What is the value of an incentive for employees?
Motivating employees and engaging your workforce is one of the most critical soft goals for your organization. In light of the recent economic and workforce changes over the last several years, creating a full spectrum of compensation and benefits is vital to attracting and retaining talent in an increasingly competitive talent pool.
Salary and 100% health and dental are now widely considered the minimum incentives needing to be provided for organizations intent on attracting the best and the brightest. However, to drive performance in your recruitment and employee retention metrics, you need to bring more to the table.
This is where an employee incentive program shines. They deliver an experience beyond the transactional nature of salary bumps. They demonstrate to employees that the organization values their contributions and understands they can choose where and how they work.
When structured well, incentive pay can drive the soft performance metrics that genuinely allow an organization to flourish in the new world of work. They demonstrate commitments to individuals and a desire to enrich and promote connection. For younger generations entering the workforce, this component of employer selection is increasingly non-negotiable.
Today we will share more about the importance of building effective employee incentive programs, provide ideas on programs to build connection and engagement, and share the best tools and methods for implementing and fulfilling incentives.
What are employee incentive programs?
What are employee incentive programs? In short, initiatives that work to expand employee satisfaction using tools beyond the standard salary and benefits offering. Employee incentive programs are a strategy for encouraging engagement and positive action from employees working in your organization. Incentive programs drive various behaviors that improve company performance, increase collaboration and morale, and lead to better business outcomes.
The structure of a program for employee incentives depends upon the outcomes a business is trying to achieve. Some may be geared toward encouraging specific performance, such as reaching sales numbers. In contrast, others may be connected to soft business goals, such as rewarding specific achievements or recognizing service milestones. Sometimes, they take the form of retention bonuses using cash incentives to entice employees to continue on with the organization.
Companies that use employee incentive programs may design several initiatives to support different company objectives. These programs are used by human resources, recruitment, sales, and marketing teams to drive success within their departments.
Importance of having an employee incentive program
Employee incentive programs offer a range of benefits both for the company and the teams and individual participants in programs. Human resource teams often employ them to drive soft metrics like employee engagement, employee performance, and employee appreciation goals that
Some of the most important results of incentive programs include:
Better financial results: Companies that incentivize performance through monetary and non-monetary incentives overall see higher financial performance, especially when these programs are tied to specific and actionable goals. While a general cash incentive for company performance may also have an impact, creating individual performance through clear communication of expectations and associated rewards drives more success overall. When employee productivity goes up, revenues follow.
Increased engagement: When staff members feel their contributions to the company are recognized tangibly and intangibly, the result is better engagement and higher productivity for business goals and initiatives. Having a clear correlation between a specific action and company success makes it easier for individual contributors to see how their daily actions impact the overall strength of the organization.
Improved morale: Employee morale is hard to quantify but important to prioritize. Rewarding employees using an incentive programme for recognition and reward can greatly impact the general success of the organization. This is especially true during periods of economic downturn or social disruption. Feeling your company has your back during the tough times can bring everyone together and keep sentiments positive.
Reduced churn: When people feel valued and appreciated in their jobs, they are less likely to seek opportunities elsewhere. By instituting a robust employee incentive offering, you are communicating that value to employees and ensuring that their time of service with a company is seen as necessary.
Expanded brand reputation: No company initiative operates in a vacuum. Monetary and non-monetary incentive programs often get attention outside of their direct recipients. This can improve recruitment and increase brand reputation of the organization overall.
10 employee incentive program ideas
Individual performance incentives
One of the most common and popular forms of employee incentive is structured rewards for individual performance. These may be based on sales numbers, marketing figures, or other key performance indicators (KPIs) that the company feels are important to business strategy or revenue generation. Individual performance incentives are often structured as part of an employee's total compensation and benefits package, as is often the case with commission-based sales teams. Although this is the most common application for individual performance incentives that drive employee motivation, any desirable behavior is receptive to monetary rewards.
Welcome gifts for new employees
A positive employee relationship begins the moment your new arrival settles into their desk or logs into Slack. Welcoming new employees with a welcome gift, sign-on bonus, or work-from-home stipend ensures that they feel they’ve landed in the right place on day one. Welcome gifts do not need to be extravagant to be well received. They need only reflect the value an organization believes that individual brings.
