Incentive programs are everywhere: tax-determined discounts, raises, bonuses, the list can go on. Some programs, such as healthcare and employee benefits, are mandatory while others, such as those that apply to nursing homes, are optional. There are also programs that offer cash awards for not just certain actions, but behaviors. One incentive program that is increasingly being used by not-for profit organizations is rewarding staff members for good performance.
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Other systems might look at finances to determine incentives for senior executives, but often give managers the opportunity to dock senior leaders based on poor performance. Not-for-profit hospitals are following the trend toward quality-based incentive programs. Currently, nearly two-thirds of not for profit hospitals use quality measures to determine incentive pay. In addition, they use financial metrics, job quality benchmarks, and other quality-oriented tools to evaluate senior management.

Hospitals that dock pay better than normal or fail to promote employees in front of peers, customers, and the senior workforce are using financial incentives to motivate workers to perform. These employers typically reward workers when they surpass a set goal, reach a specific target, or work on a specific project. They can also increase the likelihood of employees staying with the organization by offering bonuses, perks, and other incentives. For example, a hospital that gives a bonus to workers every five years when they reach five years of service may be rewarding senior executives with five percent raises over five years.

Incentive programs not only give employees a way to increase their performance, they also create a sense of value. When employees feel they are receiving an additional benefit, they are more likely to think properly. An incentive program may not improve a company's bottom line. However, the employee will feel as though he or she is contributing to the organization's success. This often leads to more engagement and a higher standard of work.

A bonus is more specific. It is not only given to a person when they have reached a specific number of goals but also given for achieving specific goals over a period of time. If an employee performs exceptionally in the spring, but a less-proficient colleague does the same in the summer, it will still show up on the year-end performance report. Companies that want to provide incentives for senior executives to succeed should take into account the performances of all employees, not just the best.

Rewards should be tailored to the specific needs of each situation. Some companies build-in rewards during recruitment, while others provide them only once a company member has reached a certain level. By carefully planning out the incentives, the human resources department can significantly increase the number of employees who feel they are valued by the company. Even companies that provide significant bonuses to workers for reaching specific goals should do so with employee input. The rewards should be dependent on the employee's actual performance.

Employees need to understand the exact benefits they will be able to receive. It is important for the human resources department to show all employees the exact benefits they stand to receive if they participate in the incentive program. Sometimes, these benefits are in the form of a percentage increase in their base salary. Other times, they will be granted an expense reimbursement, which can reduce the company's overhead costs.
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When it comes to deciding how to reward senior executives, it is important to remember that these executives make up a large portion of the business. Treat them with respect and do so in a way that demonstrates your appreciation for their years of service to the company. The rewards and incentives you choose to give them will likely reflect your own personal expectations for them.