The advantage of project incentives is that the company can target the employees we want to retain. Unlike our overall compensation philosophy, flextime, and training, which are available to everyone, project incentives are tailored to the employees and the circumstances. Usually, the incentive is for a dollar amount to be paid at a certain date. Employees have reasonable expectations of reaching the goal and earning the bonus. For example, companies need three employees with specific skills to start a new distribution center. We give each of them an incentive to stay: “If you stay with us for 13 months to complete the project, we will pay you $10,000.”
The design of project completion plans is simple: If the employee stays with the project for the stipulated period, then he or she gets the predetermined bonus.
Another example: Company want employees to stay with it through a merger. At the end, their jobs will go away. How big does the bonus have to be? The terms of the twenty first century employment relationship cause managers to throw out the old guidelines. It used to be that managers offered bonuses of 10%, and they usually worked. Now there are no rules. Managers need to consider:
- Motivations of individual employees.
- Length of time needed.
- Value to the company of retaining employees and the impact if we do not.
If there is a group of employees that the company wishes to retain, then there is the probability that a 15% to 20% bonus will work.
Development and Career Opportunity
“What will you do to retain me?”
“I will give you opportunities to develop and use new skills.”
The twenty-first century employment relationship should redefine development and career opportunity. In the old employment relationship:
“Development” was classroom training to gain technical skills required by the job.
“Career opportunity” was moving up the hierarchy.
The new definitions are:
“Development” is gaining new skills, taking advantage of many different methods of learning that benefit employees as well as the organization. Employees benefit by experiencing greater satisfaction about their ability to achieve results on the job and by taking responsibility for their career. At the same time, the organization benefits by having older employees with more skills who are more productive.
The words “career” and “opportunity” are no longer tied together. “Career” means moving around in an organization and between organizations as well as up. “Opportunity” means the chance to learn new skills. Job offers are evaluated from the perspective of their contribution to the employees’ learning and future employability rather than the status of the job in the organization’s hierarchy.
According to survey data, employees respond that the availability of skill development opportunities and career movement are key attractions. That came through clearly in the research conducted for this paper. The top three reasons for leaving the last job were (Dibble 1999, p. 65).:
“Lack of career opportunities”—1st place, 32%.
“No opportunity to move up”—2d place, 29%.
“Dead-end job”—3d place, 25%.
Analyzing the reasons employees are attracted to their employer the following is seen:
“Career opportunities”—7th place, 45%.
“Skills development opportunities”—12th place, 36%.