Have you ever found yourself saying to your child; "If you read your books for 2 hours, you can watch TV or you can attend that birthday party."
What you were doing at such times was ‘motivating’ your child to do the right thing. Offering an exchange: what you want them to do for what they want to do… make sense?
Now think about it, when your employer offers incentives for great performance; either monetary or some other kind of benefits, you probably are a lot more interested in meeting those targets, right? 😉
Whilst incentives are not mandatory, they can serve as great motivation for just about anybody whether young or old.
In short, even though we don't readily admit this, now and then, the primary reason we do what we do is because of "that little incentive" behind it.
If we agree that we as humans need incentives to motivate us to perform better; then let's find out how to apply this in our relationships with suppliers.
When it comes to supplier management, incentives play a great role in encouraging great work performance and smoothening relationships. This can be achieved with monetary and non-monetary incentives.
To get some great ideas for monetary incentives, check out our LinkedIn posts here.
Now let’s review some non-monetary incentives that are great motivators for excellent supplier performance:
1. Assurance of continued business: As is commonly said, the reward for good work is more work… and this is one area where that is very well received. Imagine the thrill that comes with knowing that an organization will continue to use your service, this of course will not just translate to more money for the supplier down the line but other benefits too. If my client assures me of more future business, I am more likely to give 200% to make them happy and bag that extra business. And who doesn’t want to continue to partner with a reliable supplier🤷♀️
2. Recognition letter: Just a simple letter saying well done and endorsing a supplier’s great work will inspire them to put in more efforts to reciprocate the gesture through even better performance. This is an easy, no-cost incentive that is quite appreciated especially when the supplier is a young growing business.
3. Awards: Take it a step further by granting awards to recognize the excellent performance of suppliers who have gone above and beyond in terms of quality, effort, and delivery e.g. Supplier of the Year, Most Innovative Supplier, etc. These kinds of awards encourage such suppliers to continue to perform well. Provided your organization is an attractive business, this has the potential to have the suppliers in your industry racing themselves to earn your prized 🏆 recognition.
Whilst monetary rewards have proven to be quite effective and can go a long way in motivating suppliers, oftentimes the drag back with this is the budget provision year in and year out.
These non-monetary incentives certainly have their place in motivating suppliers to deliver excellently and have over time proven to be very effective.
You can be sure to get the best results for your organization as a Procurement manager when you apply the right incentives in dealing with your suppliers.
Do you need help developing RFPs and scoring criteria, bidding, or conducting bid evaluations?
Simply visit Efemini Academy to explore our range of online procurement courses. And begin your journey to becoming a Procurement Expert!
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