For many employers, rewarding staff means providing generic employee incentives like monetary bonuses, extra vacation days, or performance recognition. While these incentives might be considered a good job perk to some, top talent today is growing more attracted to companies that go the extra mile to boost employee engagement and overall job satisfaction.
Fortunately, going the extra mile doesn’t always have to cost you extra, too. Ready to make your workplace somewhere talented people want to stick around?
In this article, we’ll dive into 16 cost-effective employee incentive tips you (maybe) haven’t thought of yet. But first, let’s look at why incentives are important to pay attention to.
What Are Employee Incentives?
Employee incentives are rewards provided to employees for meeting a goal or accomplishing a task. Unlike employee benefits, which often include health insurance, vacation time, stock advantages, etc., employee incentives are bonus rewards (in addition to benefits) designed to boost motivation toward meeting company goals.
Some of the more popular employee incentives include cash bonuses, points, gift cards, extra time off, experiences, or gifts.
What is the Impact of Incentives on Employee Performance?
A good employee incentive program is an important piece of the puzzle to boost engagement and job satisfaction. Employers who include incentives in their employee offerings often see improved:
Investing in employee well-being is a highly cost-effective, strategic business move! As a result, your company is likely to experience:
- Less turnover.
- Lower absenteeism.
- Fewer accidents.
- Higher customer loyalty.
Why? Employers that are intentional about their incentive programs and workplace culture understand that engaged, happy employees ultimately perform better and improve company growth. Research by Gallup indicates that engaged employees contribute to 23% higher profits.
It should be noted that employee incentives are only a part of the larger picture in a thriving work environment. Paired with programs that build supportive, respectful, and trusting cultures, incentives help create places where top talent thrives. When employees are thriving, 87% of thriving report smiling and laughing a lot!
Companies that don’t take engagement seriously often take a financial hit. Great employees end up leaving for better offers, increasing the cost of turnover. In fact, Gallup’s State of the Global Workforce: 2022 Report shows low employee engagement costs the global economy $7.8 trillion. Consider how much loss that is! Spending $1,000,000 daily would take you under 2,740 years to pay just $1 trillion. Yikes!
By investing even a little bit of time and resources into your employee incentives, both you and your employees will reap the rewards.
As you investigate how to improve your incentive program, you may already be familiar with some of the more popular types of incentives. An Incentive Research Foundation survey found some of the most preferred rewards, especially among a hybrid/remote workforce, include:
- Cash, points, and open-ended gift cards
- Time off
In this article, however, let’s look at some cost-effective tips to help you enhance your incentive program!
16 Employee Incentive Tips You (Maybe) Haven’t Thought of Yet
1. Apply The Employee First Method
You’ve likely heard the phrase, “the customer is always right.” You may have also heard companies claiming they are “customer-obsessed” or “always put the customer first.”
Of course, it’s not a bad thing to pay attention to your customer’s needs, but it should not be at the expense of ignoring your team’s needs or treating your employees poorly.
When employees feel seen, heard, and cared for, engagement increases, and, according to research, so do profits!
Big idea: Consider employee incentives that reward meeting customer-growth goals and engage employees in a meaningful way.
What are some ways companies like the award-winning Kempinski Hotels deploy an employee-first model?
2. Implement The Trust Flex
It’s no secret that workplaces have been changing, especially since the pandemic’s start. It’s growing more common for employees to expect flexible work options that include remote and hybrid work and flexible hours.
A recent research study discovered that 82% of employees and 84% of managers want to work more remotely because it provides them an opportunity for greater flexibility and autonomy. Some respondents to the survey even indicated that they’d be willing to take a 10% pay cut to be able to work remotely full-time!
What if there’s more at play here than people simply wanting to work where and when they want? What if it comes down to trust?
It turns out that a lack of trust decreases commitment and engagement. One study found that 78% of employers admitted to using monitoring software on their employees, even though 85% believe it’s unethical. Your employees aren’t babies who need to be monitored. They are grown adults who deserve to be trusted!
