Employee incentives are add-ons, extras, benefits that can be anything from one-time bonuses to stock options to rock-n-roll concert tickets. They’re meant to motivate employees, and keep them happy and inspired in their work. Incentive programs can also lead to higher rates of employee retention. When employees have an investment in the company (beyond the paycheck they receive for their time) they’re not only likely to produce better work, but they’re likely to stay. This, in turn, is good for business.
It’s a reward system that is designed to improve work ethic; no kid is excited to cut the grass until they’re offered $10.
The wrong incentives, however, can backfire: Offering rewards that employees don’t want or care about, or offering the wrong incentives (for example, offering a fine bottle of scotch to someone who has quit drinking), can lead to employees feeling less appreciated. Creating an imbalanced reward system that only benefits certain stations is perhaps the most dangerous pitfall. It’s easy to reward the top salesman for making the most sales, but how do you reward the copywriter whose work is equally important when there is no tangible way to gauge impact? Keeping a balanced reward system is tough in an office where there is no way to rank the “top” employees based solely on output. It can lead to low morale, discord, and resentment, in the workplace.
So how do you create an effective, and successful, incentive program? Here are a few ideas to keep your employees happy, motivated, and loyal.
1. Always involve your employees in the development of the incentive program.
Your employees should feel appreciated. Work with them to figure out what they want, instead of just throwing things at them. It is also important that your employees see the rewards as fair, and the best way to do that is let them in on the process, get feedback, and implement the program as such. Through this, you can create clear program goals so that your employees understand not only how they can earn the rewards, but also that the rewards are worth the effort. In order to work, the rewards must be something your employees want. No employee is going to work harder for something they don’t care about.
2. Always link rewards to performance, i.e. give rewards based on objective data.
The rewards can never be subjective. This should seem obvious, but favoritism, and nepotism, are very common in the workplace. There is no quicker way to breed unhappiness than to snub a hardworking employee in favor of Phil who tells the best jokes, or Becky with the good hair. Those who work hard should be rewarded for their work, period.
3. Rewards and benefits must be offered to all your employees, not just those in certain positions.
This is the only way to avoid the discord mentioned earlier. While it’s much easier just to look at sales numbers and reward accordingly, all staff members need to feel appreciated and reap the benefits of going above and beyond in their work. Make sure to also recognize both large and small achievements. Reaching sales targets, yes, but also cost saving, teamwork, stellar customer service, etc. should be recognized.
Rewarding the entire office for meeting certain goals is also one of the most effective ways to boost morale, and encourage teamwork. North Carolina-based startup Practichem is offering Tesla Model 3s to all of their employees. While you certainly don’t have to be as extravagant as that, you can be sure that no one in that office is feeling resentful. The idea behind this is that each and every one of the small company’s employees feels not only appreciated, but also more inspired on their way to the office.
4. The incentive program must be an integral part of your business strategy.
A business cannot operate without its employees. They are the true backbone. If you’re striving for success, your employees must be an integral part of your plan. If you’re a small business or a young startup, you certainly don’t have to go over the top. Don’t go broke trying to please those who work for you. But make sure you’re building into your business strategy reasons for your employees to work harder at your company than they would for any other. Make it a part of your business. By doing so you truly make your employees a part of your business as well.