Employee Incentive Programs Boost Morale: True or False

by: Nichole Gunn December 16, 2010

Every company’s focus is on the bottom line and deciding which strategies work to create employee satisfaction along with optimal productivity. Often, employers take advantage of employee incentive programs as a means to an end.

While comprehensive incentive strategies have gained momentum in efforts of businesses to: increase productivity, reduce healthcare costs, ensure employee retention, and garner talent, there is a camp of opponents who feel incentives, especially direct cash and gift rewards, are misplaced. This philosophy believes incentives generate an overall feeling that the company views its employees as an object to be swayed by rewards—it lacks the element of true appreciation for the employees.

According to OpenForum.com, “Companies often relate morale with compensation. The adage that more money means more happiness is pervasive in corporate culture. These programs are often thought of as "throwing a bone" to their workers so that they'll be happy and productive.”1

The article by Lynn Truong dismisses a number of incentive program benefits as myths, such as: they boost morale; they boost productivity; they show the company is generous; they foster motivation; and they generate employee loyalty to the company.

Interestingly though, a number of studies have demonstrated the bottom line benefits of incentive and wellness programs with proven return on investment. So, where does all this leave business owners? Should businesses invest in incentive programs?

Obviously, each business will have to research the advantage or disadvantage of initiating employee recognition and incentive programs. Another strategy to help in the decision making process, especially for smaller businesses, is to garner the input of the employees.