Difficult economic conditions present businesses with a challenge: how to strike a balance between safeguarding the interests of the business while also looking after employees. HR experts believe the issue is about sustainability and how best to leverage off commission models and incentive schemes.
Businesswomen’s Association of South Africa (BWA) award winner Teryl Schroenn, CEO of Accsys, asks “Do these models and schemes drive the correct behaviour?”
Based on her experience and knowledge of the market, combined with extensive research, Schroenn believes that incentives and rewards will be effective if they are part of an overall approach where recipients (those who stand to benefit from incentives and commissions) buy into company objectives.
“Otherwise they may be seen as a risk mitigating model rather than a reward system,” she says.
“We have to look at this a bit deeper and ask whether or not the opportunity to up your personal income encourages long term commitment to growth,” Schroenn continues.
This question is relevant to everyone in the business and the impact of incentives and commissions on a company’s culture will affect all stakeholders across the board – from junior members of staff who may be waiting for a bonus to senior management who are on profit share schemes.
Schroenn contests that although there is a school of thought which suggests that additional incentive schemes are unnecessary for businesses that pay the right salary and cultivate the right culture, businesses that pay commission based on financial performance will have a different view.
“It certainly makes sense not to treat each year in isolation when you incentivise executives, but to design rolling reward systems that build to a good pay-out for consistent performance over a period of years,” Schroenn concludes.
