Staff Incentives (Discussion Transcript)

This is the Summary for the Speakers Corner #24: Staff Incentives that took place on April 15-17, 2008.

According to the “Banana Skins Survey 2008” among 300 microfinance stakeholders, staffing is one of the biggest and fastest rising risks in microfinance institutions (MFI). Staff incentive schemes (SIS) play a key role in a human resources strategy: not only do they influence who gets hired and who resigns, but they are mainly designed to increase organizational efficiency by enhancing staff productivity and loan portfolio quality. A worldwide survey on the use of staff incentives conducted by the MicroFinance Network (MFN) and the Consultative Group to Assist the Poor (CGAP) has revealed that most MFIs use incentive schemes and that practitioners’ perceptions are largely positive. Poorly designed systems, however, can quickly backfire and produce negative effects on staff motivation.
 
This Speakers Corner attempted to reveal best practices in the design of efficient staff incentive schemes. Co-hosted by the MicroFinance Network, CGAP, and USAID, it was moderated by Mattias Grammling, Martin Holtmann and Martha Ottenbacher.