Employee Incentive Strategies to Apply in Your Business

How can you better motivate your employees?

Every company experiences employee engagement issues from time to time. It may be because of company circumstances or situations that are personal to employees.

Fortunately, organizations can use incentives to reward, validate, recognize, and help motivate employees. Numerous types of employee incentives are available that help create a positive, engaged company culture. Used strategically, incentives can enhance employee satisfaction, increase motivation, boost productivity, and ultimately improve your organization's viability.

What Are Incentives for Employees?

Employee incentives are rewards or benefits employers offer to help engage, motivate, and encourage their workforce. Incentives typically aim to compel employees to perform better, meet goals, and "go the extra mile" on initiatives.

An incentive program can focus on a single incentive or it can include a mix. Creating the best employee incentive program for your company requires taking a look at company values and

budgets and identifying rewards that appeal to employees. The choices hinge largely on what individual team members deem valuable.

Some of the most common types of employee incentives are:

Financial Incentives

Money is a language we all speak, which is why cash is frequently used as an employee incentive. Financial incentives include:

• Bonuses
• Profit-sharing
• Salary increases

The benefit of using financial incentives is that almost everyone is somewhat money-motivated. Plus, it allows employees the freedom to ultimately choose their reward (they can save it, go on a vacation, buy something, etc.).

One downside of financial incentives is they can strain the company's budget. This issue is especially true if the incentives aren't tied to goals directly impacting an organization's revenue.

Travel Incentives

Visiting a new city or country may be high on many employees' lists. Travel-related incentives are another popular way to increase employee motivation, so they put in the extra effort to meet the desired goal.

Examples of these travel incentives are:

• Company-sponsored trips
• Team-building getaways
• Incentive travel packages (for the employee and a guest)

When it comes to traveling with co-workers or loved ones, family and friends are slightly more appealing.

Travel incentives offer employees chances for a unique experience and a break from their daily routines. However, they don't motivate everyone, like those with family obligations, health issues, or employees who don't enjoy traveling.

4 Ways HR and Travel Leaders Can Better Meet Employee and Business Needs

In the last few years, workforce dynamics have shifted perceptibly as employees assessed what they really needed from their employers – more flexibility, balance, opportunity, equity, and satisfaction. This assessment coincided with another significant transformation: swift technological advancement that automates dull manual tasks, brings data intelligence to decisions, and gives people more freedom in how they work.

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Recognition Programs

Many employees crave praise, appreciation, and gratitude as much as they want financial or other rewards for their hard work. Recognition-based incentives can work well for motivating these team members and keeping their job satisfaction high.

Successful recognition programs may include:

• Public acknowledgment
• Recognition at events
• Peer recognition
• Personal thank-you notes
• Flexible work arrangements
• Employee of the month/year awards

One of the biggest advantages of using recognition incentives is that they help build a positive company culture where employees feel valued and appreciated for their hard work. One downside to these types of incentives is, if they seem disingenuous or are doled out inconsistently, they won't have the desired effect on employee morale and engagement.

How to Create an Incentive Program for Employees

An employee incentive program can have an enormous return on investment for companies looking to keep their workforce happy, feeling valued, and working productively. However, the plan must be designed, executed, and maintained properly to get the most out of the effort.

If you're thinking about implementing incentives for employees, here's a list of helpful strategies for creating a program that will produce exciting results.

Define Your Objective

Incentive programs for employees should begin with a goal. How can they help increase employee satisfaction and inspire them? Where can improving employee performance contribute the most to your organization's success? Your objective may be to increase sales, retain customers, promote teamwork, or encourage creativity. Whatever you decide on, it should be a concise goal everyone will understand.

Pinpoint Employee Preferences

Even the best laid-out incentive programs won't perform well if you don't consider your employees' wants and needs. Conduct surveys and request individual feedback on what employees would most like to receive as a reward for a job well done. The most popular answers are good starting points for building your incentive strategy.

Set Realistic Goals

A statement like, "If you double our sales, you'll get a really nice surprise" probably won't motivate anyone. These types of to-the-moon expectations and vague promises may actually irritate your employees and do more harm than good.

Putting achievable milestones in place is necessary for any incentive program to work. If employees feel like the goal isn't reachable, they probably won't put in the effort to even attempt it.

The incentive objectives should clearly relate back to broader company initiatives. Remember, clarity is key in setting up a successful incentive program.

Choose the Incentives Carefully

Weigh the company objectives and the preferences your employees have shared against your budget and come up with appropriate incentives. Also consider that high value incentives may affect employees’ tax situations. Ensure they won’t create an unnecessary burden at tax time. Making the right choices go a long way toward improving the employee experience, boosting motivation, and keeping employees engaged in the company's mission.

You may decide on a single incentive, such as a cash reward, a group trip to a fun destination, or time off work, or you may come up with a more comprehensive set of incentives to motivate your workforce. Be sure to keep the incentive proportional to the objective. For example, if you're aiming for a huge sales push, the reward would most likely be bigger than if you were incentivizing a single project's performance.

Check out this E-book: A Guide to Managing Taxable Employee Benefits

Establish Transparent Rules

Award incentives fairly and transparently by communicating the eligibility criteria, evaluation process, and incentive structure to every employee involved. Communication is key for building stronger teams and establishing trust. If you have a difficult time explaining it, the program probably may be too complex to be effective.

Every incentive program you create should be equitable and fair across your company.

Track and Monitor Progress

Perhaps you’ve seen other incentive programs start strong and then fade out as time passes. This breakdown can do more harm than good to employees, causing further disengagement and distrust in management. Set up monitoring practices before the program begins and review them regularly to see the progress. Report the performance to stakeholders to keep engagement alive.

Offer Regular Feedback

If you structure your incentive program to include a competition, plan to continue communication about it. Give participants regular updates like who's ahead and how close everyone is to the goal. Offer constructive feedback, celebrate milestones, and mention the ultimate prize often to keep employees excited and motivated.

Deliver as Promised

Recipients who work hard to meet incentive goals don't want to wait to get their compensation. When the incentive time period is over, promptly award what employees expect. If it's a monetary bonus, pay it quickly. If it's a trip or other non-monetary reward, announce the date and details immediately.

Incentive Programs for Employees Can Return Big Benefits

Using incentives for employees can help motivate your workforce, increase their job satisfaction, bolster confidence, and improve productivity. However, the types of incentives that work for one company may not be the best choice for others.

For the best results, you should make an effort to understand employee preferences before offering incentives. You must also make the incentive easy to understand and realistic to achieve. That way, you can create a compelling program that has high employee buy-in, helps boost itself to a positive company culture, and positively impacts contributes directly to the bottom line. You can get more valuable tips for improving your organization’s employee experience here.