In the last two columns, we have discussed compensation plans. We've taken a look at the various types of plans and identified the strong as well as the weak points of each.

While discussing these plans, we have only talked about base compensation that takes the form of money. Is there more?... merchandise... travel... recognition!

Many executives have asked: Do I need an incentive to encourage my employees to do a little more and, if so, do I run the risk of rewarding them for doing what I am already paying them to do?

It is important to understand that by instituting an incentive plan, you may well establish a precedent that may not easily be broken. Your employees may come to expect such programs and wait for them, thereby disrupting sales forecasts, cash flow, quality and other areas that are responsive to incentive programs. However, this does not have to be the case.

If you think that incentives may be of benefit to your organization, then you may wish to consider the following:

Do you have a specific need? Oddly enough some companies run incentive programs so often that the initial objective is obscured or totally forgotten. They have fallen prey to employee expectations.

Let's explore some of the reasons a company may want an incentive in addition to the basic compensation plan.

Introduce a new product. Putting a little hype into the dales force can often be the catalyst that will determine the success or failure of a new product introduction. Building momentum early is easier than trying to rescue a slow introduction.

Selling a product improvement in an established brand. This is an opportunity to get a "leg up" on the competition. It is worth some added expense as these opportunities don't present themselves every day.

Attempting to increase distribution. Often incentives to the sales force as well as the prospective distribution outlet can result in securing a new distributor or gaining greater exposure with an existing distributor.

Increase advertising effectiveness. An incentive program tied to an advertising campaign will often magnify the results of the ad campaign by giving it more visibility on a personal level. It can be the connecting link between the company, the sales force, the distributor and the end user.

Quality improvement, increased production or safety awareness. All too often we think of incentives as being used only to sell something. Many companies have been very successful in lowering scrap costs, increasing production, reducing absenteeism, reducing lost-time accidents and improving quality through the use of incentives for non-selling employees.

The use of incentives is much too wide a topic to be covered in its entirety here. However, if you feel you might like to consider their use, you should be prepared to answer the following:

1. Can you invest enough to make the program worthwhile for everyone?

2. Do you know enough about incentives to structure a program?

3. What will you use as a reward? Cash... merchandise... travel, etc.

If you will take the time to look into incentives and their uses, your will probably determine that a well thought out, well run incentive program can be a profitable addition to your base compensation plan.