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POV: You’ve been tasked with acknowledging and rewarding employees for their contributions. Something beyond sales incentives as part of a compensation plan for sales or CS team members. What do you do? Enter employee incentive programs.
An employee incentive program is designed to motivate and reward employees for meeting goals, exhibiting desired behaviors, or contributing to organizational success. True, effective programs focus on supporting a culture of appreciation in the workplace.
Unlike the old sales incentive plans, employee incentive programs apply to all employees across the organization. Whether you’re in sales, product, customer success, or operations, you’re eligible.
What are the benefits of an employee incentive program?
In today’s economic climate, many employees are being asked to do more with less. This trend has led to an increased risk of burnout, as well as decreased motivation. When implemented effectively, employee incentives can be a solution to these challenges.
Three benefits employee incentive programs offer include:
- Enhanced Employee Engagement
- Increase in Employee Actions and Achievements
- Easier Talent Attraction and Retention
Enhanced Employee Engagement
Employee incentive programs have proven to boost engagement levels in the workplace. This is showcased in a study by Cornell University, with research proving that immediate rewards boost employee motivation. It also makes employees more likely to engage with similar tasks in the future.
Increase in Employee Actions and Achievements
Incentive programs can be a great way to encourage desired actions from employees. They are more likely to take part in programs and take action if they know they will be rewarded for meeting goals or tasks.
Easier Talent Attraction & Retention
Employee incentive programs can make a company more attractive to potential hires. Offering such a program shows a commitment to recognizing and rewarding team members. Once employees are with an organization, incentives become crucial to reducing turnover and boosting job satisfaction.
Are employee incentive programs effective?
Evidence suggests that well-designed employee incentive programs are very effective. These programs boost team member morale, productivity, and loyalty. They are aligned with organizational goals and employee needs.
Examining case studies from other organizations helps us understand the impact of a company-wide employee incentive program. As an example, during COVID-19, Elderwood used an incentive program to motivate employees. The program encouraged employees to get vaccinated.
5 employee incentive ideas
An employee incentive program may seem like a good fit for your organization. But, a common barrier is uncertainty about which incentives to offer.
Consider implementing these five types of incentives:
- Culture & Engagement Incentives
- Employee Wellbeing Incentives
- Community & ESG Incentives
- Professional Development Incentives
- Compliance & Operations Incentives
Let’s dive in further to each of the incentive types.
Culture & Engagement Incentives
Culture and engagement incentives promote positive workplace culture. For example, consider rewarding individuals who organize and host a cultural activity for the company.
Employee Wellbeing Incentives
The purpose of wellbeing incentives is to encourage employee health and wellness. For example, you could offer an incentive to encourage employees to take a walk during the day.
Community & ESG Incentives
Incentives for community service and environmental initiatives foster responsibility and pride. For example, you could give employees a reward for bringing a reusable water bottle to work.
Professional Development Incentives
Professional development incentives can be used to encourage continual learning and growth. For example, consider giving these incentives for attending a networking event.
Compliance & Operations Incentives
Consider providing rewards to employees who adhere to company policies. For example, offer incentives for completing compliance training on time.
How do you create an employee incentive program?
Wondering how to get started when it comes to creating an employee incentive program?
There are several key steps to creating an effective employee incentive program. Many organizations use software platforms for Employee Recognition & Rewards. These platforms have pre-built templates and incentive approaches. They can help streamline the process of giving incentives to employees.
You’ll want to think about:
- The amount of budget available to allocate to employee incentive claims
- You can automate employee incentive points allocations and approvals with a software platform. This will lighten the administrative burden of running an incentives program.
- Who will be the designated contact for approving employee incentive claims
- The cap on incentive claims to limit the total amount. This will help you stick to your budget.
- If you have any seasonal incentives, such as getting a flu shot in winter.
Tips for communicating the launch of your employee incentive program
Launching a new employee incentive program requires clear communication. Setting appropriate expectations with the organization is critical.
- Convey the objectives and benefits clearly in this program. Explain how employees can participate in precise terms.
- Highlight the value an incentive program brings to both individuals and the organization.
- Employees should expect regular updates and reminders about the program. These updates will include information on seasonal incentives. The purpose is to encourage ongoing participation in the program.
- Consider gathering feedback from employees about the program. Find out which incentives have the most impact on them. Also, identify any valuable incentives missing from the program.
Employee Incentives FAQs (frequently asked questions)
Are employee incentives the same as sales incentives?
Sales incentives are a type of employee incentive. Employee incentives motivate employees across the entire organization. They also encourage valuable actions that the organization deems important. Contributions to company culture, completion of training, and prioritizing mental health are a few examples, because these activities are not directly sales-related.
Many companies already have a Recognition & Rewards program in place for their employees. Incentives can be a valuable addition to an existing Rewards program.
Are employee incentives taxable?
Yes, monetary employee incentives often are considered taxable income. The specific tax implications can vary based on the type of incentive and local tax laws. It is important for both employers and employees to be aware of these tax considerations. Platforms like WorkTango offer guidance on tax implications for Rewards and Incentives. Reach out to your preferred vendor for more details.
How do you budget for employee incentives?
When budgeting for incentives, it’s essential to plan ahead. Consider the impact of the incentive on the business. Also, evaluate the financial investment needed to offer it.
Consider:
- The amount of budget you have available to allocate to employee incentive claims
- If you have a budget for a software platform that can automate the allocation and approval of incentive points. This will lighten the administrative burden of running an incentives program.
- Who will be the designated contact for approving employee incentive claims
- If there should be an incentive claims cap to limit the total amount of claims for a particular incentive. This will help you stick to your budget.
Keep an eye out
WorkTango will soon release an article called “Balancing Budgets and Motivation”. This article will provide additional strategies for budgeting incentives.