Big idea: Trusting your employees is an incentive all on its own.
What is The Trust Flex? The Trust Flex is about believing the best in your employees. It’s about remembering that you hired smart, capable, and amazing people to do an important job that they have the strength to do. When you trust your employees, you trust in their responsibility and autonomy to get the work done.
Implementing The Trust Flex looks like this:
- Believing the best in your team.
- Building a basis of clear communication and clear expectations of objectives.
- Being open to important information that is critical to the work.
- Remembering trust begets trust. Your trust in them will likely return their trust in you.
- Motivating your team with empowerment, not micromanagement.
- Creating a culture of trust in your team.
- And a big one: Allowing employees the autonomy to complete their work in whatever way suits their needs—this may look like allowing people to work remotely or breaking up their hours in the day to accommodate their children’s schedule.
- Be generous with access to information
The availability and accessibility of information are essential factors in a good employee incentive program. When your team is trying to achieve an objective, having access to information that helps them know whether or not they are winning is highly motivating. When employees lack access, it’s like being asked to increase the number of marketing leads without having access to data to indicate the number of leads you’re getting. How frustrating!
Think of access to information like a Monopoly board. Without the actual game board, employees don’t know where they stand!
Teams with access to important information:
- Take more ownership.
- Feel more confident.
- Free up managers who are no longer sole keyholders to the information their team needs to get their job done.
4. Promote the value of rest
Giving your employees extra time off as an incentive is a great perk, but it can often lose value if it’s not given within a culture that sees rest as important.
Managers who value their own rest and time off can help model the culture they want to build.
When people take time off, try these tips to promote the value of rest:
- Encourage employees to turn off their work notifications.
- Avoid reaching out to employees on their breaks, and encourage teammates to do the same. (Pro tip: If you want to send an email, use the scheduling feature to send it when they get back.)
- Celebrate time off by asking about it when they return and talking about your own. If it’s appropriate, ask them to do a show-and-tell with the team about their fun vacation!
- Plan around employees being absent so they don’t feel overwhelmed by the stress of what they’ll return to when they get back. This might look like taking a project off their plate or getting a temp-hire.
5. Give rewards as soon as possible after a goal is met
Many employers give bonuses at the end of the year. And while these bonuses are appreciated, research points to the value of rewarding employees more immediately. When you reward someone for reaching a goal soon after the goal is met, it boosts intrinsic motivation.
Incentives don’t always have to be monetary rewards, but they should be immediate if you want them to be motivating.
- Give smaller rewards for passing milestones toward a larger goal. This could look like a gift card for their favorite coffee spot.
- Give larger rewards for meeting a big goal or finishing a big project. This could be bonus time off at the end of the week.
- Bonus tip: Match the level of the incentive with the weight of the goal. For example, if someone lands a big sales deal, and you give them a Starbucks gift card as a reward, it may not give them the impression that you value the level of effort they put in.
Looking for more motivation ideas? Try one of these 20 ways to motivate employees.
6. Reward skill building
Sharp employees perform better and feel more confident. But if your primary focus is on revenue, your incentives and rewards may be more centered on activities that produce immediate revenue. Try adopting a long view for success by building into and rewarding your team’s skill-building.
Adopt a long view for success with some of these ideas:
- Invest in your staff with continued education opportunities (conferences, books, online classes, etc.
- Structure your staff schedules to include time for sharpening their skills.
- Start a team book club centered around a topic that sharpens skills or builds your team.
- Reward employees for gaining certifications and create space for them to share their learnings with the team.
- Bonus tip: Take advantage of professional soft skills courses like People School.
Master Your People Skills
- Create a Memorable Presence
- Communicate with Confidence
- Achieve Your Goals
Have a question about the presentation or People School? Email Science of People support.
