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Employee Incentive Programs a business owner or someone in a leadership role, it’s important to promote good work ethic, morale, and innovation. Offering incentives beyond base pay is a great way to create a fun and good environment to energize your employees (and improve retention rates).
Read on to learn about employee incentives, how they differ from employee benefits, potential positive results from offering incentives, and types of incentives to consider presenting at your company.
What Are Employee Incentive Programs?
Employee incentive programs aim to attract, engage and retain talent. Incentives are rewards and perks designed to motivate positive behaviors among your staff. Employee incentive programs, also known as employee reward programs, come in many forms, such as B. Tuition reimbursement, more time off, and more flexibility in work arrangements. It would help if you chose employee incentive programs that match your employees’ desires and personal styles and your company’s values.
The Value of Employee Incentive Programs
If you want to boost employee morale and encourage engagement, you need employee incentive programs. Organizations around the world recognize the importance of incentives. The incentives industry is worth over $100 billion, including $46 billion in non-monetary incentives.
Incentive programs work because they leverage human behavior. Research from Cornell University has shown that immediate rewards increase intrinsic motivation by linking activity and a goal, so employees who are rewarded more often are more motivated to complete related tasks. Organizations that use employee incentive programs have a 79% success rate in achieving their goals when the reward is offered. It means your organization needs to go beyond simple annual recognition of years of service and incorporate employee incentive programs into your day-to-day culture.
Incentive programs can also increase employee performance by up to 44% and motivate up to 66% of employees to stay with the company. Companies that use specific sales incentives also see three times the annual increase in sales than companies that do not use incentives. And professionals who are satisfied with their work are more than twice as likely to be happy.
Employee incentive programs have huge benefits, but where do you start? Here are some examples of incentives proven to engage and motivate employees over the long term.
Benefits of Employee Incentive Programs
Incentive programs are an important part of creating a positive work environment and ensuring employee retention and satisfaction. By fostering an environment of employee recognition for their hard work and commitment to the company, employers can:
- Create an atmosphere of loyalty and engagement among staff members
- Attract new hires by showing potential candidates that the company values its employees and is invested in their success
- Show your appreciation to the employees who have gone above and beyond, and help them remain motivated to do their best
- Boost morale by recognizing employees for their hard work and achievements
- Encourage better performance in the workplace
Studies have found that employees tend to be more productive when a tangible reward is associated with the job. When workers know they will be rewarded for good work, they tend to work harder and strive to reach higher performance levels.
Some famous employee reward program examples that have been successful in retaining staff and attracting new hires include:
- Gift Cards
- Performance-Based Bonuses
- Paid Time Off
- Referral Programs
- Company Perks
- Recognition Programs
- Professional Development Opportunities
Think about what types of rewards would be most beneficial to your team and create a program that reflects their needs and interests.
Recognition and rewards
Recognition matters more than ever before: when asked how organizations could better support them in our new normal, 35% of employees said they wanted more recognition. Sixty-nine percent of employees cite recognition and rewards programs as motivation to stay at their current job. And organizations that rate their culture of recognition highly are three times more likely to see increased employee retention and over twice as likely to see increased employee engagement. Despite these data points, organizations are starting to recognize that recognition is a critical tool for incentivizing employees: one in five employers started their recognition program in the last 12 months.
Why do your recruiters spend time posting job descriptions online if you can rely on your employees to source qualified candidates? Employers often offer benefits for candidate referrals, and for a good reason: 82% of employers rated employee referrals highest in terms of ROI. Remind your workforce about this benefit several times a year to ensure you continue getting a stream of candidates in your queue. Employees will appreciate this benefit because they receive a monetary incentive for recommending qualified candidates that they feel will fit in with your culture.
You also can develop a tiered system so that candidates can get more rewards based on how far their referral goes in the interview process, which is easy to facilitate with reward points. For instance, a worker might get 1000 points (equal to $10) for submitting a referral. The reward could then rise to 2500 points (similar to $25) if their recommendation reaches the interview stage, and so on. This approach saves you the trouble of creating a separate referral program 一; instead, you can seamlessly incorporate it into your recognition and rewards program.
Did you know 40% of employees with limited professional development opportunities development will leave in five years? And millennials value it the most: 87% said that product is important in their job. Investing in your employees’ careers matters to them, and they’ll stick around for the long haul. Your company benefits, in turn, from the new knowledge and experiences that employees have to share, allowing for more in-house promotion opportunities.