Thank-you gifts for successful referrals
Most companies prefer to receive candidate referrals from internal stakeholders. This preference happens for two reasons: employees are often seen as the best ambassadors for the company. They offer an inside perspective on life as an employee and social proof of the employment opportunity. Secondly, employees often refer strong and diverse candidates to benefit the organization. These internal candidates require less vetting and arrive at the job with some element of rapport already built into the experience. Thank you gifts should reflect how the organization values referral from an internal source.
Travel incentives for merit or performance bonuses
Merit-based bonuses and years of service recognition or powerful incentives can greatly improve retention metrics. Many companies choose to recognize milestone years of service - five, 10, 15, or 20 years, with the gift of incentive travel. This may be a standard company trip to a specific location. It can also be administered as a voucher or gift card, allowing the recipient to craft their own experience.
Another everyday use of travel incentives is to reward high performance in sales or marketing. Many companies use incentive travel to drive results beyond quotas or performance minimums. While travel incentives are a more significant investment for the organization, they often Drive results that are many multiples in terms of revenue.
Milestone celebrations for life events
Not all incentive programs are tied to specific performance. One of the best ways to recognize and celebrate your employees: do so when they experience personal or professional milestones. New family members, advanced degrees, and first home purchases are great opportunities to connect and engage with an employee in a real and personal way.
Wellness program and benefits options
Wellness-based incentive programs are becoming more popular, especially in the wake of the COVID-19 pandemic. Gym memberships, equipment stipends, experience gifts, and subscriptions to streaming health and wellness services are all popular options that improve employee wellness. These types of programs also lower stress and improve health which offers some ancillary benefits to the organization in return for taking care of its most important asset: people.
Team performance rewards
Individual recognition is an important part of incentive programs. Team recognition is also vital to the health and performance of your organization. Teams often work on long-term projects that require collaboration and, at times, personal sacrifice (late nights and weekends pushing toward a goal). Recognizing the contributions of a team by rewarding its team members is an excellent way to build employee morale and recognize the special effort that comes with working in a group toward a common objective.
Spontaneous bonus awards
Sometimes the most beneficial recognition is spontaneous. Many companies offer their department heads and management the ability to individually recognize contributions were achievements from individual contributors in an informal way. Building spontaneous rewards such as spot bonuses and spiffs into a budget gives management freedom and flexibility in driving desired outcomes.
End-of-year recognition gifts
At the close of a successful year, it’s important to recognize the contributions each employee makes to the health and success of the company. In these cases, an end-of-the-year bonus or cash reward is an excellent way to bring everyone together and reward a year of hard work. These company rewards have the same impact as an individual or team-based incentive. They ensure that every employee gets to experience recognition at some point throughout the year. These incentives are excellent culture-building tools that offer many qualitative benefits.
Employee enrichment programs
Caring about employees is not just about providing salary and insurance. Many companies choose to support ongoing education and enrichment for employees as a way to develop their various skill sets. Offering incentive programs for online learning and education programs Is an excellent way to create a personalized experience for each employee, allowing them the freedom to explore new concepts or develop new skills that will benefit everyone.
What makes employee incentive programs work?
Many factors influence the effectiveness of your employee incentive programs. Here are five areas to strive for when building your next initiative:
Clarity: For participants to successfully engage with a program, the desired outcome and actions must be laid out. The path to success must be linear and achievable. When crafting an incentive program, take extra care to consider what objective you’re trying to reach, how to incentivize the desired behavior best, and what rewards will align successfully with achieving those results.
Accessibility: Incentive reward programs work best when participants have instant access to the rewards upon confession of the program. Providing easily accessible rewards is especially important in the new culture of hybrid and fully remote work. Programs and associated rewards should have easy accessibility for every organization member.
Variety: Your rewards options should be as varied as your workforce. Offering inclusive rewards that appeal to employees at every demographic and life stage ensures that each recipient will be delighted with the incentive rewards. Variety is also a benefit in creating personalization within your programs.
