Employee Incentives FAQ
What is a company incentive plan?
Company incentive plans are structured rewards and recognition that motivate employees to excel and take a vested interest in the growth of the business. Company incentive plans use employee rewards and recognition to help businesses attract new employee talent, reduce employee turnover costs, provide better customer service, and create a culture of top-performance.
What incentives work best for employees?
The best incentives for employees are those that make employees feel like they are valued by your organization and motivates them to perform at a high level. Cash bonuses have limited use in this application. Over time, cash becomes associated with baseline pay and is used toward bills, car payments, and other expenses that don’t typically generate positive emotional associations.
Non-cash rewards are good incentives for employees, since they are tangible reminders that your company is invested in their success. According to a combined study between the University of California Berkley, and MIT, employees will put in more effort and make more lasting changes to their behavior in order to receive non-cash rewards than they will for cash commission or verbal praise. This is because non-cash rewards have social value – you can talk about them or show them off to friends.
Examples of effective incentives for employees include:
- Online Rewards – Giving employees points that they can redeem towards online merchandise rewards is an effective way to motivate your entire employee base, giving all of your employees something they can work towards without much logistical demands from company management.
- Group Incentive Travel – Incentive travel is even more memorable and emotionally impactful than merchandise rewards. It is an effective way to reward top-performing employees and to make them more emotionally invested in your brand for the long haul.
- Gift Card & Debit Card Rewards – Although gift cards and debit card rewards are less personal than merchandise rewards or incentive travel, they are fast, flexible, convenient, and popular with employees
- Social Recognition – Social recognition is an effective way to give a boost your employee rewards program. Providing interactive leaderboards lets employees compete with each other and see who’s in the top spot, while social media-based platforms allow employees to recognize each other for going above and beyond.
How do you reward good employees?
The most effective way to reward good employees is with an employee incentive program where employees can earn online rewards, gift card rewards, debit card rewards, or incentive travel opportunities for helping your company achieve its goals. However, other rewards for good employees can include:
- Employee recognition at company-wide events.
- The option to earn remote work days.
- Catered lunches.
- Paid-for courses, certifications, and seminars.
Do incentives work for employees?
Yes; companies that achieved a 5% year-over-year increase in revenue and demonstrated strong customer- and employee-satisfaction metrics, were 44% more likely to have an employee incentive program than companies that failed to achieve those results.
How do you measure employee loyalty?
Low turnover rate and high average tenure are two important measures of employee loyalty. These factors can be predicted by employee engagement, and are two important KPIs (key performance indicators) that can be measured to show whether your employee rewards and recognition program is effective. Sending out regular self-reported surveys is another way to monitor how your employees feel toward your company, helping you to quickly address potential problems.
How do incentives encourage employees?
Incentives encourage employees by always giving them something to work toward and providing clear goals for improvement in between year-end reviews. Additionally, non-cash rewards provide tangible reminders that your company values its employees, making them more likely to achieve their goals in the future.
What is the best way to recognize employees?
The best recognition for employees is immediate, visible, and personalized. Effective forms of employee recognition include:
- Reward point certificates that employees can redeem for online rewards.
- Shout outs on social-media inspired walls that update in real-time.
- Interactive leaderboards that display which employees are making the most progress towards their goals.
- Putting together an incentive travel promotion for top-performers.
- Mentioning employees who go above and beyond at company-wide events.
How do you reward employees without money?
Non-cash rewards for employees include:
- Online rewards.
- Debit card rewards.
- Gift card rewards.
- Incentive travel.
- Catered lunches.
- Remote workdays.
- Positive mentions online and at company events.