Which of the following is the most commonly used reward for motivating employees?

Has your workforce ever suffered from a lack of engagement? Perhaps your team members were experiencing burnout after a difficult stretch, or maybe they appeared less motivated than usual. If so, you probably saw the effects in the form of greater turnover 一 especially among your top performers 一 and lower productivity across your organization.

Disengagement is cropping up at many companies, and can stem from over exhaustion, ineffective management, or misalignment throughout an organization. Employee engagement should be a huge concern 一 low morale can lead to high turnover rates and low productivity, and ultimately, disengagement has a negative impact on your bottom line. Unhappy workers cost the U.S. up to $550 billion per year.

Leaders and HR have a significant role to play in sustaining employee engagement and motivation. “Quality of senior leadership” is one of the top two factors of employee satisfaction, and it falls to HR professionals and leaders to provide all team members with the resources they need to stay motivated.

Perhaps the most important thing they can do to keep employees engaged is effectively incentivize them. Incentives give employees something to strive for and provide tangible acknowledgement of their great work. When an incentive is offered, 85% of workers feel more motivated to do their best.

If you’re interested in discovering the most impactful employee incentive programs available for your organization, read on.

Employee incentive programs are designed to attract, engage, and retain talent. Incentives themselves are rewards and benefits used to motivate positive behaviors in your workforce. They come in many forms, like tuition reimbursement, more time off, and additional flexibility in work arrangements. You should choose employee incentive programs that suit the desires and personal styles of your staff and align with your company’s values.

The value of employee incentive programs

If you want to boost employee morale and drive engagement, you need employee incentive programs. Organizations worldwide recognize the importance of incentives, with the incentives industry now being valued at over $100 billion, $46 billion of which is attributable to non-cash incentives.

Incentive programs work because they leverage human behavior. Research out of Cornell University showed that immediate rewards increase intrinsic motivation by linking an activity and a goal, so employees rewarded more frequently are more motivated to complete associated tasks. Organizations that use employee incentive programs experience a 79% success rate in achieving their established goals when the reward was offered. This means that your organization needs to move beyond just annual years of service awards and embed employee incentive programs into your everyday culture.

Incentive programs can increase employee performance by as much as 44% as well, and they can motivate up to 66%of employees to remain with their company. Companies that use tangible sales incentives also see annual revenue increases that are three times higher than those that don’t. And professionals satisfied with their benefits are more than twice as likely to also be satisfied with their work.

10 must-have employee incentive programs

Employee incentive programs have tremendous benefits, but where should you start? Here are some incentive examples that have been proven to engage and motivate employees over the long haul.

1. 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 just 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.

An recognition and rewards program is a foundational requirement of the employee incentives experience, as it embeds incentives into each team member’s everyday life. To accomplish this, recognition should be given frequently and in real time. Organizations that do so are 41% more likely to see increased employee retention and 34% more likely to increase employee engagement. Perhaps most importantly, make frequent recognition easy for everyone on your team with an employee recognition platform that facilitates recognition from anywhere at the click of a button.

Incentivizing employees effectively requires both social and monetary recognition 一 the latter through a points-based reward system.

Discover the power of incentivizing your workforce through recognition and rewards.

Social recognition

As Harvard Business School researcher Amy Whillans notes, “cash matters in people’s lives, but it’s not all that matters.” Social recognition can be even more meaningful to employees than tangible rewards. It’s a low-cost way to allow everyone at your organization to express their gratitude for other team members publicly 一 even a simple thank you can be enough to keep someone motivated. Harvard Business Review found that when workers’ strengths were recognized by managers, it resulted in happier workers and a 14% to 29% increase in profit. And a survey by McKinsey discovered that companies can achieve a 55% improvement in engagement by offering social recognition.

Points-based recognition

A points-based reward system lets every employee redeem points for rewards of their choosing in categories like merchandise, digital and physical gift cards, experiences, give back, and concierge. Offer an extensive catalog so employees can find rewards they crave whether they prefer electronics, fashion, hotel accommodations, or music. To give your employees even more options, consider rechargeable prepaid cards that allow your employees to have full control over what they spend their points on and personalize their rewards experience. This freedom is critical, as employees will value rewards they actually want far more highly than yet another generic mug or t-shirt.

