We continue to talk to people who have employee incentives, performance, and reward systems that are managed with spreadsheets. Maybe you know of someone who is trying to keep track of this stuff by hand. Even if you use shared documents, or a shared environment like SharePoint or Google Docs, you are setting yourself up for problems.
What problems? Well, we’re glad you asked.
Here are just a few reasons why it is not good, perhaps even dangerous, to manage an incentives, performance, or reward systems manually:
Juggling too many things
Being the keeper of someone’s incentives is serious work. We want to make sure someone gets their incentive timely and accurately. At Snowfly, we’ve learned that the longer someone has to wait to receive an incentive, the less it means to them. However, receiving an incentive reward immediately is highly motivating.
If the person who has created, or who is managing, the incentives program has other things going on, they might not be able to ensure incentives are delivered on time. And sometimes this might impact accuracy. Of course, many organizations or systems don’t need a full-time person to manage incentives, which means that person will have other jobs to do. Totally fine…. until those other jobs get in the way of timely and accurate incentives.
Pressure on the person incentives depends on
The only other person who might have the level of continual stress about accuracy and timeliness similar to whoever manages incentives is the person who is in charge of payroll. I’ve heard horror stories about payroll managers… especially the payroll managers who do payroll by hand (yes, really).
Want to have a nice three day weekend? Or take a vacation? Just don’t do it when anyone on your team is expecting money to hit their account. The pressure on payroll managers and admins is almost unfair. They definitely need to remove themselves from the critical path of getting payroll delivered correctly and on time.
Really, whoever is managing the incentives systems is probably under an immense amount of stress, too. Stress to be completely accurate, with paperwork to back up why the numbers are they way they are (in case someone disputes an amount), and stress to make sure it is not one minute late. That’s asking a lot on one person.
Very poor contingency planning (“hit by a bus scenario”)
As a business owner I need to look at each critical part of the systems I have to run my company and think about what would happen if any critical part went down. If you don’t realize this yet, the person who manually runs your incentive system is one of the most critical parts. If they mess up, or something happens to them (heaven forbid they get hit by a bus and are out of commission for months), you will have a problem.
Your employees expect a few things from you, including getting paid properly, and for you to honestly pay the agreed-upon incentives. You can’t just take that away from them because the person who runs that part of your business isn’t accessible. The “hit by a bus” scenario could very easily be the “got sick and am out indefinitely” or “decided to quit and go somewhere else” scenario. This is one of the most important promises you have given to your employees. Make sure you are ready to deliver on it, no matter what.
Potential for mistakes and miscalculations and fraud
Incentives can be very complex system. A typically incentives spreadsheet could have a lot of logic, calculations, sheets, and columns. The mastermind behind the logic should be applauded for having created something so beautiful, so helpful, so important.
But in that beauty and complexity there could be mistakes. Mistakes in calculation can be serious… leading to misspending, or charges of fraud. I’m certainly not suggesting your incentives administrator is a bad person, but who wants to be in a position where inaccuracies can have such serious consequences. Moving to an automated incentive system (which is exactly what Snowfly does) is as much a protection to the company as it is to the person who is over incentives.
Cost vs. flexibility and scalability
What happens when you need to make changes to your incentives formulas? What if your company onboards fifty (or five hundred) new employees?
You *could* update your logic and change the equations… but will making any of those changes have a domino effect and break anything? Look, we all know how messy spreadsheets can get! The cooler it is, the more complex it is, the more fragile it can become. But if you haven’t created a system (yes, a spreadsheet can be a system) that allows you to grow and shift to the organization’s needs, you might be setting yourself up for a very stressful time when employees are expecting money in their account and you are still tweaking your spreadsheet.
There are other reasons to switch from the spreadsheet and manual incentive program to an automated program. We’ve been doing this for decades, and we’ve seen a lot of (good and bad) things. In addition to taking advantage of our automated tools for employee incentives, employee performance, and rewards, you’ll benefit from the years of incentive psychology that we have built into your systems.
And then, your incentives manager can take a vacation without worrying about payments getting messed up!
We would love to talk to you about your incentives system. Reach out to us and let’s talk!