.svg){kind=small}
Employee Incentive Programs: 14 Examples & Best Practices
Published on:
November 22, 2024
Updated on:
November 25, 2024
Share
.svg){kind=small}
.svg){kind=small}
.svg){kind=small}
.svg){kind=small}
.svg){kind=small}
.svg){kind=small}
The discussion of employee incentive programs has never been more relevant!
Why?
Because we employee disengagement has never been more prominent. According to the DNA of Engagement research report: Disengaged employees cost organizations around $450-550 billion each year.
And that doesn’t even begin to scratch the surface of just how detrimental having disengaged employees can be to an organization.
Another study, this time by Gallup, states that companies with engaged employees are %21 percent more profitable.
So the question then becomes: How can we foster long-term employee engagement?
We’ve highlighted plenty of employee engagement activities in previous lists and while activities are great, they are short-term solutions.
When it comes to keeping employees engaged in the long run, nothing quite works like a well-mapped-out employee rewards program.
Employee incentive programs also known as employee rewards programs are designed not only to retain and engage current talent but also to make the organization more attractive to the top talent in their industry.
Some of the most common employee rewards programs include but aren’t limited to the following:
Let’s start this list off with one of the simplest ways to reward your employees for their high performance.
The best way to incentivize your employees to perform at a higher level at the job you’re paying them to do is to simply reward their performance with cold hard cash.
Performance bonuses motivate employees to achieve higher levels of productivity and success, serving as a tangible reward for their contributions.
They can be structured around individual, team, or company-wide achievements, ensuring that employees are recognized for their direct impact
In an era where employee loyalty is a thing of the past, stock options just might be the best way to make sure your employees are actually invested in the success of your organization.
Offering stock options isn’t just a monetary incentive. It also fosters a sense of ownership among employees, encouraging them to contribute to the company’s long-term success.
Stock options can be particularly motivating in startups and growth-oriented companies where stock value has the potential to increase significantly.
As an employee incentive program, implementing a profit-sharing plan is another way to align employee interests with organizational goals.
In theory, if an employee makes a stagnant amount of money regardless of an organization’s success, then are they really incentivized to be invested in that organization’s success?
That is why profit sharing plans exist to distribute a portion of the company’s profits among employees, usually on an annual basis.
Profit sharing makes employees stakeholders in the company’s success, enhancing their commitment and loyalty in the long term.
The first nonmonetary rewards program on our list, employee recognition can be just as effective at motivating your team as any other incentive program.
Regular and formal acknowledgment of an employee’s hard work and achievements creates a culture of recognition organization-wide, keeping spirits high.
Employee praise whether public or private is one of the simplest yet most effective methods to incentivize your employees and empower them.
To implement this particular employee incentive program, all a team really needs is a simple employee recognition tool and a group of employees who appreciate each other!
Teamflect is a complete performance management software designed specifically for Microsoft Teams and it has a very intuitive employee recognition platform.
Send customizable recognition badges inside ongoing meetings or through Teams chat!
Assign points to each recognition and create leaderboards and live feeds!
Have your team cash their points out for rewards of your choice!
Teamflect not only streamlines your rewards and recognition system inside Microsoft Teams but also makes your recognition a part of your meetings, performance reviews, and everyday workflow.
Even with the number of organizations embracing hybrid work, flexible working arrangements still rank among the most coveted employee incentive programs among employees.
Offering employees control over their work schedules, locations, or hours, promotes a better work-life balance and is a great workplace initiative to undertake even without it being a part of an employee incentive program.
Rewarding employees with the freedom to dictate their own work schedule and setting is sure to result in reduced stress and higher productivity.
If there ever was a win-win when it comes to employee rewards, bonuses, or employee incentive programs, this would be the one.
A referral bonus is an incentive an employee receives when someone they refer to the organization starts working there permanently.
If we quickly take stock of the end result:
The employee just received a bonus and now has another friend in the workplace.
The company just recruited a talent with existing credibility, without going through the motions of a traditional recruitment process.
Everybody wins.
While there are many different criteria for the best employee rewards programs, one thing that always sticks out is that the incentive should benefit both the individual and the organization. At this specific order.
Professional development opportunities for your team fit this description perfectly. While they benefit your organization by helping your team develop new skills and perfect existing ones, they primarily help your employees build an arsenal of skills that will help advance their careers.
Professional development programs can include workshops, online course subscriptions, conferences, and more.
From mental to physical well-being, employee wellness initiatives are one of the best rewards and incentives you can provide your team with.
While some could argue that they are well past the point of being a must-have for all organizations, they can still be seen as one of the most viable employee rewards out there.
While wellness initiatives such as gym memberships or free healthy lunches can be the rewards offered at the end of employee incentive programs, they can also end up being the actual incentive programs themselves.
Setting wellness goals and checkpoints for employees and rewarding employees who hit those checkpoints will not only boost engagement in the long run but also result in a far healthier workforce.
In the world of employee incentive programs, this is essentially professional development opportunities on steroids.
Tuition reimbursement programs are employee incentives where the company partially or fully pays for an employee’s college tuition.
With just how crippling student loan payments are and how important getting or completing a higher education is, this is one of the best ways a company can invest in an employee’s future and inspire loyalty at the highest possible level.
Out of all the employee incentive options out there, additional vacation days just might be the most coveted of them.
While this still counts as a nonmonetary reward, it is key to keep in mind that this particular employee incentive pays your employees in free time, which some could argue is the only thing that can contend with straight-up cash.
