Employee incentives come in many forms, but they all serve the same purpose. Incentives help you to drive your staff to go above and beyond the call of duty. It is essential to understand what motivates people in today’s competitive environment.
You may incentivize your employees’ behavior, activities, and overall productivity in a variety of ways. Knowing how your employees want to be rewarded for their performance is a precondition for creating an employee recognition program.
For their daily accomplishments, research reveals that 54% of employees prefer a spoken “thank you,” while 31% prefer a written “thank you.” Moreover, 47% of employees would like to be acknowledged for achievements with promotions, while 23% would prefer a pay raise.
The Benefits of Incentivizing Employees
The value of employee recognition has been analyzed numerous times. Typically, HR professionals in charge of employee appreciation programs track their outcomes to prove their value to the bosses. HR business partners frequently initiate employee incentive programs that provide targeted business outcomes.
Fortunately, there is a massive quantity of data available to persuade executives of the value of employee appreciation. It’s worth noting that 70% of companies with an employee recognition program link it to its values, while 59% incorporate it into their talent strategy.
Incentives Increase Motivation
Employee disengagement costs businesses in the United States $500 billion per year. Increased employee engagement will have a favorable impact not only on the bottom-line, but on other parts of the work experience.
Employee engagement has been a hot topic among HR experts for decades, and several companies have demonstrated the benefits of highly engaged workplaces. You can read about how a recognition and rewards software platform called JobPts has helped organizations raise employee engagement by as much as 175%.
Incentives Boost Retention
To keep employees in today’s competitive market, businesses must become great employers and best places to work in order to compete for the best talent. That does not simply imply increased monetary compensation for employees.
“Becoming a great place to work includes cultivating a work environment where your employees will want to stay and thrive.”
According to a study, 68% of HR professionals believe their program positively impacts employee retention. Employee incentives might save you up to nine months’ worth of salary if you end up having to replace an employee who resigned due to lack of proper incentives or recognition in your organization.
5 Ways to Retain Employees Through Incentives
Pay Salaries and Bonuses
Companies that pay a mix of salary and incentives have the highest employee morale and productivity. Employees are compensated for completing all tasks assigned to them, and they are paid regularly. The incentive (which may be a commission for salespeople or a bonus for others) encourages them to accomplish and surpass their objectives, allowing them to earn more money.
Employees should be paid the salary component of their pay on a monthly or bi-weekly basis. Employees should be paid the incentive part of their pay as quickly as possible after achieving their objectives. As a result, quarterly incentive payments are often more motivating than annual payments. Monthly incentive payments are frequently the most effective.
Make the Incentive Easy
The incentive component of a strong pay plan should measure no more than two to four performance criteria, and all employees should be able to explain the plan in the time it takes to walk from your office building’s front door to your receptionist’s desk.
Set SMART Objectives
Specific, Measurable, Ambitious, Realistic, and Time-bound goals are called SMART goals.
· For salespeople, this involves setting monthly and annual income goals and goals for new account opening.
· Establish targets for the ratio of customer compliments to complaints and/or the number of customer complaints resolved on the first phone call for other customer contact personnel.
· Consider setting goals for personnel in accounts receivable based on the amount of overdue revenue they collect versus certain benchmarks.
· Consider setting goals based on the quantity of defect-free products you produce if you work in manufacturing.
While it’s acceptable to pay a portion of the reward based on the team’s overall performance, most of the incentives should be based on individual performance.
Keep up With Competitors
You should check what your competitors are paying every few years and change your compensation plan accordingly. You can do this informally by asking employees at other firms you interview about their payment plans, or you can do it more objectively by hiring an outside consulting firm to benchmark your plan against others and give you advice on how to improve it.
When you discover that your employees are no longer at parity with the market, adjust their compensation proactively. Don’t wait for them to ask. If they must ask you, it means they have already interviewed elsewhere and have discovered they are worth more than what you are paying. Be proactive with compensation, it will help with retention.
Offer Non-Monetary Incentives
Employees are motivated by several sources of recognition and rewards besides money. Consider organizing a yearly vacation to honor staff who have met specified objectives.
Company-sponsored excursions foster camaraderie and teamwork in addition to enhancing motivation.
Retention and performance can also be influenced by how you train, develop, and manage your staff. One of the finest methods to boost their motivation is to pay them as much as you realistically can be based on their performance.
“Boosting employee incentives can help an organization meet its goals. It shows employees that that they are significant to the organizations.”
With an increase in work fulfillment, employees are more joyful to go through their days at work and that naturally increase engagement.