Fostering Exceptional Performance Through an Employee Rewards Program

A reward system encourages all employees to do better. However, with these programs, companies often focus on moving the needle on their average employees, while top-of-the-line performers are ignored because they’re perceived as not needing any attention. However, when we studied exit interviews of top performers, we found the number-one reason they left was because they did not feel valued at their organization. Here’s how to use a reward system to ensure you don’t lose your top performers.

“According to our study, the number-one reason employees left was because they did not feel valued at their organization.”

1 Set expectations. Prior to establishing the program, set specific expectations for each employee using SMART goals (Specific, Measurable, Aligned with your values, Reasonable, and Timely). Let’s say that you expect one of your sales professionals to sell $100,000 per month. Metrics could include the number of sales calls the person needs to make per week, and the number of referrals they need to strive for from clients.

2 Create a sense of ownership. Cultures that create a feeling of belonging and a sense of ownership have led to the highest employee productivity. Determine what a sense of ownership would look like for each role in your organization. For example, one of our clients has a tiered commission structure for salespeople who go above their sales quota. The regular commission is 35% percent of gross profits for the company. If they surpass their monthly commission schedules, they get an additional 5 percent in commission for the entire sales amount. Once the incentive was put into place, the company grew its sales by 24% over a 12-month basis after previously having had a declining sales curve for years.

3 Reward more than performance. Performance alone leads to non-productive competition among team members. Instead, pair individual reward systems with company-wide incentives to foster cooperation and teamwork. One idea: as an alternative to a financial incentive, hold a company-wide event, such as a free lunch, once a major company milestone has been achieved. Recently, a large oil and gas company hosted an all-expenses-paid day at sports entertainment facility Top Golf for the winning team and their families after achieving a major goal in safety ratings. The leader of the group went to each team member individually and thanked them for their role in the successful completion of their milestone.

4 Execute consistently. We have seen companies make the horrid mistake of offering incentives for a period of time and then stopping it once it became “too expensive.” This is shortsighted thinking and a great way to increase turnover. Great people like to work within excellent organizations where they have some control over their future and feel appreciated for their work. For example, if you are going to host a party for your team after reaching a milestone, don’t let it be a one-and-done event. Set the next milestone, define the parameters for performance, and offer an incentive that matches the expected accomplishment.

Remember, if you are going to reward employees for exceptional performance, keep and raising the bar. Organizations that follow these steps can experience anywhere from a 15% to 25% increase in profits. How’s that for incentive?

Charles I. Alvarez
Charles Alvarez is president of Focal Point International, which coaches businesses to increase sales, or reach other goals. Contact me at