incentive-programs.jpgEmployee Incentive Programs

Incentive Programs for employees are used by management to encourage and reward specific actions. A properly run program can provide just the help a company needs.

Do you need Employee Incentives, or Employee Recognition? They are NOT the same, yet many use these terms interchangeably. To be sure you are implementing the right employee incentive program to meet your objectives,  see this Definition of Incentives vs Recognition.

Incentive - Recognition Programs can be the best
investment you can make in your business.

Many successful businesses usually have at least one or more recognition or incentive plans for employees in place at all times. Some for specific recognition, such as:

Others include Sales Contests, and Points-based Employee Incentive programs. These effective incentive programs are designed to change employee behaviors by continually offering incentives to motivate employees and rewards for improved performance.

Enhanced employee performance is directly related to their receiving constant positive feedback. When positive feedback is provided, your employee recognition program becomes a powerfully motivating tool that builds morale, increases productivity, and improves employee engagement levels.

Tips for an effective Points-Based employee incentive program:

  1. Have a Vision for your business.

    Have an image in your mind of the expected future of your business. Having a vision will not only inspire you, but will help you inspire others to reach for the same goal.
    See this great resource showing how to re-write your company's future.

  2. Define your Company Objectives

    Identify business objectives, both strategic and tactical. Each should be:
    - Specific (ie: reduce accidents, improve attendance, reach sales targets)
    - Measurable Results
    - Action oriented - ensure the objectives are obtainable through employee actions
    - Realistic and obtainable
    - Time bound (no procrastination; set target dates)
    - Clear and easy to understand - keep it simple

  3. Define your program

    Will it be an Employee Incentive Program, a Recognition Program, or a combination of both?
    To help decide, see this detailed definition: Incentives vs Recognition

    Define the rules - if points are to be used, how are points earned?
    Define who is eligible to participate
    Establish a budget - which may break down like this example:
      - 75% of budget for Program Awards
      - 15% of budget for Program communications
      - 10% of budget for Program administration
    Set goals, varied by each job position, making sure each is attainable
    Define levels of achievement for each goal or objective
    Set point values for each goal (and for each level of achievement)
    Set a fixed duration for your employee recognition program (then possibly re-start with a modified program)
    Note: Employees will only be motivated when they feel they can actually attain your goals.

  4. Incentive Program Administration ( points tracking / reporting )

    Employee points based programDetermine your program tracking / administration system. Either: online point-bank platform, or a least-cost offline program
    - Who tracks, report, and post points
    - How to provide regular point status reports to employees
    - Who sets initial budget, and tracks the program’s status to budget?

    Note: For best results on your incentive program for employees, performance information must be frequently updated, and must be easily accessible to all program participants

  5. Plan your Program's Communication / Promotion

    Give your incentive program for employees a name and define its theme. Develop an exciting promotional campaign for the launch of your new employee incentive program just as you would for an actual product launch. You’ll want to capture the imagination of your employees. Explain your objectives, and rewards for their success. Once employees are shown how they can make a difference, they'll do it!

    Communicate often. The most successful companies make a big deal about their winners and awards (points, etc).  Make them feel special and others will notice. Let participants or teams know their current standings in the employee recognition program. If appropriate, even chart their progress on employee bulletin boards.

  6. Determine the awards to offer:

    Merchandise Awards Research and experience clearly indicate that merchandise awards are much more successful than money as employee incentive awards. Merchandise awards provide a continuous, long-lasting reminder of ones success, every time the award is seen or used. Also, cash awards are taxable, while tangible merchandise used in formal employee recognition programs and safety programs, usually are not taxable. Please contact your tax advisor for guidance with your program. See: Cash or Merchandise awards - what works best.

  7. Point-Earning-levels need to motivate average participants - Guidelines

    There are many variable factors to consider, such as: employee salary/bonus compensation program, degree of difficulty attaining your employee incentive program’s objectives, etc

    As a general guideline – over a 12 month period a participant of any incentive program for employees should be able to earn between 1% and 5% of their gross salary for sufficient motivation.

    The above is based on industry guidelines. However, each employee incentive or recognition program is built based on your unique business objectives, challenges, opportunities, and budget.

  8. Define Participant earning opportunities, such as:

    - Individual recognition; with weekly, monthly, or quarterly performance measurements
    - Group or Team recognition; Same frequency as above
    - Spot awards - Instant feedback plus a rewards for “caught doing the right thing”

  9. A few final thoughts...
    • Without Effective Employee Incentive / Recognition Programs, you will never fully optimize your employee’s potential and your company’s potential.
    • The most successful programs are the result of an ongoing process. For the best long term performance increases, plan to periodically adjust and improve your employee recognition program.
    • If you’re looking for a way to implement a cost-effective employee incentive program that will also help improve your bottom line, please contact us today.
    • Note: If you run your own employee incentive-recognition program, and would simply like great merchandise fulfillment, Select-Your-Gift can tailor a solution suited to your needs. Please contact us for details. also see: Employee Recognition awards
    • See two different points-based employee recognition programs Select-your-Gift offers: (more about Point-based Programs)

Let us help you develop your next employee incentive program.

We'll work with you to design an easy to use,
cost-effective way to boost employee performance.

Send Me Employee Recognition Info

See many ways to motivate and recognize employees