7. Bring back water cooler conversations
One of the disadvantages many leaders are talking about regarding remote work is the need for more connection and face time they have with others, especially in a casual context. It doesn’t mean people don’t see each other at all, but often our Zoom meetings are focused on agendas and goals, with little time for casual connection.
People miss those water cooler conversations! Since humans are built for connection, you can bring back the water cooler conversations even in a remote context. Research indicates this is especially important for managers.
A good manager is just as much an incentive for employee engagement as a good benefits package, if not more important. As managers connect with their employees, they build trust and increase engagement. In a remote environment especially, employees want more connection with their manager.
Action step: Build time into your workweek for a casual connection with your team.
- Schedule a virtual water cooler hour to talk about your weekends.
- Create a Slack channel for fun news or furry friend updates.
- Plan a weekly or bimonthly lunch to connect with your team.
8. Utilize technology to recognize people
Technology is a great tool to recognize your employees, especially for remote teams.
Nowadays, employers are set up with internal websites to report information and news about the company. This is also a great place to declare your praise for an employee’s great work and let other leaders and peers celebrate their excellent work. Don’t have an internal website? You can also accomplish this on programs like Slack.
You can also use technology to collect positive recognition from other leaders and your employee’s peers that may otherwise go unnoticed by you. Consider setting up a Google Form and communicating to your team that when they see great work or behavior, share it!
9. Build intention around your incentives
Being intentional about your incentives gives them more value. Simply throwing incentives and perks at people without any structure, hoping they perform, is a waste of time. It could actually turn out to have a negative impact on engagement!
Have you ever given out an extra vacation day or two because you asked your team to work overtime on a project that perhaps you didn’t plan for appropriately? While appreciated to some degree, the supposed “perk” may have been received with an empty thanks when what your team really needed from you as a manager was better planning before getting to that point.
This is why paying attention to how and when you provide incentives is important.
Action step: Add structure to your employee incentive program by matching incentives to SMART goals and creating a winnable game.
- Align your incentives to goals. Make sure your goals are SMART—specific, measurable, attainable, relevant, and time-bound. By setting clear expectations with your team, getting their buy-in, and aligning your incentives to match, you help define what success looks like and make accomplishing goals more attainable and potentially even more fun.
- Create a winnable game. As long as your goals are SMART, measuring where you’re at in relation to your objective will allow your team to understand when they are winning or the steps they need to take to see progress. This creates a winnable game and adds an element of camaraderie and support for one another. Bonus tip: try acting on “lead measures,” as suggested by Chris McChesney.
- Get feedback. Your employees are at work every day. They also know themselves better than they know anyone else. They know what kind of incentives motivate them the most and how their strengths contribute to success. So, ask them what’s working, what’s not, and how incentives can better align with their overall goals.
10. Learn the 5 languages of appreciation
When your employees feel appreciated in an individual, meaningful way, job satisfaction goes up. But sometimes appreciation can fall flat. The reason for this may simply be that you’re speaking a different language of appreciation.
Much like the 5 love languages, the languages of appreciation can help you better understand how your employees feel most valued.
Action step: Use the 5 languages of appreciation with your employees.
- Tangible Gifts. For employees who feel appreciated with gifts, discover what they like—favorite candy, Starbucks drink, authors, hobbies, etc. and when they land that sales deal or finish a hard project, send them a gift!
- Quality Time. For employees who feel appreciated for quality time, be disciplined about keeping your regularly scheduled one-on-one meetings to provide undivided attention and time to connect. While simultaneously building trust, employees will feel appreciated and seen.
- Words of Affirmation. For employees who feel appreciated with words of affirmation, don’t hold back your praise for end-of-the-year reviews. When you see work well done, say something! Note that some folks may prefer words of affirmation in a public setting, while others may instead receive a thank you note. Ask your employees how they like to be appreciated in this way so you don’t embarrass someone unintentionally.
