The Top Ideas to Incentivize Employees
Top performing companies use creative employee incentive ideas to retain top talent employees.
A proper employee incentive program increases business profits by an average of $104,000 a week. An outstanding employee incentive program will additionally improve employee motivation by 85%.
What are Incentives?
An employee incentiveemployee incentive is an item, event, or gesture that encourages the behavior that is being rewarded. For an employee incentive to be effective it must be based on employee need and desirability. However, it is important to reward staff in a way that does not result in entitlement.
There are four main employee incentive types-
1. Compensation incentives promote employee retention and help to onboard top talent employees through-
- Profit sharing
- Stock options
- Salary raises
- Say thank you directly
- Personally congratulate for a job well done
- Show appreciation
- Employee recognition at a company meeting
- Give employee shoutout through social medium
- Create employee wall fame plaques
- Monetary reward
- Gift card reward
- Personal gift
- Company parties
- Sporting events
- Complimentary gym membership
- Incentive travel opportunities
- Wine tasting trip
- Paid group meals
Not only will an employee incentive programbenefit employee satisfaction and employee engagement but it will also boost your company culture overall. When you actively encourage good employee performance you will inspire other team member staff members to improve.
How Do Incentives Impact Employees?
An employee incentive program is a great way to help each employee feel appreciated and increase both employee retention and employee motivation in the workplace. Many wonder how to get started on developing their employee incentive program and the best way to maintain one.
The good news is that when you take time to understand employee reward incentives then you can get started on optimizing both your company culture and bottom line. It is also important to understand the negative consequences of an employee incentive program that is negatively managed.
Your employee incentive program could backfire, creating a hostile company culture and work environment. Make sure your human resource department develops a clear and fair employee reward incentive program that is transparent but most importantly, realistic.
Do not make promises that you cannot deliver on or you will decrease trust in your leadership. Additionally, it is best to avoid rewarding incentives as a team because every team member does not perform the same and you want to focus on team building not causing conflict and resentment.
The Importance of Incentives
In a competitive global market, a proper employee incentive program can make the difference between a successful business and one that falls behind the competition. The past years have been filled with labor interest conflicts, minimum wage battles, and wage stagnation.
Case study reviews conclude that making sure every employee can feel appreciated for a job well done goes a long way for employee motivation.
Non-competitive salaries and a lack of an employee incentive program that continuously rewards employee productivity will decrease employee retention and discourage high talent applicants.
Make sure you go beyond annual raises and bonuses and get creative with how you reward employee performance. Your human resource department should get employee feedback on both employee need and wants.
Your reward incentive could better include a better benefits package, a greater work life balance, and the ability to have a work home office funded. Ultimately make sure to create and maintain a company culture and working environment that will encourage employee professional development and reward staff performance.
Great company culture and work environment is a reward in itself but should be considered a baseline when you get started developing a more comprehensive employee reward program.
For some, this means working from home while for others it is working in a mindfully decorated space alongside various team member coworkers.
Go beyond a leadership staff member who will say thank you to employees individually. Provide an environment where employees can feel appreciated and valued as a team member of your business.
Top Incentives Strategies
The most successful businesses are those who not only richly compensate their employees but also provide opportunities for additional employee recognition and rewards.
Instead of merely providing the industry standard of 4% in a profit sharing plan, consider adding deferred rewards. For example, increasing profit sharing payments based off the company's success to make sure your employees feel motivated for professional growth alongside company growth.
Profit sharing and 401k plans in general are a great way to get started on developing your employee incentive plan. These plans have clear tax benefits and are less regulated than other types of reward. Your human resource department must be clever and intentional in the ways that it rewards employees, always looking to get the most cash and value to employees directly.
Cash bonuses can be a great way to help employee motivation and employee retention long term. These can be based on reaching company milestones, like how in 2015 Hilcorp Energy Company rewarded every team member with $100,000 for doubling their production rate.
To even further optimize employee retention consider bonuses based on employee retention timelines. These are especially important to implement during mergers or crucial production periods. Consider rewarding these incentives every month or tri monthly to keep employee motivation consistent.
If a top talent employee is looking to move jobs, a great way to keep them is by offering an employee retention bonus, which 60% of companies report they do. Make sure to always offer professional development programs to keep your top talent motivated employees on your staff.
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- The Relationship Between Motivation and Staff Performance