NFIB

Increase Work Quality With Financial Rewards
06/ 20/ 2003

by Jeffrey Moses

Motivating employees to produce quality work is not always easy for small-business owners. Whereas large corporations can easily provide financial incentives for a job well done, small businesses do not have the luxury of discretionary funds and often do not have enough resources to provide for employee motivation.

There may be a way, however, for your small business to offer financial incentives to employees who produce quality work, without losing money.

Many companies budget funds for warranty and other repair work. Since employees do not always produce quality goods and services, most companies set aside a certain amount of money during the course of the year to correct work that does not meet customer expectations. When this is the case, a sure-fire quality-control program can be implemented by offering to share with employees any unused budgeted funds. Knowing that there is a financial reward available to them, employees will be more likely to work effectively, placing greater care on the quality of their work.

With a program like this, however, it is important to be specific about the potential reward, as you do not want animosity to develop among your staff because of false expectations. If the budgeted amount for warranty work is $5,000 a year, send out a memo that explains, for example, that the amount left over at the end of the year will be distributed equally to employees.

The results of this reward program can be far-reaching. Since the company budgeted this money to be spent anyway, giving this money to employees will not cost the company anything. Also, not only are employees more motivated to achieve excellence in their work when the overall quality of work improves, but there will also be fewer returns and greater customer satisfaction. In the short term, this will translate into increased sales; in the long term, it can take your small business to a new level as word-of-mouth, one of the most effective types of marketing, spreads about the quality of your business's products.

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