the clear answer from Joe Hinkens from Mainline Auto Body. Decades on, Joe is still called upon by his colleagues who are curious or interested in what advice he can offer on clever pay plans with a mindset that it will fix their problems or fix their situation. His advice is, it won’t! Incentive plans are merely a compliment, it is the shingles on the roof but you have to start with the foundation first and that foundation is getting everyone aligned – that trumps everything else.
When it comes to incentivizing, that is just one of the components that makes work fun. When you start keeping score and they realise that “hey, there is a little, what’s in it for me” clause then the attitude changes to “heck yeah – let’s do what we were hired to do, let’s work together as a team to reach our mutual objectives.” If we can ice the cake with some incentives, just to make it fun then that is a good thing – but on their own, they are worthless.
You must really understand the people in your organization because everyone is different.
What Joe has learnt over the years is that by and large, people just want to security and the confidence that they are being rewarded fairly and recognized for their contribution.
Joe notes that there are Entrepreneurs that are willing to take risks, walk out on the edge and sacrifice everything they own to grow a business and put in hours and years of effort while the workers are at home relaxing with their families. Entrepreneurs are the ones that put it all out on the line and they are a different animal. They live and breathe by the idea of working harder and being rewarded more for the more work, but not everybody is interested in that level of risk. Not everyone is cut out to be an entrepreneur and so we must respect those differences and have to give them what they want and need and what is fair and so incentive plans on their own are a disaster.
Something Joe has a strong opinion on also is that every pay plan has a mortality rate, it will live and eventually die because things change. You must be aware of that and develop in advance so you can roll into new plans as people and conditions change. In the United States for example, flat rate payment plans were popular for decades and Mainline was part of that logic; if you don’t produce, you don’t eat, it was a built-in incentive. They felt that if you paid people on an hourly rate, they would lose productivity. Others argued that a flat rate pay plan or commission pay plan breeds shortcuts and poor quality.
The truth of the matter is what drives quality is the culture of the company, what expectations have been set and what measurements are in place. Joe found that the best way was to agree to pay his people any way they wanted to be paid. Hourly, no problem, flat rate, can do, commission, yes sir or salary within the confines of the labour laws, no worries. He found over time that people just wanted to be compensated fairly and have that job security and confidence that they were making a good cheque, just by doing their part. They did their part, and the company did theirs in exchange. Bit by bit everyone gradually moved over to an hourly plan which gave them more flexibility to move people from one job or department to another as the company needs ebb and flow. It helped to build unity and teamwork. We were able to redirect staff without the kick back of “it’s not my job!” Instead, the response is “I’ll drop what I am doing in a heartbeat to go and help my friend or workmate.” Maintaining team culture is more important than incentivizing team performance.
When the overall business has a win, everyone shares in that win.
You can still win individually but it is important that overall, the whole sales targets of the business is being achieved.