About Andrew Perlmutter: Since co-founding InMarketing Group, Inc., in 1997, Andrew Perlmutter has poured more than 25 years of business experience into one dream: Revolutionizing the incentive industry through cost-effective programs that can be delivered online. He administered the first online incentive program in 1996.

Businesses that successfully attract and maintain a strong workforce are aware of two fundamental facts: Increased motivation improves performance, and personal reward and recognition are key elements of motivation.

For large corporations or small businesses alike, creating a strong incentive program can be the answer to human resource woes.

Most Americans are introduced to the concept of incentives early in life. We experience pride when a teacher awards us with an A+ or gold star on a grade school assignment or test. Perhaps we go on to earn a scouting merit badge, sports letter or a mention on a university Dean’s List. Some of us eventually earn military ribbons, Olympic medals or Academy Awards. Awards large and small recognize extraordinary personal performance and make us feel a sense of pride and accomplishment in our efforts and ourselves.

This same principle is vital in motivating employees and sales forces in today’s business environment. Awards for excellent work performance can come in the form of cash bonuses, merchandise or travel. Today, some human resources offices are incorporating tuition reimbursement and other creative rewards into their incentive programs.

To be successful, a business incentive program should be carefully designed by incentive industry professionals. It is important to create a program that is tailored to your company’s performance goals and the demographics of its workforce. A new development in the incentive industry is the ability to offer incentive programs online, giving employees and managers access to point counts and catalogs at the click of a mouse, eliminating costly catalog printing expenses and manual administrative hassles.

In order to develop effective incentive action plans, it is important to follow the following tried and true steps:

• Seek expert administration: Rely on a company experienced in all facets of incentive program development, administration, implementation and fulfillment to design your program.

• Identify "improvable" conditions: Incentive programs have traditionally been sales-oriented, but they can enhance employee performance in any work situation affecting day-to-day business such as service, new accounts, referrals and recruitment. Incentives can also support employee evaluation, retention and recognition and can be used to extend customer loyalty.

• Establish attainable goals: Set realistic goals that participants can reasonably achieve. Avoid aiming beyond their reach. Incentive programs should never be structured as contests with awards only going to top performers.

• Determine a reasonable timetable: Allow sufficient time for employees to achieve the prescribed objectives, but the time should be short enough to create a sense of urgency and discourage procrastination.

• Establish administrative systems: Easy to understand rules and methods for reporting, tracking, rating and recording participant performances are crucial. Participants must understand the objectives and be comfortable with program expectations. Complicated systems that confuse or frustrate participants can be the downfall of an otherwise potent plan.

• Create effective communications: Successful incentive programs must be nurtured and promoted. Participants should be encouraged and applauded. The first step is a well-conceived theme and graphics that identify the program’s spirit and excitement. The best programs relate to the objectives, are easy to understand, and are memorable. It’s a good idea to maintain participant enthusiasm with scheduled theme-oriented promotional messages and reminders. Periodic status or ranking reports keep participants informed of their progress and standings. Using a Web-enabled incentive program makes communication easy, immediate and efficient.

• Provide meaningful achievement rewards: Incentive awards aren’t "won," they are earned and, therefore, the quality and perceived value must reflect the extra effort required. Awards most often fall into three classifications: Cash, merchandise and travel.

Extensive studies have concluded that cash awards are the least effective motivators. This is particularly true with commissioned sales people who, if money were an incentive, need only sell more units to increase their income. When cash bonuses are provided, their sales actually decrease because they don’t need to sell as much to earn the same income. Cash awards also have no lasting "trophy" value. A wide selection of merchandise is a powerful award medium, providing participants with the "luxury of a choice," or the ability to work for one or many items most appealing to them. Limited, pre-selected merchandise awards are far less effective.

Travel awards continue to excite and motivate and have evolved over the years into three categories: Group travel, pre-packaged individual travel and the most recent "design-your-own itinerary."

The caliber of rewards in non-incentive type recognition programs is equally important. Employees who meet prescribed criteria should expect personal and public acknowledgement. Certificates, plaques and trophies are displayed proudly, as are emblematic jewelry such as lapel pins, pendants and the traditional gold watch. Many companies augment recognition with merchandise and/or travel.

Whatever form of awards you choose, be sure they are equal to the performance, are desirable, have lasting value, inspire pride and reflect your company’s image.

• Establish realistic budgets: The finest incentive plan will not succeed without a sufficient budget, nor will an abundant budget salvage an inadequate plan. Take great care to assure that the plan and budget are compatible. Incentive industry professionals will help you work out your budget.

Incentive programs encourage positive human behavior by creating challenges, aroused enthusiasm in the workforce, encouragement and appreciation. The principles related above, though briefly described, are each an integral part of an efficient incentive and recognition program. Each element is essential to the ultimate success of your creation. Good luck!