Points are tied to specific recognitions as well, which makes it easy for all team members to frequently recognize and reward each other. You can even enable a one-click “boost” option that lets employees add points to successes as they’re shared. Employees will enjoy seeing their balance rise as points accumulate along with recognition.

Every time an employee sees their reward, they’ll think about the actions that got them the reward. The more key behaviors are recognized, the more likely they will be repeated: 92% of employees say that they’re more likely to repeat an action when they’re recognized for it. If you reward employees for generating leads or completing tasks more efficiently, you’ll continue to see that type of success.

Don’t decide on a recognition and rewards solution without this handy guide.

2. Referral programs

Why have your recruiters spend time posting job descriptions online if you can rely on your own employees to source qualified candidates? Employers often offer benefits for candidate referrals, and for 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 that you continue to get 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 (equal 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.

3. Professional development

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 development is important in their job. When you invest in your employees’ careers, it 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 take advantage of 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 the chance to win recognition points every step of the way. You can also provide a coaching program for new managers, as Facebook does. 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.

4. Profit sharing

Profit sharing plans are a type of defined contribution plan that can serve as an alternative or supplement to more traditional plans like a 401k. In a profit sharing plan, employees receive contributions to their retirement account (in the form of cash or stock) and sometimes get direct payments as well. Employers have the freedom to reduce these at any time, 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. This 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 offering to match part or all of their 401k contributions. The amount of the match will typically be limited based on a percentage of the employee’s income.

5. Health and wellness

Employees aren’t able to 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. This is especially critical with the pressures employees face now: 59% are taking less time off than they normally 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 also reward employees who hit wellness milestones like quitting smoking or completing a steps challenge.

One of the best ways to encourage employee wellness is by using a centralized rewards marketplace that encourages the adoption of healthy habits both at work and 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.

6. Tuition reimbursement

Employees today consider ongoing education a priority. EdAssist found that 79% of employees say that tuition assistance is an important or very important factor in joining a company. And employees who participated in Cigna’s tuition assistance program were 10% more likely to be promoted and 8% more likely to stay with the company.

Every employee, up to and including the CEO, should be learning new things on a daily basis. Offering tuition reimbursement can solidify this best practice. What’s more, encouraging continuing education can be a great way to build a culture of recognition. Take the time to congratulate employees on completing educational milestones, such as getting a new certification or graduating in their Masters program, with team-signed digital cards and public recognition of their achievements.

7. Bonuses and raises

Rewarding employees with bonuses and raises can be incredibly powerful. A survey conducted by Payscale found that 65% of U.S. employees prefer bonuses based on personal performance. That said, you need to lay out crystal clear metrics and objectives so that employees know exactly how they can achieve their bonus. Strike a balance with your policies 一 the requirements shouldn’t be too difficult or too easy to meet. Be careful not to pit employees against each other, either. This can backfire and lead to resentment or even alienation from your company.

8. Fun gifts

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.

Popular employee gifts run the gamut, from onsite massages, to catered lunches, to a half day off of work. Tech gadgets, delicious snacks (delivered or in-office), and quality swag (branded or unbranded) are great ideas as well. And for employees who would rather choose a gift themselves, providing gift cards is a great solution.

9. Additional time off

Fifty-eight percent of workers would agree to a salary reduction if they could get extra vacation time. Time off gives employees the chance to maintain work-life balance and can greatly increase motivation. Encourage them to take the paid leave they have 一 only 35% of employees actually use all the PTO they earn 一 and offer extra vacation time and flexibility if employees meet certain 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’d take a lower paying job if it meant having more flexible working arrangements.

10. Choice of projects

Giving high-achieving employees the right to choose their own projects is a wonderful way to empower and incentivize them. Managers build trust when they permit employees to decide what to work on, something that many companies struggle with. A Harvard Business Review meta-analysis found that leaders who empower their employees are more likely to be trusted by their subordinates compared to leaders who don’t. Prioritizing this incentive 一 and other ways to foster an environment of trust 一 is a great decision, as employees who feel their organization supports them are likely to support their organization in turn by going the extra mile and delivering exceptional results time after time.

