Forums: Discussions for entrepreneurs and small business.

Hello:

We are a small web services company currently of about ten people operating in two countries (US and Brazil) with plans to expand operations into Europe this year. We are looking to create an employee incentive program to encourage our employees to do their best. We don`t have a problem now we are trying to solve with this, but we think employees who go above and beyond deserve something special. Sure, we can give them a bonus (and do), but I am trying to be creative with this.

Also, of you who are small to medium sized companies, what type of employee stock-option programs do you all have in place? How is that working out for you in your business?

Thank you!

-Chris

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I`m not really sure we can do that in our business. Further, I`m not sure cash payments have a long-term catalyst for generating loyalty and personal investments among employees. Thoughts?

-Chris

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I`d also suggest the cash bonus, but I think it could be done objectively. As the bonus money flows, you then could work out ways to introduce equity interest in the company.

First would be a solid project management system for each client. In the outline, you`d have milestones directly associated with individuals. If they meet the target milestones, they get "points." Importantly, if they do NOT meet the milestones, nothing happens cash-wise, only your standard company discipline policies.

At the end of the project, points are added up and then paid out in a cash equivalent. As you can see, the cash could be converted to some other incentive at a later time.

Secondly, develop a customer satisfaction metric. For each project, if the team reaches a goal in satisfaction, each member in the team receives additional points. If not, they don`t lose points, just nothing happens (other than they get yelled at, or whatever you do). :-)

Since you`re not yet prepared to offer employees a part of the overall company itself, don`t discount the loyalty you can develop by consistent merit pay and cash incentives. Especially in today`s economy!

Mark, I think you may be over-simplifying just a bit. Let`s say it`s 1995 and you work for Microsoft. "Would you rather have $1,000 in cash or a thousand dollars of Microsoft stock?"

Okay, that`s a good point---that given the cash, it would be your choice to use it to buy the stock. Hadn`t thought of it that way. :-)

It seems overly simplistic, but is often true, i have found, that cash talks.