No longer should incentive compensation based on individual performance be limited only to sales. Other industries, namely logistics and distribution, can benefit greatly from incentive compensation. Here are 3 reasons why these and similar industries should consider using incentive compensation on more than just their salespeople.
- Team-based compensation is often ineffective
Many industries that offer incentives for non-salespeople usually offer bonuses based on team or company performance. In this age of turnover, this might not be enough for retention.
If you have 10 employees, 5 go above and beyond, and 5 are lagging, giving bonuses based on team or company performance disproportionately rewards underperformance. This may cause your high achievers to leave your company.
- Supply-Chain companies will need to start standing out
In 2021, there were 10.4 million job openings, with 4.3 million people having left their jobs, according to the US Labor Department. Also, the turnover rate for supply-chain companies was nearly 50% in 2021. In this instance, the workers are the ones in demand. Simply offering a salary or yearly bonus will not be enough to make your company stand out, and the ones that offer more lucrative incentives will start to draw all the best talents.
- Incentives can flexibly support your needs
Incentives are best used to drive the right behaviors, rather than just rewarding success. Companies leading in incentives for manual workers are rewarding certain specific behaviors which positively impact the drivers of your business.
Common incentives used are incentives for deliveries on time, the condition of the product while in delivery, and usable and unbroken products being loaded at warehouses. By using incentives to drive these behaviors, these companies were able to improve the experience of their customers.
If you are experiencing high attrition in a non-sales space, consider how incentives based on individual performance could promote beneficial behaviors in your team. Incentive Compensation Management (ICM) software was originally designed for sales. However, it can be very easily used to manage incentive compensation for any department within your organization. The principles behind the technology are fundamentally the same, so there is nothing holding you back from offering and tracking unique and enticing incentives for any member of your team regardless of role. To find out how we have helped businesses implement systems to help incentivize their non-sales workers, reach out to info@bluehorizonsgroup.com, or visit our website at www.bluehorizonsgroup.com.