The importance of getting employee incentive programs right
Taking care of employees is about more than simply paying salaries and covering insurance. Companies intent on attaining (and keeping) the best and brightest are increasingly turning to the employee recognition program as a method for attracting and retaining top talent.
If you’re at the beginning of the journey towards employee incentive compensation, you may be left with a lot of questions. What makes a successful employee incentive program? What benefits companies can realize by implementing them? How best to reward current employees for service and attract new talent?
In this article, we will cover:
- The basics of employee recognition programs
- The benefits of using employee incentives to drive results
- The best way to craft the right programs and incentives
- what employees really want to see in terms of benefits and perks.
Benefits of employee incentive programs
Employee incentive programs have become more popular over the last few years. While enterprise companies have led the charge in offering great perks and incentives due to the resources they may have over a small business, organizations of every size and stage can reap the benefits of rewarding their employees for their hard work and engagement.
Companies that use incentive programs as part of their overall compensation plan reap many rewards, including:
Improved Retention: Rewarding employees' efforts and talents will greatly increase the chances they stick by their employer longer. Therefore, employee recognition programs are also considered employee retention programs. The retention power of monetary incentives, gift cards, non monetary incentives, and other incentive schemes goes beyond simple job security to address how employees feel toward their employer. Employees who have a positive perception of their value in an organization are more likely to enjoy extended tenure. The intangible benefit of these retention efforts is in preserving long-time employees' high level of institutional knowledge and productivity.
Better employee productivity: Satisfied employees bring more enthusiasm to their daily activities. Through the effective use of employee incentive programs, organizations can ensure that employees remain engaged and productive long-term. High levels of employee satisfaction also reduce the stress level in the office and subsequently result in better quality work. While it's hard to quantify the impact of employee satisfaction, most managers would agree that employee morale is integral to company culture and the successful pursuit of organizational goals.
Easier recruitment: Employee incentive programs have benefits that reach beyond the walls of the office. Companies with a reputation for offering excellent monetary incentives and employee reward options tend to attract top talent from the outside. In light of the “Great Resignation,” the stakes for attracting talent are higher than ever. Salary and insurance coverage are not always sufficient to reward the best and brightest candidates. This is where organizations differentiate themselves from the rest of the job market, offering best-in-class perks and incredible employee experience to maximize their appeal to potential hires.
What makes employee incentive programs work?
Clarity and simplicity are best practices when it comes to employee rewards. In order to drive desired employee behavior give employees a straightforward path to success and deliver on an appealing incentive scheme in return.
Here are four components of a highly effective incentive program:
A clear goal: Be clear about the outcomes you care about when designing an incentive program. If sales are the name of the game, set stretch goals that are aspirational but achievable. If brand awareness is the objective, outline the best ways for employees to share that message.
Simple guidelines: Achieving the desired outcomes of a program requires a straightforward approach. Give clear parameters for employee performance and even clearer employee benefits in order to maintain a high level of effectiveness and satisfaction.
Easy redemption: Rewards that give instant gratification are always a winner and this can go far beyond a simple monetary incentive. Make sure to make it easy for your employees to track, collect, and use their rewards and gifts to keep the intrinsic motivation of these incentives.
Desirable rewards: Incentives should be inclusive and appealing to the largest possible pool of people. Just as with a customer loyalty program, curated catalogs of gift cards can be a great way to ensure every staff member can find something they love in an employee loyalty program.
5 high-value employee incentives program ideas
The best companies have a specific goal to recognize their employees for different achievements and also at important life stages. Here are some ways your company can celebrate success and reward the right behaviors throughout the year:
Recruitment and referral bonuses: As the saying goes, “A’s hire A’s.” As it turns out, they also recruit them. Incentivizing your staff to refer high-value candidates is a great way to reduce your talent acquisition costs while maintaining a high level of employee satisfaction and hiring integrity.