Of course, the project options you offer should be personalized and appealing to each employee. A blanket, one-size-fits-all incentive isn’t as impactful. Team leaders and staff should communicate with their employees about their short and long-term goals, as well as their career interests, on a frequent basis and offer projects to match.

Access our e-book covering effective ways to incentivize your modern workforce.

5 best practices for employee incentive programs

After you choose the right employee incentive programs for your company, you need to put them into practice. Here are some best practices that can help you implement impactful incentive programs.

1. Make your program inclusive

Ensure all team members have access to your incentive programs by implementing a variety of programs that fit every area of your business. You should also recognize every stakeholder who helps lead your incentive programs, as well as all those who participate in them. And make sure your incentive program comes with an engaging, user-friendly platform where team members can easily participate and reap the benefits. All these practices can help employees feel involved and part of an inclusive work environment.

2. Promote your incentive programs

Ensure that everyone knows about your incentive programs to grow awareness and encourage company-wide participation. To accomplish this, HR should build a promotion and communications plan to make every employee aware of the available incentives programs. They can follow this up by working with leaders to run ongoing campaigns that engage employees and keep them participating. These campaigns might include marketing tactics like posters, fun messages using the company email or intranet, or games that tie into the incentives. Also, provide information about your incentive programs in your employee onboarding checklist so that every new hire is educated on day one.

3. Have leaders show the way

Leaders must serve as examples by actively participating in and advocating for incentive programs. After all, the success of employee incentive programs relies on leaders promoting and building awareness of incentives programs within their teams. Your HR  team should train leaders on how your employee incentive programs work and on the value of using them as engagement tools. This could take the form of reference materials, training sessions or webinars, and even online learning courses. They can then effectively encourage their team members to adopt your company’s incentive programs.

4. Personalize your incentives

Personalizing your employees’ incentives experience is a must. Team members won’t work hard towards a goal if they aren’t compensated for it in a way that’s meaningful to them. While 56% of employees think their employer should understand them as well as they’re expected to understand customers, only 39% felt their workplaces were fulfilling this expectation.

Leverage technology like AI and advanced analytics to start tailoring each individual’s employee experience. Some HR leaders are using HR hackathons, employee-journey mapping, and design thinking to uncover employee needs. And of course, seeking feedback from employees is the best way to personalize their incentives.

Learn why personalization is the missing link in employee experience.

5. Ask for feedback

Listening to your employees is the only way to gather accurate feedback on your incentive programs. Take the time to see how well your current incentives are being received and to understand what your employees really want.

To start listening, use an employee feedback platform that allows you to conduct pulse surveys. This can give you invaluable insights: employees can provide ideas you wouldn’t have thought of otherwise, and they’re your best source to gain a better understanding of what types of employee incentive programs will make the biggest impact. Consider an always-on feedback channel that can keep the door open for employees so they can share their input anytime, anywhere as well.

Customize your incentive programs based on employee feedback to demonstrate that you care about and have considered their opinion. Then continuously check in with employee engagement surveys to make sure your adjustments are landing well. And it’s often helpful for leaders to set up meetings with their teams to review survey findings and build collaborative action plans together.

Make your incentives meaningful today

A recognition and rewards solution is the best way to create and manage employee incentive programs by consolidating them all in a centralized platform. Achievers Recognize is an award-winning platform that gives every team member (from staff to managers to the C-suite) the opportunity to quickly send social and points-based recognition to each other. And with over 2500 global brands, the Achievers Reward Marketplace lets employees redeem their points for rewards they truly want.

Achievers recently secured ranking as a top provider in the latest HRO Today’s Baker’s Dozen Customer Satisfaction Survey for Recognition. And it’s trusted by major companies like General Motors, Discover, and McDonald’s.

“It’s brought everyone closer than they ever have been before. Everyone has visibility into the work that’s being done in areas that they normally would not have seen visibility in the past. And it allows people to recognize each other that typically might not have occurred simply because of the time and the distance.” – Tom Gergets, McDonald’s CTO

Jumpstart your employee incentives programs today by scheduling a free demo of Achievers Recognize.

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