Workplace Incentives That Your Employees Want

• Employee incentive programs can boost company morale and motivate employees to produce their best work.
• Employee incentive programs go above and beyond company-wide benefits to reward individual or team achievement.
• Incentive programs should be well planned to ensure they’re meaningful and equitable while including various tangible offerings.
• This article is for business owners and managers who are considering workplace incentive programs to increase loyalty and productivity.

Hiring talented workers is the first step in building a team that collaborates and fuels company growth. However, amid workplace stress, economic challenges and diminished employee engagement, many entrepreneurs and small business owners are seeking ways to keep employees happy and engaged.

Workplace incentive programs may be an answer. Incentive programs aren’t new, but they’re becoming more crucial in a competitive labor market. We’ll explore employee incentive programs and explain how they can increase an organization’s cohesiveness, morale and productivity. 

What are employee incentive programs?

Employee incentive programs designate and offer specific performance rewards for preset benchmarks, with the goal of motivating workers. Cash bonuses, including holiday bonuses, are the most recognizable and traditional employee incentives. However, money isn’t enough to motivate employees, and in a challenging economy, pay raises and cash disbursals may not be in the cards. Incentive programs with customized, creative rewards that your employees want can fill the gap.

Organizations can implement incentive programs for any type of valuable service, including the following:

• Individual benchmarks
• Team-based projects
• Project goal achievement
• Excellent work over time

What workplace incentives do employees want?

The best way to discover the workplace incentives your employees want is to ask them. Consider conducting employee surveys asking about preferred rewards and the incentives that will motivate employees the most. Workplace incentives vary widely among company cultures, and motivators will differ according to individual perspectives.

Implementing a workplace incentive program is about recognizing employees, not holding a contest. Frame your survey to discover the incentives that will help employees feel more valued. To get an idea of the incentives your employees may want, consider the top six incentive offers the Incentive Research Foundation found in a 2022 survey:

1. Cash
2. Gift cards 
3. Gifts
4. Points toward a larger reward
5. Individual travel
6. Non-travel experiences

When you offer and award incentives, consider the following tips:

• Offer employees incentive choices. To make incentives work as intended, make sure they are open-ended enough that employees can make their own choices. For example, they could choose from desirable incentives, like restaurant gift certificates, concerts and weekend travel opportunities.
• Let employees personalize their rewards. There’s not much incentive in a concert you don’t want to go to, a restaurant that’s too far away, or preselected travel that doesn’t align with someone’s availability, interest or budget. Consider letting your employees choose a restaurant, concert or experience that fits with their interests.
• Be wary of gifts as incentives. Although employees cited gifts as a desired incentive, it’s challenging to select a gift that would motivate a variety of team members. Not everyone wants electronics, and clothing is a gift that requires personal input. Consider including questions in your employee survey about specific gifts or gift cards, or choose gift cards everyone can appreciate, such as Visa gift cards.

How do you plan an employee incentive program?

Employers must carefully outline workplace incentive programs so they’re not just randomly handing out prizes to some workers. When planning an incentive program, employers should consider the following best practices: 

• Determine what you’re rewarding with an incentive program. Before implementing an incentive program, employers must nail down the specifics of the behavior or achievements they’ll reward. They’ll need to outline when and how often they’ll hand out incentives to employees or departments.
• Choose the specific incentives you’ll offer. Outline the specific elements of your incentive program. You’ll need to go above and beyond already-established organization-wide benefits such as health insurance, free parking, paid leave policies and traditional bonuses. Incentives also must go beyond creative company-wide perks, like gym memberships and wellness programs. Incentives aren’t the perks and benefits you evenly distribute to all employees; they’re designed to reward specific accomplishments.
• Clearly explain the incentive program to employees. To make the program work as intended, inform employees about the incentive program and how they can earn the perks you’re offering. While not everyone will receive a reward, everyone should have the opportunity to earn one.

Adding a tangible incentives program might sound costly. However, in the long run, employee incentives can help keep company expenses down by promoting employee retention.

What are the benefits of employee incentive programs?

Employee incentive programs bring workers and organizations numerous interrelated benefits, including a happier workplace, more engaged and loyal employees, and increased employee retention.

• Employee incentive programs increase productivity. Employee incentive programs increase productivity by motivating workers with performance-based rewards.
• Employee incentive programs make employees feel valued. Recognition for a job well done is a significant performance and engagement motivator. Employees who feel valued are encouraged to keep up a high level of performance. If incentives are offered in the spirit of recognizing a job well done, they go a long way toward improving a worker’s sense of fulfillment and loyalty.
• Incentive programs can foster teamwork. When incentives are offered to a team, team members’ sense of cohesion increases, and so does their productivity. And, of course, any recognition in the workplace is bound to raise morale.
• Employee incentive programs boost employee happiness. Employee incentive programs increase employee happiness, and happy employees are more creative and productive. They’re also less likely to quit.
• Employee incentive programs increase employee retention. Attracting and retaining top talent in today’s labor market requires creativity. Employees are more willing than ever to jump ship to positions with better pay, benefits and company culture. The Pew Research Center estimates that 1 in 5 employees will likely look for a new job in the next six months. Employee incentive programs can provide the spark and motivation to keep employees around.
• Employee incentive programs save businesses money. Satisfied, engaged employees are less likely to quit. That increased retention helps businesses reduce the costs of hiring new employees, which can be exorbitant ​​— even more so when you factor in new-hire training and the productivity losses that result when experienced team members leave. The Society for Human Resource Management says each new hire can cost a business nearly $5,000.

Incentives work best in an already-positive work culture

Incentive programs are a productive way to boost workers’ morale and keep them aboard. But no number of gift cards or concerts will help if a company’s environment is toxic, if employees don’t find meaning in their work, or if basic benefits aren’t part of an employment package.

A positive company culture includes built-in benefits and perks available to all, including professional development opportunities, mentorship programs, excellent guidance, and a flexible workplace that includes remote work options and healthy work-hour boundaries. A successful incentive program can build on this already-positive environment to increase engagement even further.

Recognition in the form of appreciation, praise and incentives can go a long way toward cultivating a healthy workplace environment with engaged employees. In the current business environment — where so much is unknown and in flux — offering tangible incentives to employees can improve a business’s culture, retention rate and bottom line.