Spot bonuses (aka SPIFFS): Sales teams are driven to succeed and in most cases their financial incentives whether an employee bonus or team incentive options are tied to employee performance. But what about the employee whose hard work lands a big logo against all odds, or the CSM who performs an impressive win-back campaign and keeps some important revenue from walking out the door? In these cases, high-performing employees could enjoy recognition in the form of a project bonus such as a gift card or other monetary reward.
Wellness rewards: Employee burnout is at an all-time high, with employers becoming increasingly sensitive to the impacts of mental health and wellness. As a result, many organizations have implemented employee wellness incentives for their staff. These may be structured as an across-the-board employee benefit (such as reimbursement for gym or yoga memberships) or as cash rewards for participants in healthy living activities.
Incentive travel: With the world slowly returning from pre-COVID travel restrictions, the time has never been better to celebrate your best and brightest employees with a travel-focused rewards program. Incentive travel has become increasingly popular in recent years, for everything from recognizing service milestones to commending career achievements. Incentive travel benefits can be flexible and easy to administer through the use of travel gift cards and vouchers. This also offers recipients freedom of choice when exercising their rewards.
Personalized gifts and experiences: Personalization is the gold standard for incentives that delight and surprise. Using what you know about individual employees (such as dates of service, interests, life experiences, geographic location, etc.) from the data in your employee database, you can create personalized experiences that make each recipient feel valued and seen on a personal level.
Alternatively, you can curate a list of potential experiences, monetary rewards, or gift card rewards for your employees to choose from, allowing them to determine the type of experience they’d like to have. Both options make it known that the company values each employee for their individuality and personal contributions.
How to start an employee incentive program
Building an effective employee incentive program doesn’t have to be a heavy lift. In general, you want to create a flexible framework for recognizing and rewarding employees for desired behaviors and administer it in such a way as to maintain high ROI and reduce manual labor.
Here are a few questions to help you craft the best employee recognition program for your organization:
- How many employees will this program impact?
- Is the chosen program scalable?
- What is the goal of the program?
- What reward structure will we use?
- What behaviors are we trying to incentivize with our program?
- What are the budgetary constraints for the program (for setup or ongoing administration?)
- Where are my employees located, and will rewards options be impactful there?
- How much time do human resources or operational staff have for program implementation?
- What type of human resource management tools will we use to administer the program?
- How will we measure the success of the employee reward programs we offer?
- Are the goals and objectives we’re highlighting achievable and aspirational?
Measure the impact of your employee incentive program
In order to truly understand the effectiveness of your incentive plan, you need to measure it. Examining several key metrics (which adjust for other variables) can give you a clear picture of program performance. Here are a few places to look for indications regarding your employee incentive and loyalty programs.
Employee satisfaction survey: One of the best ways to know how your employees feel about the perks and incentives you offer? Ask them! Conducting an employee survey is a great way to understand what your employees want for rewards and what their expectations are for programs. You can also rate the success of past programs.
Incentive adoption numbers: Great programs have high employee engagement rates. Review the number of employees actively participating in your incentive programs versus the number of eligible employees. High employee engagement rates mean your incentive program is likely hitting the mark for your staff.
Retention and employee motivation: Understand how your overall retention programs are tied to the incentives you provide. If lagging retention numbers arent explained through other indicators (such as competitive salary, insurance, health benefits, or expected turnovers) your incentive programs may need a boost.
Sales and marketing KPIs: Many companies use incentive programs to drive sales and marketing success. Are your sales teams making their numbers consistently? If sales and revenue are on target and turnover within the department is low, it’s likely your incentive programs are considered a value-add for your employees.
Why gift cards are great for employee incentive programs
Gift cards are as good for your employees as they are for your program administrators. Gift cards are an easy way to recognize the efforts of your most important contributors while being flexible and low-impact on the back end.
Some of the best features of gift cards that make them a great way to incentivize employees include:
Easy delivery: Gift cards can go out to your recipient by the thousands with the touch of a button. a gift card platform makes this process even easier, giving you the ability to launch a fully customized employee incentive to as many employees as you need with minimal time investment to get them out the door.