There are several ways you can engage employees in professional development. You can create your own learning and development (L&D) program or use a third-party learning management system. Adobe and Salesforce have built terrific L&D programs (Learning@Adobe and Trailhead) to train team members on their tools, and they even give employees a chance to win recognition points every step of the way. As Facebook does, you can also provide a coaching program for new managers. At the end of the program, managers get one-on-one time with an executive mentor. You might even try gamifying your current L&D courses to make them more engaging.
Profit-sharing plans are defined contribution plans that can be an alternative or supplement to more traditional programs like a 401k. In a profit-sharing plan, employees receive contributions to their retirement account (cash or stock) and sometimes get direct payments. Employers can reduce these anytime, so they can rein in expenses for a year or two when necessary.
Beyond the obvious financial incentives of these programs, profit sharing empowers employees to view themselves as owners rather than just staff. It fosters company loyalty and incentivizes employees to stick around and invest their sweat equity to grow the business.
If a profit-sharing plan doesn’t suit your company, you can still use retirement benefits to incentivize employees by matching part or all of their 401k contributions. The match amount will typically be limited based on a percentage of the employee’s income.
Health and wellness
Employees cannot perform at their peak if they’re unhealthy, so wellness incentives are imperative for companies looking to prevent burnout and promote physical and mental health. It is especially critical with the pressures employees face now: 59% are taking less time off than they usually would, and 42% of those working remotely aren’t planning to take any time off to decompress. Easy examples to apply in your business include free healthy lunches, on-site health screenings, bike-to-work reimbursements, standing desks, and annual wellness fairs. You can reward employees who hit wellness milestones like quitting smoking or completing a steps challenge.
One of the best ways to inspire employee wellness is by using a centralized rewards marketplace that encourages the approval of healthy habits both at work and at home. For instance, WellRight, a leading corporate wellness platform, integrates with Achievers, a recognition and rewards solution. The integration between the platforms streamlines employee wellness, rewards, and recognition.
For employees, continuous training is a priority these days. EdAssist found that 79% of employees say tuition assistance is an important or very important factor in starting a business. And employees who participated in Cigna’s tuition support package were 10% more likely to be helped and 8% more likely to stay with the company.
Every employee, right down to the CEO, must learn something new daily. Tuition reimbursement can reinforce this best practice. Additionally, promoting continuing education can be a great way to create a culture of recognition. Take the time to congratulate your employees when they reach educational milestones, like B. to re-certify or complete their master’s degree, with team-signed digital cards and public recognition of their achievements.
Bonuses and raises
Rewarding employees with bonuses and raises can be compelling. A survey conducted by Payscale found that 65% of U.S. employees prefer bonuses based on personal performance. That said, you must lay out clear metrics and objectives, so employees know exactly how to achieve their premium. Strike a balance with your policies the requirements shouldn’t be too demanding or too easy to meet. Be careful not to pit employees against each other, either. It can backfire and lead to resentment or even alienation from your company.
You were celebrating your employees through gift-giving shows that you care. Gifts are great incentives for company-specific holidays, like work anniversaries, customer service week, global wellness day, or boss’s day. Try gamifying each of these holidays with fun contests and quizzes, and reward and recognize employees who participate the most.
Additional time off
Fifty-eight percent of workers would agree to a salary discount if they could get extra vacation time. Time off allows employees to maintain a work-life balance and can significantly increase motivation. Encourage them to take the paid leave they have one 35% of employees use all the PTO they earn 一 and offer extra vacation time and flexibility if employees meet specific goals. Additional time off can also help with rising employee burnout and disconnection.
Employees don’t necessarily need paid time off, either. Most people say they take a lower paying job if it is destined to have more flexible working arrangements.
Choice of projects
Giving high-achieving employees the right to choose their projects is a beautiful way to empower and incentivize them. Managers build trust when they permit employees to decide what to work on, which many companies struggle with. A Harvard Business Review meta-analysis found that leaders who empower their staff are likelier to be trusted by their subordinates than leaders who don’t. Prioritizing this incentive 一 and other ways to foster an environment of trust 一 is an excellent decision, as employees who feel their organization supports them are likely to keep their organization in turn by going the extra mile and transporting exceptional results time after time.