Consistency: Rewards should be consistent with the outcomes you try to achieve. If you are creating an engagement Touchpoint through a welcome gift or a referral, a small token of thanks may be appropriate. For larger incentives such as top-tier performance rewards or years of service recognition, a more generous incentive will convey the proper appreciation and level of value for their service offering.
Communication: Incentive programs only work if people know about them. Good communication of your programs and the parameters for success is vital to engagement and results. Be sure you communicate new programs across all available channels and regularly update employees on changes to existing programs that will renew interest in participation.
Why you should prioritize gift cards for employee incentive programs
While any type of gift or incentive reward is appreciated, many employees prefer to receive a gift card over other forms of monetary compensation. Gift cards are easy to use and are excepted almost everywhere, especially a visa prepaid card. Organizations like using gift cards because it provides an easy way to give corporate gifts and create better experiences at scale.
Here are some of the top reasons that corporations of all sizes choose to incorporate gift cards into their incentive programs:
Desirable: As we mentioned above, people love receiving gifts. They especially like receiving flexible gifts that are easy to use. Gift cards are often cited as the top form of desirable compensation for employee recognition. Gift cards represent definitive value for the recipient and convey positive feelings between employer and employee.
Effective: Organizations prefer to use gift cards because they are a highly effective form of compensation, partly owing to their desirability. Giving a gift card is straightforward and communicates the value a recipient brings to the workplace. Digital gift cards have the added benefit of global reach. Gift cards are excepted on every continent and for every purpose. This makes them a preferred choice for administering rewards.
Easy to implement: for businesses at the beginning of their corporate gifting journey, gift cards offer a low barrier to entry. It’s easy to buy gift cards in bulk and even easier to deliver them to recipients. Unlike physical gifts that must be shipped and tracked, you can outline and implement an employee incentives program with just a small budget and a few hours of your time. It does not require multiple stakeholders to commit time and effort to incentive programs.
Scalable: Whether a small business or an enterprise company, gift cards offer an easy and scalable solution to the challenges of gifting at scale. Because digital gift cards and gift card platforms offer automation and dynamic workflows, you can design an employee incentive program for any number of recipients, from a handful of high achievers in the sales department to an end-of-the-year reward for thousands of employees. You can implement both programs with the same time investment and ease of use.
Global: Gift cards offer global reach. This is an important feature for decentralized and distributed teams. International gift card delivery also solves many problems of dealing with international currency and shipping. Program administrators don’t need to worry about currency conversion for customs issues. Gift cards are digital and local, taking much of the stress out of delivering a great experience to employees worldwide.
Data-driven: Incentive programs that use digital gift cards benefit from centralizing a wealth of program data for use in future initiatives. With the white gift card platform, users can see real-time data on the adoption rates and retailer preferences of participants in their programs. This data can make it easier to curate incentive rewards and establish accurate budgets for deploying future programs.
Flexible: Gift cards make an excellent option for delivering a variety of programs to your recipients. They are highly flexible and easy to personalize. Because they are digital, they also offer various options for delivering the experience to recipients. You can deliver gift cards via traditional means like email or send codes through social media for communication platforms like Slack or Microsoft Teams. You can even deliver a gift card via a mobile device. This flexibility works for recipients as well. They can receive and enjoy their reward using whatever channel works best for them.
Runa: Build your next employee incentive program
Runa helps power employee incentive programs that reward hard work, reduce employee turnover, and help your organization meet any goal. The right employee recognition program can bill company culture, increase productivity, and even help support employee wellness.
Gift cards are an excellent way to offer a monetary reward as part of an incentive plan. Each employee incentive plan is different, but all work on the principle that employee recognition and employee satisfaction can dramatically increase when paired with a financial incentive.
Gift cards allow you to deliver an effective incentive for every employee, even when you have a diverse talent pool or work with distributed teams. A gift card platform helps localize employee recognition with a tangible reward that relates to the specific goal your organization is trying to achieve. For every employee, even when you have a diverse talent pool or work with distributed teams. A gift card platform helps localize employee recognition with tangible reward that relates to the specific goal your organization is trying to achieve.
Ready to add gift cards to your incentive program? Let us show you how, with a free demo.