Rewarding your teams regularly throughout the year can be an important part of building a thriving company culture. Small monetary rewards help to keep employees motivated and constantly striving to achieve various goals, all of which can contribute to meeting important company objectives.
A well-constructed incentive plan is one of the most effective ways to introduce these types of incentives while maintaining a clear structure that not only keeps the program affordable but also helps the business to get the most ROI from the initiative.
To achieve this, however, there needs to be a clear framework from the beginning that businesses can follow. Below, we’ll address some of the standard features of a successful employee incentive program and key considerations to keep in mind.
Defining Clear and Measurable Goals
Although incentive programs can be highly effective in business settings, not all of them are created equal or suited for every environment. To make sure you’re getting the most value from the incentives you offer, it’s critical that everyone has a clear picture of what performance looks like and how the program is measured.
One of the most effective ways to structure employee goals within an incentive program is to make them SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound). This is a commonly used format when helping businesses to define goals that serve a specific purpose, and are easy to track for both the employer and employee.
Taking this step helps employees to view the incentive program as fair and transparent and eliminates confusion along the way.
Structuring a Tiered Incentive System
Using tiered incentives can be really useful when you want to make sure you’re recognizing different levels of performance. This can give more of your employees flexibility when achieving more rewards while making your incentive program more approachable for everyone.
These types of programs work on a progressive scale, with rewards being smaller for easier-to-achieve goals and larger for more difficult ones. Many times, these types of incentives help employees to stay focused on their long-term goals and can help to keep them motivated long-term.
When building this type of incentive system, be sure to be clear about how each tier is constructed and make sure employees understand how all elements of the progression system work.
The Role of Financial Bonuses
Financial rewards almost always get a certain level of interest from employees. These are commonly used in sales teams when businesses are trying to achieve certain revenue targets. However, they can also be used as part of your incentive programs available to all employees when implemented correctly.
If you decide to put certain financial bonus opportunities in place, there are two critical elements you need to get right: full transparency and the right dollar amounts.
There shouldn’t be a mystery as to how bonuses are calculated. Formulas in place that only accounting or senior leaders have access to can quickly build mistrust and can make the system seem unfair.
The other thing to consider is the amount you’ll want to offer. If the total value of the incentive is too low, you’ll likely not get the amount of engagement you want. However, if the number is too high, you may be creating an unsustainable format that can create bigger problems for the business down the road. Balance here is key.
Implementing Non-Monetary Rewards
Not all incentives need to have a dollar figure attached to them. For many employees, there may be other rewards or company perks that achieve the same level of motivation in an incentive program.
To better understand what type of rewards are likely to give the performance results you’re looking for, consider taking company surveys and polling employees on the types of benefits that matter most to them.
For example, you may find that a good majority of employees are looking for more opportunities for career growth or would like access to development courses. In other groups, you may notice that the majority would prefer a bit more work flexibility or additional time off.
All of these are different areas you can explore when considering implementing non-monetary incentives.
The Strategic Use of Gift Cards
If you’re struggling to decide the type of incentive that will work best for most employees, don’t underestimate the effectiveness of gift cards. Offering gift card incentives is an easy and effective way to show recognition to employees in various ways.
They are highly versatile and can be used to celebrate small wins, hitting work milestones, or in tiered incentive systems. One of the best advantages of gift cards is that they offer employees a lot of choice on how they’re used. You can either keep them universal and usable at a variety of places or show your employees how well you know them by giving them cards to their favorite restaurant, coffee shop, or retail store.
The nice thing about gift cards is that they’re easy to administer. You could opt for a physical card or subscribe to a digital gift card service that allows the employee to choose a card that works best for them.
Integrating Incentives with Company Culture
Any incentive program you create shouldn’t feel like a separate system that was built on top of your current procedures. For your program to really work, it should feel like it’s a natural extension of your company’s DNA.
If your culture is focused on supporting growth and innovation, then your incentives should reward creative problem-solving or introducing new ideas into company projects. If one of your core values is teamwork, rewards should mirror this and be focused on celebrating group achievements instead of only individual incentives.
When you align your rewards with your core values, you help to make the program a more effective and sustainable tool for motivation. It helps to reinforce positive behaviors around the office and can be a great way to keep everyone on task.
Monitoring and Adapting the Program
Incentive programs should be regularly evaluated over time to ensure they’re achieving the results the business is hoping for. Because of this, it’s important not to get into the bad habit of creating a structured program, but then simply leaving it in place without any further iteration. The incentive programs will evolve over time, and to make sure your program stays effective, you have to keep a pulse on how it’s doing.
Some tips for achieving this include:
- Checking in throughout the year: Make sure you’re regularly asking your team for feedback. See if the current rewards are still motivating them or which parts of the program may have fallen flat. Their direct input is your most valuable source of information.
- Look at the results: Keep an eye on the performance data associated with your incentives. Consider if the program is actually encouraging the behaviors and outcomes you were hoping for. The numbers will help you see what’s working and what might need to be adjusted.
- Keep the program flexible: Don’t be afraid to make changes. What worked last year might be irrelevant today because your company goals, your team, or the market have changed. Being willing to adapt is what keeps an incentive program a relevant tool for the long run.
Start Getting More Value From Your Incentive Programs
Employee incentive programs are a great way to help your teams stay motivated and achieve more for themselves and the business. By structuring your program the right way and following the strategies discussed, you’ll be able to maximize the value of your incentives while creating a healthy and enjoyable company culture for everyone.
Author Name: Cindy Mielke
Author bio: Cindy is passionate about the incentive industry. In addition to her role as Vice President of Strategic Partners here at Tango, she is a Certified Professional of Incentive Management who proudly serves on two industry boards. When she’s not working, Cindy enjoys spending time with her family—including three cats, two dogs, and a horse—and sharing her love of nature as a Nebraska Master Naturalist.
