- Happy employees work more.
- Incentives can improve employee morale.
- Both companywide and individual incentives encourage employees.
Most workers need a bit more than a virtual pat on the back from the boss to stay motivated. That's why many employers choose to implement incentive programs to keep their staff engaged and working hard.
What are employee incentives?
Offering rewards like gift cards, extra time off and free lunch isn't just a nice thing to do for your employees; it's great for businesses in the long run, too. A 2018 study by Genesis Associates – a U.K.-based recruiting firm for the engineering, sales and creative sectors – found that 85% of the workers surveyed felt more motivated to do their best when an incentive was offered. In addition, 73% described the office atmosphere as "good" or "very good" during an incentive period. Employee reward programs also increased a company's overall profits by upward of 80,000 British pounds (about $104,000) per week on average, the study found.
Just as an incentive may motivate you, offering your employees rewards encourages them to work hard and grow. People like to feel appreciated and recognized for doing good, and incentives are one way to show them that good work garners rewards.
What are examples of employee incentives?
So, what kinds of incentives really push employees to work their hardest? Perhaps unsurprisingly, monetary rewards earned the top spot; 40% of the survey respondents cited money as the most motivational incentive, followed by a free vacation (29%) and extra time off (23%). Other popular rewards included meals out, drinks and the option to finish your workday early. [Read Related Article: 10 Super Creative Ways to Motivate Sales Teams]
While incentives based on an employee's individual performance may offer more valuable rewards, the Genesis survey found that 71% of workers preferred team-based incentives. Patrick Bell, managing director of Genesis Associates, said this is likely because when employees work toward a goal as a team, there are more people to help maintain high levels of motivation throughout the incentive period.
Why should employers use employee incentives?
Employees like to be recognized and rewarded for their hard work. "Working on a team incentive, there is a collective responsibility; you don't want to let your other team members down," Bell told Business News Daily. "Therefore, people try harder and generally achieve better results. Getting the team sizes right is important. Too big, and people can hide from their responsibilities; too small, and you may lose out on the benefits of higher motivation."
If you're concerned about the budgetary implications of offering rewards, you don't have to offer monetary incentives, Bell said. For instance, Genesis uses other flexible benefits, such as early finishes, dress-down days, extended lunches, trophies or simply a picture on the wall or the employee's name on a hall-of-fame board.
"Different things will work better, depending on the culture of your business," Bell said. "We often task our group with coming up with ideas that don't have a financial value to them, as well as asking them what they would like to see for the bigger and more expensive incentives."
Bell also noted that, for many employees, recognition is often more important than a cash amount or prize. Some people love public recognition, while others may be embarrassed by it. As such, it's important to consider what would actually work for your staff, he said.
"We have a monthly award for best trainee/resourcer, best recruiter and team of the month," Bell said. "We don't give out money for these incentives, but we do give a trophy, which is awarded at the start of the month, voted for by all our employees. For some people, a mention in the newsletter or on social media is all the incentive they need."
Another option is to offer more responsibility, a new job title or another type of promotion to recognize workers' efforts and good work.
How to build an employee incentive program
Building an incentive program is not difficult if you approach it correctly. A great place to start is to ask your employees what sort of incentives they might like. You should also set benchmarks or standards of performance for each incentive.
Some employees may prefer monetary incentives; in these cases, it's best to either write those incentives into a budget or set up a fund for them. You also may need to create some sort of measure for tracking employee performance. Consider calling a meeting to explain the new incentive program so that employees thoroughly understand it.
Offering incentives is a fantastic way to reward good work and can transform the way your office functions.