- Acts of Service. For employees who feel appreciated for acts of service, try paying attention to the kinds of things they do for others. Often the way they like to be appreciated is reflected in how they appreciate others. This might look like taking care of something on their busy plate, bringing them a cup of coffee when you notice they forgot theirs this morning, or giving them a gift card to have their house cleaned.
- Physical Touch. For employees who feel appreciated with physical touch, try work-appropriate options like a high five, fist bump, or handshake. If these options aren’t available to you remotely, you can accomplish a similar chemical reaction in a video call with good eye contact. You might also try a gift card for a massage!
Bonus tip: Combine appreciation languages. Many people have more than one language of appreciation. When you discover how your employees like to be appreciated, try different combinations of appreciation to recognize good work.
11. Cater to your employees’ strengths
Assessments like CliftonStrengths can help you better understand the strengths your employees bring to the table.
There are a couple of things you can do with this valuable tool:
- Identify misalignment. Take your learnings to analyze whether you have a great team member performing poorly simply because they are in a role that doesn’t quite align with their strengths. Misalignment can have a negative impact on overall job satisfaction and can contribute to someone feeling like incentives are unattainable.
- Identify growth potential. Discover where your employees feel most alive, and assign projects and SMART goals that align with their strengths. Even if you cannot give someone responsibility in 100% alignment with their strengths, a little bit helps build stronger job satisfaction and engagement. Employees are likely to experience greater joy in receiving incentive rewards for success they achieved for work in their strengths.
Bonus tip: Check out more ideas on how to create a strength-based organization.
12. Personalize your recognition
The more personal your incentives to your individual employees, the more seen they will feel. Providing the same blanket incentive to all your employees might win over some, but it may not produce the same level of motivation for others.
Assessments like the Big 5 Personality Quiz or The Motivation Code can be really helpful in identifying the top intrinsic motivations in your team and adjusting your incentives to align with how your employees are wired.
Take what you learned from the Big 5 Personality Quiz, The Motivation Code, the languages of appreciation, and their strengths from tips #2 and #3, and apply it to your incentive program.
The character Leslie Knope from the sitcom Parks and Recreation is an excellent example of providing individual rewards to her employees. She is THE queen of thoughtfulness.
If you have a hard time keeping personal details straight about your team, try these tips:
- Create an excel document including information on each team member: birthdays, appreciation languages, strengths, motivations, favorite candy, favorite coffee, and favorite lunch spot.
- As you have conversations with your employees and they mention things that are unique to them, make a note in your excel sheet.
- Refer to your excel sheet when thinking of a personal incentive to give to one of your employees.
13. Include significant others and families
When thinking of your employee incentive programs, it’s valuable to remember you’re working with a whole person. Each employee often comes with a significant other, kids, fur babies, friends, hobbies, and outside stresses. Remembering that your employees are more than the role they play in your organization will make them feel seen and valued for more than just their job.
Better yet, when significant others and families see that you value them, they are likely to be more excited about you as a manager and the company as a whole.
Think of the whole person when planning your incentives:
- What activities do they like to do with their significant other or family? Consider gift cards they can enjoy, too—dinner for the family, movie tickets, etc.
- What kinds of activities are they involved in outside of work? Personalize incentives around one of their hobbies.
- Are they in love with their cat? Consider a fun gift for the fur baby, especially if they participated in some of the remote Zoom meetings!
14. Polish your self-care
Managers can make or break someone’s experience at work—they are incentives all on their own! Have a bad one, and you’re likely looking toward the door. Have a great one, and you’re probably more willing to go above and beyond.
This cannot be stressed enough: your leadership health as a manager is critical—not just for your well-being and happiness but also for the well-being of your team and your organization. If you’re feeling a sense of burnout as a manager and you’re leading from an empty tank, there’s likely a ripple effect your team is feeling too.
Some of the most significant contributors to burnout are unfair treatment at work, unmanageable workloads, unclear communication, lack of support, and unreasonable time pressure. Are you feeling this? Is your team feeling this from you? What can you do for yourself to lead from a full tank?
