Traverse City Record-Eagle

Business

June 7, 2014

Ag Forum: Using incentive programs on the farm

TRAVERSE CITY — Incentive programs can be a way to bring attention to certain goals, or key performance indicators, on your farm.

By creating incentives for reaching a goal (or disincentives for failing to maintain a goal) we highlight that goal as important. In fact, if you have one goal that you incentivize, you have effectively told employees that goal is the most important part of their job. After all, it is the one part of their job that you will pay them extra for.

Having an incentive tied to one goal can certainly bring focus to that part of the job, but it also can have some potential downsides. First, we need to make sure other areas are not being compromised to reach the incentivized goal, and second, we need to make sure we have put emphasis on the right goal in the first place.

On dairy farms a very common goal to incentivize is somatic cell count (SCC) level. Dairy producers want to produce quality milk, and milk companies are willing to pay extra for quality milk. Quality milk has a better shelf-life, and has higher yields when producing products like cheese. SCC is also measured on a regular basis, so it is easy to provide an incentive/disincentive that actually ties to how employees are doing their job now. All these factors make SCC a fairly easy goal to apply an employee incentive to, and the reason that I, as a Michigan State University Extension Dairy Educator, see SCC incentives being used on so many farms. In addition SCC incentives can have a positive effect on employee performance and the quality of milk produced. So what can go wrong?

First, there are ways to reach a lower SCC that may not be the best solution for the farm. High SCC cow’s milk could be withheld from the tank. High SCC cows could be culled. But do these solutions address the root of the problem, or do they just cover it up? Anyone can dump milk or sell cows to reduce SCC, but it’s an expensive, short-term fix. Employees that receive an incentive for low SCC only could easily be led toward one of these “solutions” without adequate controls.

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