Another benefit of this particular employee incentive is the fact once the recipient of this reward actually uses those additional vacation days, the company will have a more engaged, well-rested, and refreshed employee in their hands.
Gift cards are classic employee incentives that often get a bad rep. While nobody has a problem with gift cards as a reward, they are often used in comically unfitting situations.
“Someone on the marketing team just crushed all their monthly goals and set new records? Sure! Send them a 5$ Starbucks gift card! That seems fitting!”
This stigma around gift cards really knocks them down a peg as valuable employee incentives. When used creatively and appropriately, however, they can work like a charm.
Instead of a cookie-cutter and low-amount gift card for an established franchise, why not give your employees a gift card to a local establishment they’ve been meaning to visit for some time?
Gift cards are only underwhelming if they are used as employee incentives or rewards for achievements way above their pay grade.
While they might not be the most powerful employee incentives out there, giving your team small, fun, and creative gifts is a great way to create a positive atmosphere and boost engagement in the short term.
Building a positive company culture isn’t always accomplished through drastic long-term actions. Sometimes it takes consistent, small actions to make long term impact.
We’re not saying that the road to long-term employee engagement goes through happy sucks, funny mugs, or creative company swag.
Yet all those things can be used to pave that road and make the entire trip more enjoyable for everyone involved.
Salespeople of the world unite! Even though we’ve essentially touched upon a similar vein with employee incentives such as profit sharing or stock options, commission programs are employee incentives that specifically target salespeople.
When your employees get a piece of the cake they helped make, you can rest assured that they will be far more invested in picking out the best ingredients, tempering their eggs, and layering the frosting evenly.
Metaphors aside commissions have been the driving force behind successful sales teams for a long time for good reason. They simply work.
While most employee rewards programs target what your employees receive after a project or their experience during a project, or simply a lack of projects, one of the best ways to incentivize and empower your employees is to give them a say in projects.
Giving high-performing employees the right to choose their own projects isn’t just an incentive for employees to perform at a higher level.
It is also a method to ensure the high-performing employee will continue performing at a higher level since their next big project is one that they chose to take on.
Beyond just an employee incentive this is also ranks among one of the top project management best practices out there.
When creating employee incentive programs, one important thing to focus is to make them tangible and meaningful as rewards. For example, some employee incentive ideas could be performance bonuses, extra vacation days and professional development opportunities.
The best employee incentive programs are those that offer a combination of monetary and non-monetary benefits which helps cater to different employee preferences. In this way, your business will be able to make your workforce feel seen and valued.
Employee incentive programs are vital because of the part they play in boosting employee engagement, productivity and happiness. They are tangible acknowledgements of your employee's hard work. With clear goals and rewards in return, an incentive program will help align individual efforts with organizational objectives.
Well-structured employee incentive schemes cultivate loyalty and increase retention rates, both of which are vital for business growth.
There are many benefits of implementing employee incentive programs. To list a few;
Creating your own incentive plan should ideally begin with clear objectives and a well-rounded understanding of your employees' needs. You can also start by evaluating other incentive programs from various companies. From there you can make sure the actions you'll take regarding your employee incentive program, are in alignment with your organizational goals.
Once you have these steps clear, it's important to communicate the plan transparently and clearly to your team. That way you maximize the effectivity of your incentive program. Last but not least, it's important to note again that a combination of monetary and non-monetary incentives will be to your favor if you wish to create the best incentive program possible.
While it is very easy to divide rewards and incentive programs into various sub-categories such as;
And more, a very broad and encompassing differentiation can be made between different types of employee incentive programs as follows
While they both hold different implications and meanings, neither monetary incentives nor nonmonetary incentives should be excluded from the party.
Monetary incentives offer tangible rewards and are easier to keep track of. Their intrinsic value can be quantified very easily.
They also provide their recipients with instant gratification, leading to higher employee satisfaction in the short term.
Non-monetary incentives, when compared to monetary employee rewards programs provide engagement in the long-term, taking the company culture in a more positive direction, rather than benefiting a single individual.
The choice between monetary and nonmonetary incentives depends on various factors, including the company’s budget, its goals, and what motivates its employees.
Often, a balanced approach that includes both types of incentives is most effective, ensuring that both immediate and long-term needs are met, fostering a motivated, engaged, and satisfied workforce.
Nothing can undermine an incentive program faster than a perception of unfairness.
Make sure the rules and criteria of your employee incentive programs are clearly defined, transparent, and applied consistently.
Everyone should feel they have an equal opportunity to participate and be rewarded.
Your employee incentive program should reflect and reinforce your company’s values and culture.
This alignment ensures that the behaviors and achievements you’re rewarding contribute to the broader mission and ethos of your organization.
Recognize that your employees are diverse, with different motivations and preferences.
Offering a variety of incentives, both monetary and non-monetary, ensures that there’s something appealing for everyone.
This approach can increase the program’s overall effectiveness by catering to the individual needs of your team members.
While incentives should motivate employees to stretch and achieve more, they also need to be realistically attainable.
Setting the bar too high can lead to frustration and disengagement, while making it too easy may not sufficiently challenge your team.
Tailoring rewards and recognition to fit the individual can significantly enhance the impact of your employee incentive program.
Personal touches show that you value your employees not just for their work but as individuals.
An all-in-one performance management tool for Microsoft Teams
.svg)
.svg)