Customizable features: Gift cards are highly flexible in terms of program construction. The best platform makes it easy to send exactly what you want, with a full list of features to customize the experience for your recipients. It also allows you to define the parameters of your programs for easy automation which saves even more time and effort.
Great return on investment: Gift cards offer some of the highest Roi of any employee gift. Because they are easy to deliver and require no storage or shipping, virtually every dollar spent on sending gift cards goes directly to the recipient - and therefore directly impacts the success of your program.
Flexible gift options: Gift card options have never been more plentiful, offering anyone from across the globe the opportunity to get a gift just for them from retailers right in their neighborhoods. A gift card platform also offers the flexibility to let your recipients choose what retailer cards they would like to receive. Offering a gift card credit for your program reduces the need to curate options, and lets your recipients spread rewards around between their favorite merchants.
Low barriers to entry: Gift card programs are easy to launch when you work with the right provider. The best platforms let users get started with just an email list and a credit card, allowing anyone within your organization to design and launch employee incentives without needing to know code, commit to large-scale implementations, or go through a multi-layered approval process. They can use the budget they have at their disposal to offer incentives to their employees instantly.
Actionable data: Sending employee incentives through a gift card platform allows you to take advantage of all the data created when recipients open, select, and redeem their rewards. This reporting can help improve future programs or refine the incentives you offer to employees.
Desirable rewards: Everyone loves receiving a gift card, whether from a friend or from their employer. Using gift cards as part of your employee incentives results in high satisfaction and increased engagement from your recipients.
Highly scalable: Gift card platforms are designed to grow with your organization and its program offerings. Gift cards have the same impact and ease of use whether you are sending them to a few employees or delivering employee incentives across thousands of users in your Enterprise company. No matter the size of your program, the benefits to employer and employee can efficiently scale.
Why choose Runa to administer your employee incentive program
With a fully-featured platform and first-in-class support, it’s easy to choose Runa to launch your next gift campaign. Our clients often note these stand-out features when describing their experience using the platform:
Flexible options: Building creative and innovative programs for employees is one of the best ways to drive results. Runa gives your team full flexibility to create programs to drive desired behavior and ensure optimal outcomes. This flexibility goes beyond employee incentives, allowing your stakeholders from every department to create programs to drive growth. Marketing, sales, HR, talent management, and department heads can all quickly and easily design programs to meet their individual incentive needs.
Integration potential: While a great platform can stand on its own to deliver value, that same platform becomes even more valuable when it successfully integrates into your other important financial systems. Runa can integrate with many of the top financial, accounting, marketing, sales, and enterprise resource planning (ERP) platforms to deliver results, communicate data seamlessly, and create visibility across all levels of the organization.
Full-service support: While an easy-to-use system makes everyday operations easier, sometimes you have questions or need integration support for special use cases. In these instances, the Runa CSM and development teams are there to support you, with quick response times and knowledgeable support that makes administering your gifting programs even easier.
Enhanced cost savings: The Runa platform was built with the intention of creating easy user experiences that save time and money. Some of the cost-saving features of the Runa experience include:
- A platform with basic fee-free functionality alongside its fully-featured service tiers.
- Direct savings from many gift card partners, allowing you to take advantage of volume pricing at a discount.
- Easy to use UI and workflow options that reduce time investment in building and launching programs, saving work hours for staff.
- Digital delivery of gifts across a host of channels without the need for shipping, processing fees, packaging, or other costs that reduce ROI.
- Balance recapture that allows you to recover unused portions of gift cards, maximizing your budget efficiency and allowing you to reinvest in future programs.
Robust reporting: The Runa platform makes it simple to use, parse, and visualize data from every send. This flexible reporting platform gives users granular access to data that helps them make informed decisions, improve the functionality of their programs, and enhance the outcomes of their employee incentive programs. The ability to see and understand all relevant data also helps users craft future programs, more effectively budget for new campaigns, and understand how investment can drive the outcomes they’re looking for.
If you want to make a measurable impact through your employee incentive programs, Runa can help with a scalable solution and easy-to-use platform that harnesses the power of data to drive success. Check out a demo today.