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The Best Ways to Incentivize a Salaried Employee


When you need to ask an hourly employee to put in some extra hours, the carrot you’re offering is obvious: more pay for more time, and potentially overtime pay as well. When it comes to salaried employees, though, it becomes trickier.

Without resorting to heavy-handed measures that kick morale straight into the dumps (threats rarely work the way people hope they will), how can you effectively motivate salaried workers to go above and beyond?

Provide opportunities to work towards their personal goals.

While you’ve got your company’s goals on the brain most of the time, those aren’t the only goals that matter in the workplace. Individuals also have their own goals: to learn new skills, take on new responsibilities, or to ready themselves for a potential promotion. Many of these are things you can help with.

Setting the Perfect Salary - free PDF download

If you have a salaried employee who wants to learn more about the work of another department or get an industry certification in a new area, you can provide opportunities to do so, on the condition that their work is excellent in [whatever specific ways you want them to improve]. Once there’s something meaningful to work towards (and a clear path for getting there), you may find that your employees are surprisingly motivated to complete tasks that were previously uninspiring.

Trade time now for time later.

If you have a need for extra work that is temporary in nature (as in the case of an emergency, an employee going on leave, or a seasonal bump in workload), one reasonable incentive is to compensate the employee with extra time off after the need has passed. This can be a structured offer (leave at 4 every day next month, or take off the next two Fridays) or relatively unrestricted, as in additional vacation days that simply appear in their PTO balance.

While this doesn’t need to be a strict one-to-one correspondence (everyone works late on occasion), it can help the temporarily overworked employee see the light at the end of the tunnel a little more clearly.

Share the benefits of good results.

Does your company practice any kind of profit sharing? If not, it’s worth looking into. This incentivizes employees at all levels to look for new ways to bring in and save money and to perform their job at as high a level as possible. This is especially true for smaller businesses, where the actions of any one contributor can have an outsized impact on the overall health of the organization.

If you’re not in a position to institute profit-sharing on a broader level, it may also be worthwhile to think about bonuses for individuals or teams that perform particularly well, especially in the face of an emergency or unexpected challenge.

When an entire team scrambles to make sure all customers are cared for when a key piece of infrastructure goes down, that’s the kind of behavior to reward not just with words, but also with funds. Just think of how many customers you would have lost had they not gone well beyond their job descriptions if the idea of throwing money away right when you need to make repairs makes you cringe. Accidents are inevitable. But good response time is priceless.

When all else fails …

If you have a salaried employee who simply isn’t meeting expectations and who seems immune to the “carrot,” it’s time to try the “stick.” Developing a performance improvement plan (PIP) for an employee doesn’t necessarily mean you plan to fire them (although this is generally the result if the employee fails to follow through on the plan), it means you’re having a clear and direct conversation about what is going on, where you need them to be, and what the consequences are if they’re unable to meet that level of performance.

Quite often, people are either oblivious to their own underperformance or the degree to which it has become a problem. Assembling a formal improvement plan removes these barriers and puts you all on the same page regarding expectations.

The biggest incentive of all is the prospect of a higher salary.

Significant merit-based increases (not just a standard 3% for anyone who isn’t horrible at their job) are one of the best ways to incentivize your employees, both salaried and hourly. Want to learn more about how to set a salary that’s just right for the individual? Download How to Set the Perfect Salary to get started.

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