Employee incentive programmes are initiatives designed to attract, engage and retain valuable staff. Not only can companies use these programmes to motivate and reward positive behaviour, it can also serve to boost morale and promote the company culture. Thus, establishing the vital building blocks of a winning team and business.
And it works: research shows, ‘immediate rewards increase intrinsic motivation by linking an activity and a goal; employees rewarded more frequently are more motivated to complete associated tasks.’
It goes on to note that, ‘incentive programmes can increase employee performance by as much as 44% and can motivate up to 66% of employees to remain with their company.’
The research further reveals, ‘companies that use tangible sales incentives also see annual revenue increases that are three times higher than companies that don’t utilise incentive programmes.’
Worldwide, the worth of such programmes is recognised by companies, with the incentive industry valued at over $100 billion, underscoring the value proposition of this approach.
As can be expected from a billion-dollar industry, there are a multitude of incentive programmes from which to select. It’s therefore important that companies take the time to choose one that best aligns with their business culture and is enticing to the majority of their workforce.
The Incentive Company supports a considered approach to the selection of an incentive programme, stating: “Incentive or reward programmes come in different shapes and sizes and will vary from one company to the next depending on objectives, intent and budget. It doesn’t matter whether your business is small or large – if the programme is simple and easy to understand if the goals are clear and achievable, and if the rewards are valued – your programme will succeed.”
Incentives are broadly classified into two classes – monetary and non-monetary. Below are some practical incentives available that have proven results.
Monetary Employee Incentives
Simply put, monetary incentives provide financial rewards to employees. These incentives play a vital role in frontline worker retention, especially as these workers are, more often than not, from low to middle-income families.
Rewarding Performance – Top Achievers
These can include salary increases, sign-on bonuses, referral bonuses, year-end bonuses, profit sharing and stock options, all of which are linked to a performance metric. To avoid any disappointment or misunderstandings related to the performance requirements for these incentives, clear guidelines regarding how employees qualify for these are very important.
Financial Aid – Creating Opportunity
Financial support of staff can take several forms, including bursaries, loans, meal vouchers for a cafeteria, or additional support such as a dearness allowance.
Whilst these can be very attractive, especially to frontline workers in developing countries, it must be noted that the effectiveness of such financial incentives differs between employee levels and generations.
Airtime, Gift Cards and/or Vouchers – Quick Recognition
These incentives offer a simple yet effective way to reward employees on a large scale. Especially as it is very easy and convenient to distribute electronic gift cards or airtime to a large and dispersed workforce.
Many employees prefer gift cards to cash as it is more memorable and allows for guilt-free spending on items they would not have bought otherwise.
Non-monetary Employee Incentives
Non-monetary incentives are non-cash rewards, and can include branded or custom uniforms, time off for volunteer work, and one-on-one meetings to ascertain work goals and how the company can help them grow.
Non-monetary incentives have been on the rise over the past few years, with more employers and employees preferring this form of incentive. This increasing preference is attributed to the fact that non-monetary incentives are more memorable, are easier to separate from pay (it’s not just more cash deposited into a worker’s bank account), have more emotional value and are easier to talk about with others.
Below are a few effective non-monetary incentives to consider:
Time Off – Take a Break
Additional time off can take the form of multiple paid leave days (this can be for individual employees or the whole organisation, e.g., when closing the company for a short break at the end of the year), working a half-day on the last Friday of each month or getting a longer lunch break. Bonus birthday leave or extra time off to care for a loved one can also signal to employees that companies care.
In addition, ‘the benefit of offering time off as a bonus or reward is that it’s essentially free for the company to do this’.
Childcare – the Extended Family
Working parents make up a significant portion of the global workforce and spend most of their time at work. Providing on-site childcare at the workplace or close by, for example at the company housing facility, is one of the most attractive benefits a company can offer.
This is of special significance for single parents. Not only will this alleviate the cash burden on employees (who might be looking for a higher-paying job to afford childcare) but a parent who knows their child is safe and happy will be better able to focus at work.
As the Harvard Business Review notes: ‘Childcare is not a family issue; it is a business issue. It affects how we work, when we work and for many, why we work. Moving forward, employer-provided child care could also influence where we work. Employers that provide high-quality childcare will not only differentiate themselves from the competition, but will also create a “sticky” benefit.’
If on-site childcare is not an option, other considerations, such as extra time off over school holidays to spend with their children, can also be enticing incentives for working parents.
Housing – Home Away from Home
Dr Patrick Kairu, a Rwandan general practitioner notes: ‘Governments may not be able to pay much, but they should at least provide housing with running water and electricity — these utilities are expensive and sometimes hard to come by in remote areas’.
While he is specifically referencing the housing conditions of frontline health workers operating in remote parts of the African continent, the same can also be said of frontline workers in other industries, such as mining, who are often away from their family homes and housed by the company.
Providing workers with decent housing, meals and other facilities can go a long way to ensuring workers stay motivated and feel appreciated as they oftentimes value good housing more than an increase in salary or wages.
Public Recognition – Rising Stars
Recognising and celebrating employee achievements publicly is a major factor in keeping staff happy and retained. This can take the form of large, perhaps annual award ceremonies, as well as small shout-outs on a weekly or monthly basis as part of a dynamic and continuous effort to engage with staff.
Moreover, it has been proven that employee recognition can deliver return on investment – in the form of 50% higher productivity and an estimated 20% increase in critical business outcomes.
Events – Social Bonding
Company events can be any form of activity including sport days, after-work dinner and drinks or tickets to a sporting event. It can also include larger events, such as a company picnic, to which employees can invite their families. Regardless of the activity, there are numerous benefits associated with getting employees to spend quality social time together.
Training – Skills Boost
Employees can also be rewarded with training – either in their field or another to upskill them. Experiencing time in a more senior role may also prove beneficial for employees who have leadership aspirations. Rewarding employees in this way, signals company confidence in them, as well as a path for career progression.
The latter is, of course, of vital importance to ensure employee motivation and retention. International HR research company Randstad‘s latest research shows that, ‘career progression opportunities are an important factor for nearly half (49%) of people when choosing an employer’.
Thus, investing in employees really becomes investing in the business itself.
Across the globe the “Great Resignation” prompted by the emergence of the global pandemic is being accompanied by what human resources practitioners are calling the “Great Reflection”. A Gartner report defines this as: ‘Employees having developed a new sense of awareness and worth for themselves and the world around them.’
The report highlights that working with “reflective employees” is a longer-term systemic reality companies need face and that future incentive schemes will need to be more human-centric; offering a blend of material and emotional rewards.
As a leader in the digital employee experience, Wyzetalk can help you to better connect with your workforce to increase engagement levels and business performance with our customised employee engagement solutions. Talk to an expert today to find out more.