- Take care of your mental health by seeing a counselor regularly.
- Get a coach or a mentor to support and challenge you through good and bad times.
- Join a peer group and get together once a month over a meal to share ideas and learnings.
- Listen to podcasts or read books that fill you up and encourage you to think differently.
- Take up a hobby to give your mind a mental break from work.
- When was the last time you truly relaxed on vacation? Take one, and this time, completely leave work at work.
As you take care of yourself well, chances are you will take better care of others too.
15. Build your management skills
Your incentives can be the best in the world, but if they are not making your team feel seen and your style of management makes them feel ignored, it won’t matter how good your incentives might be. Your management style is critical.
In a recent study about remote worker engagement, it was discovered that respondents often feel forgotten or not needed, reporting that they are 38% less likely to receive bonuses.
As the remote and hybrid workforce grows, this is an important factor to consider for managers especially. It’s also a reminder that no matter where your employees work, your attention as a manager is critical in employees feeling recognized for their contributions.
A Journal of Labor Economics study about the value of bosses discovered that a boss who rates in the 90th percentile could raise productivity by as much as 50%. This study confirms that employees are more likely to quit a job when they have a terrible boss.
In essence, if you’re a good manager, YOU are a good incentive for people to stay!
Some of the research-backed characteristics of a great boss include:
- Being a good teacher
- Being a good coach
- Exhibiting expertise in your field
- The ability to identify what’s unique about each employee
- A knack for empowering employee uniqueness
- Good people skills
- Skills for executing a company vision
16. Develop your people skills
Since good managers are an incentive in and of themselves, investing in your people skills can help you be keener on the kinds of incentives that will make your team feel valued.
- Your people skills are a contributing factor to your success and the success of your team.
- Your people skills contribute to setting the tone of your team culture and how your team relates to one another.
- Your people skills help you recognize unique employee contributions in an authentic, meaningful way. Research indicates that when managers recognize employees, their recognition contributes to greater motivation, even more so than when an executive or peer recognizes them.
People with good people skills are great listeners, collaborators, and communicators, to name a few. Ultimately, it’s about authentically caring for people.
Check out Vanessa Van Edwards’ article on 10 Essential People Skills You Need to Succeed to learn more about how to build your people skills.
Enhancing Your Employee Incentives Takeaway
To summarize, take note of these helpful tips to enhance your employee incentive program to boost engagement:
- Put your employees first. Authentically caring about and trusting your employees is good for business! At the end of the day, it improves productivity, customer care, and organizational growth.
- Get personal. Personalizing your incentive program around your employees’ personality, strengths, motivations, appreciation language, and even including their hobbies and families makes them feel seen and valued.
- Take time to connect. Research indicates that connection with managers is a key factor in building morale. Bring back the water cooler conversations!
- Give timely rewards. Don’t wait for the end-of-the-year bonuses to reward employees. Incentives don’t always have to be monetary rewards, but they should be immediate if you want them to be motivating.
- Promote the value of rest. Giving your employees extra time off as an incentive is a great perk, but it can often lose value if given within a culture that sees rest as necessary.
- Reward skill-building, not just revenue-building activities. Adopt a long view for success by building into and rewarding your team’s skill-building.
- Be generous with access to information. When your team is trying to achieve an objective, having access to information that helps them know whether or not they are winning is highly motivating.
- Utilize technology. Provide access to information, reward your team, and collect helpful feedback from other leaders and peers about things they notice that are worth a celebration.
- Take care of yourself as a manager. Research shows that managers are one of the biggest factors in employee engagement and job satisfaction—they are an incentive all their own! Build your management skills and people skills, and take care of yourself to be the best manager you can be.
Applying these enhancing tips to your employee incentive program will help you boost engagement, morale, and organizational growth! For more ways to boost morale and engagement, check out our article on how to turn your employees into all-stars.