25 Ways to Manage Your Incentive Budget Wisely

25 Ways to Manage Your Incentive Budget

Incentive’s 25 Ways to Manage Your Incentive Budget Wisely offers insightful tips for getting a budget approved, spending it wisely, and protecting it when times are hard.

  • Getting Upper Management Approval
  • Partnering with Suppliers
  • Spending Strategically
  • Leveraging Technology
  • Protecting Your Incentive Budget
  • Cutting Strategically
  • Making the Case for Value-Based Awards Selection

25 Ways to Manage Your Incentive Budget Wisely is brought to you by Citizen Watch Co.

Get maximum impact out of your motivation spend

Incentive’s 25 Ways to Manage Your Incentive Budget Wisely offers insightful tips for getting a budget approved, spending it wisely, and protecting it when times are hard.

  • Getting Upper Management Approval
  • Partnering with Suppliers
  • Spending Strategically
  • Leveraging Technology
  • Protecting Your Incentive Budget
  • Cutting Strategically
  • Making the Case for Value-Based Awards Selection

25 Ways to Manage Your Incentive Budget Wisely is brought to you by Citizen Watch Co.

Get maximum impact out of your motivation spend

PROTECT YOUR INCENTIVE BUDGET

Budgeting for incentive and recognition programs takes careful planning in order to be successful. There are common formulas and metrics for building a program budget that all have merit, such as:

 

PERCENTAGE OF COMPENSATION

 

According to a recent survey from WorldatWork, organizations that use this method budget an average of 2 percent of payroll for incentive and recognition programs; however, the median amount is 1 percent, with some organizations going as high as 7 percent.

 

PERCENTAGE OF ACHIEVEMENT LEVELS

 

Other organizations prefer to set aside 5 to 10 percent of the value of the expected improvements as the budget for the program.

 

FIXED BUDGET DESIGN

 

This method caps the total number of winners, such as the top 20. This allows the organization to establish a firm budget number right from the start of the program.

 

OPEN-ENDED DESIGN

 

This strategy does not put a limit on the number of winners — everyone who reaches the goal earns the award.

 

These standard guidelines all help create a structure to track an incentive budget once it is approved, but they do not help organizations get approval of the budget to fund the program or get the most out of how the budget is spent once it is established.

 

25 Ways to Manage Your Incentive Budget Wisely is brought to you by Citizen Watch Co.