> INCENTIVES TO INSPIRE
Finally, track its effectiveness, and if LOWER OVERHEAD COSTS
If you have an employee who manages your overhead costs, incentivize them to lower those monthly or yearly payments by giving them a portion of the savings. “If they can save $500 a year on your insurance, you can easily give them a $100 bonus,” says Dan McManus, founder and president of TeamFloral, a floral marketing and consultancy firm.
it’s not working as intended, tweak it or try something new. “You can’t implement an incentive
Dos and Don’ts
Don’t tie incentives to factors outside the employee’s control, says Dan McManus, founder and president of TeamFloral, a floral marketing and consul- tancy firm. If you’re offering sales staff a $1 bonus for every plush sold, don’t stip- ulate that you’ll only pay out if they take 20 calls that day. “They have no control over how many people call the shop,” he says. Any caveats should be directly tied to things they can impact.
Do reward easy wins. If you’re trying to increase your average order value, create a tiered system with a low bar that’s easy to reach. It will motivate staff to reach higher next time. For example, offer $1 for every $59 arrangement sold, $2 for $79, $3 for $99 and $5 for $119. “You want to have some low wins for them,” McManus says. “It primes the pump.”
Don’t create a program so complex that employees can’t tell whether they’ll meet the goal and be rewarded. “It needs to be something they can measure so they know if they’re on track to hit it,” says Derrick Myers, PFCI, CPA, CFP, presi- dent of the accounting firm Crockett & Myers Associates. If they put in the effort and are blindsided when they don’t hit the target, they’ll be less likely to try again.
Don’t incentivize maintenance. If your cost of goods sold is 35% and you incentiv- ize staff to bring it down to 34%, that incentive program is finished and 34% is the new normal. Reset the goal at 33% and encourage your staff to find other ways to tighten up. “We can’t just keep incentivizing the same thing,” Myers says. “Keep them working harder and smarter.”
Don’t let incentive plans stagnate. If you’re paying out $1 for every box of choco- lates sold, staff will eventually get tired of pushing chocolates. After a brief period, stop incentivizing sweets and reward staff for selling balloons instead. Myers sug- gests changing it every week or month to keep things fresh and exciting.
Don’t incentivize a task that encourages employees to cut corners. That can create more problems than it solves. For example, paying drivers a bonus for in- creased deliveries can lead to speeding or other dangerous driving tactics.
Do ensure that work is divided fairly between designers being paid per piece. If you give one designer all the expensive orders, it can foster animosity, says Chris Drummond, AAF, PFCI, of Penny’s by Plaza Flowers in Philadelphia. Employees will leave if they feel like you’re playing favorites.
26 FLORAL MANAGEMENT | March/April 2025 |
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program unless you have good measure- ments,” says Chris Drummond, AAF, PFCI, of Penny’s by Plaza Flowers in Philadelphia. He has been implementing a pay-per-piece incentive program for his designers for about 15 years and has led education sessions on incentives with Myers at the Society of American Florists’ events. “If you’re going to pay based on certain reports, then perform your due diligence to make sure the reports are always accurate.” Drummond uses his shop’s POS
system to isolate each designer’s output. It takes very little time to run the reports and determine each designer’s com- pensation, he says. Over the years, his designers have become more produc- tive, increasing their pay and the shop’s revenue.
Policies and Payouts Regardless of what incentive plan you implement, make it official, Myers says. Draft a policy and have your employees sign that they’ve read it. If you make changes, update the policy and have staff sign again. Keep it on file and avail- able in case there are any questions or concerns in the future. “We basically say this is what
the employer will provide, and this is what we expect out of the employee,” Drummond says. “I don’t want any ques- tions down the road or any ambiguity. I want it to be very clear.” Include when and how you’ll pay out
any earned compensation. McManus encourages handing out cash every week, if possible, especially for sales staff. It generates excitement and pro- motes the feeling of accomplishment. They can see and feel the bills, making the incentive immediately tangible. They’ll want to reproduce that feeling the next week, making them self-moti- vated to hit the target again. If you pay in cash, however, don’t do
it “under the table,” McManus says. Any compensation paid to an employee must be reported. Include the incentive bonus as a separate line item on the employee’s paystub. If you have already paid the
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