The Do’s And Don’ts Of Employee Incentive And Reward Programs

do's and don'ts employee incentive rewards program

Employees are the frontliners of any business or organization. Workers are expected to perform their duties and responsibilities in accordance with the contract they’ve signed up for when they were hired. While they can finish tasks on time, employers want to boost the morale of their employees by giving incentives or rewards. 

By doing this, employers can motivate their employees to be more productive and go beyond what they’re expected to do. They can also attain success in their professional career and for the company overall. However, there are things employers need to consider when giving employees incentives and rewards to avoid misuse and abuse. The wrong incentive program could actually reduce employee productivity and increase resentment, so there are guidelines for implementing one.

In this article, you’ll learn the do’s and don’ts of employee incentive and reward programs, giving you references in planning your next motivational scheme. It could save your company a lot of headaches and heartburn, so read on!

employee incentives reward program increase motivation talent retention

Do’s Of Employee Incentive And Rewards Programs 

Here are the do’s of employee incentive and rewards programs when trying to elicit increased productivity: 

• Think Of The Effects 

Employers should think of both the short-term and long-term effects of a prospective employee incentive and rewards program. For instance, chartering a corporate ship for your company is a great way to hold an unforgettable company retreat. This example is something not all companies can provide to their employees. But it can help boost your team’s morale, which gears long-term effects, making your employees feel valued, rewarded, and loyal to your company. 

• Set Clear Program Guidelines 

There should be a clear set of rules or guidelines for how employees will qualify for getting the incentive or reward. Do they need to reach or exceed the previous quarter’s sales? What are the metrics they need to meet? How should they utilize their knowledge and skills to go far and beyond so they can meet your expectations? 

• Set Time Limit 

Giving huge incentives all year round may not be feasible for your budget. Hence, setting a time limit for a big-time incentive is appropriate. This should be clear from the start to eliminate expectations and frustrations. 

• Set Fixed Performance-Based Rewards 

One example of a fixed performance-based scheme is a commission for sales productivity. You can offer a certain percentage of the sales to go to your employees’ pay for every sale they make. With this reward scheme, both you and your employees win. 

• Provide Monetary And Non-Monetary Incentives 

A monetary incentive for employees is cash based whereas non-monetary incentives can be movie tickets, gift certificates, company merchandise, customized office items, or other special treats. A good balance of these two forms of rewards gains the best results in attaining your goals, such as improved productivity and revenue. 

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Don’ts Of Employee Incentive And Rewards Programs 

Here are the don’ts of employee incentive and rewards programs: 

• Always Giving Out Money As Incentive 

While cash is a great motivator, you also want to give your employees more important things than money. For instance, you want to show them the value of taking care of one’s health by providing free check-ups or health products. 

Show your employees the value of family time by offering movie tickets for all family members or a grand vacation getaway. Such programs will leave a good mark on your employees’ hearts and minds. Hence, strengthening loyalty and employer-employee relationship. 

• Rewarding The Same People 

Each employee has a talent or skill. However, not all employees are competitive. So, you might see the same names of people who are always getting the reward based on the metrics or parameters you have set. When this happens, your other employees remain stagnant and feeling unrecognized. 

You can change your scheme to also reward other employees by creating mini teams and setting your best employees as leaders. In this way, even non-performing employees will be more motivated to step up and cooperate because they have a team to protect. Hence, they become more competitive and have a higher chance of winning, too. 

• Giving The Same Incentive Or Reward 

While incentives and rewards are very enticing and fun, they may lose their real value with time. Employees may feel bored because they already know what to expect. That’s why you need to create different types of incentives to keep the spark in your employee incentive programs. Some workers are motivated by one type of incentive, while another employee may respond to other rewards.

• Setting Too High Or Too Difficult Metrics 

If the metrics or requirements are too difficult to achieve, you also lose the interest of your employees in your program, rendering it ineffective. Unattainable numbers will make your employee incentives program a cruel joke instead of a motivating force. An example of this could be unrealistically high sales quota numbers that are unreachable for all employees, or all but one star sales agent.

worker incentives motivating employees

Company Culture Conclusion 

Employees deserve to be rewarded for the great job they’ve done for the company. Therefore, employers should provide incentives and rewards to qualified employees and ensure that the program will drive good competition and bear good outcomes for the business. 

Keep all the above tips in mind so you can be guided accordingly when planning your next employee incentive and rewards program. It will be a beneficial management strategy for company leaders and workers alike if implemented correctly. 

Incentivizing workers might just be the difference maker your company needs to improve employee productivity and boosting top talent retention. And everyone should know that motivated workers and less talent turnover directly equates to a more profitable business bottom line.

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