Employees
January 27, 2017

4 Traits of an Effective Farm Employee Incentive Plan

 |  By: Anna-Lisa Laca

As labor becomes harder for farmers to source, holding onto employees is more critical than ever. Sometimes, paying a living wage isn’t enough to keep employees happy. Many farmers are looking for benefits they can provide employees to improve retention rates.

An employee incentive plan is one way farm owners can encourage key employees to stay, according to Peter Martin of K·Coe Isom. Although many farmers offer employees extras, Martin warns those benefits should be tied to behavior.

“Quit just handing out money,” Martin told attendees Thursday, Jan. 26, at the 2017 Top Producer Seminar in Chicago. He says there are four traits of an effective incentive plan.

1. Frequent Payment. Although there are administrative burdens tied to distributing incentives, the more often you can pay your team members, the better, Martin says. “Ideally, we would do this monthly, but at a minimum quarterly,” he says.

2. Transparency. It’s critical that details of the incentive program be understood by all employees. Martin notes employees often are skeptical about a bonus-distribution process is in place or if bonuses are handed out at the whim of their employer. “You’ve got to walk into this willing to be transparent,” he says.

3. Employee Control. Team members should know exactly how to achieve their incentive bonuses. In addition, they should have the ability to control that aspect of their compensation. Managers and laborers should have different metrics for reaching their bonus, Martin says, adding: “Metrics can be qualitative or quantitative.” `

4. Focus On Growth. Incentive programs should benefit areas of expansion for the farm, Martin says. “Really, incentive programs shouldn’t cost you anything when you consider the benefit the farm is receiving as employees meet incentive goals,” he says. 

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