Friday, September 17, 2010

Tailor Employee Incentives to Their Wish Lists

I heard a remarkable idea for employee incentive compensation in a recent Chief Executive Boards International meeting. A member said that instead of cash bonuses, she rewards employees with things they specifically want. She scales the required accomplishment to the scale of the wish. She bought one guy hubcaps. Sometimes it's a round of golf (perhaps with a customer) at a high-end golf club. One of her employees is working on earning a trip to Denmark.

I'm regularly impressed with the ingenuity of business owners, and this is no exception. Here's an employer who's really in touch with her people, and personalizing their rewards to their own wish lists.
There are, of course, some potential tax considerations of this strategy. To be fully compliant, you'd need to include this compensation as W-2 income, and also include FICA. The way to do that would be to "gross up" the fair market value of the award and issue a payroll check for the amount of the gross-up, less the appropriate withholdings, resulting in a $0 check. Or not.

If you've invented some creative and effective ways of providing incentives to employees, please click on "Comments" below and share them with others.

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Terry Weaver

Chief Executive Boards International

Chief Executive Boards International: Freedom for business owners & CEOs -- Less Work, More Money, More Freedom to enjoy it

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