Knowing When to Use Incentive Programs in Your Organization

Non-cash incentive programs and fringe benefits can make a dramatic impact on your employees’ attitudes, which should in turn improve results. You can give employees the greatest incentive program, but if the strategy is not appropriate, you can impair a sense of ownership in the organization.

If you don’t know what kind of incentive programs to employ so as to motivate your people to work and increase productivity, here are some tips that you can use:

1. Sharing the shares.

Use share schemes as an incentive program to reward people for contributing to team success.

An employee who sees his or her efforts rewarded with company stock  will more closely identify with the company, be committed to its success, and perform more effectively.

In reality, it may be hard to tell whether the company’s success is due to employees owning shares, or whether the success itself has led the company to issue shares. It is also difficult to pinpoint whether the share scheme actually impacted employee performance.

Nevertheless, by giving people a stake in the company as an incentive program, you are making a highly positive statement about them, which encourages them to feel positive in return.

2. Gifts are not just for Christmas.

Surprise people with gifts they do not expect. Expected remuneration has less impact than the unexpected. Even generous pay rises are taken for granted after a while, as salary wishes increase accordingly.

Incentive programs such as a small cash bonus, in the form of a gift, have an unequal worth in the eyes of the recipient. An employee could use a cash award to buy a gift, perhaps a weekend vacation, but that would provide less satisfaction than an incentive program in kind from the management as a reward for work well done.

Consider this, which incentive program is better:

Scenario #1

A company called for a special meeting for all of the employees that had achieved the sales quota for the month. In the meeting, the company announced that the incentive is a gift certificate.

Or  Scenario #2:

The company gave them a specialized mug embossed with the word Congratulations, plus a special card with a special message personally written by the manager.

Between the two incentive programs, scenario #2 shows more appreciation and thought. Gift certificates could be a good incentive program but it is sometimes taxable, so they get only a fraction of what was written on it. Plus, the first incentive program is more rigid and lacks personalization and appreciation.

On the other hand, the second incentive program is far more favorable. A more specialized and personalized gift idea as incentive program can be more appreciated. It makes your employee feel that they are individually valued especially if it comes with a thank you note.

Best of all, presents are also a better incentive program and a cost-effective method of motivating staff when cash is short or when competition does not allow an increased pay.

3. Optimizing benefits

Fringe benefits have become a much less effective incentive program financially in many countries because of tax charges, as mentioned earlier.

Good pension schemes, however, have become more attractive as an incentive program wherever state-funded provision falls. The same applies to medical insurance. The knowledge that the company cares for its people in sickness, health, and old age is a basic yet a powerful factor.

Other benefits, such as company cars, paternity leave, vacations, and help with children’s education and care as incentive programs can improve the quality of people’s lives. Electronic devices, from mobile phones to computers, directly benefit the company, but as an incentive program, the individual also gains personally from their availability.

Ultimately, loyal and happy employees tend to work harder, leading to increased overall productivity and performance in your organization.

4. Bequeath status

The modern company, with its flat structure and horizontal management, typically avoids status symbols that do not align with the achievement of organizational goals. These symbols can include reserve parking places and separate dining rooms

However, important-sounding job titles are easy and economical forms of incentive program at the same time a better way of providing recognition and psychological satisfaction. So, now you know that incentive programs don’t necessarily mean it has to be in the monetary form. Remember: giving people incentive programs, regardless of approach, sends a very positive signal to your employees. As the old adage goes, it’s the thought that counts.

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About Dequiana Jackson

Dequiana Jackson, CEO of Inspired Marketing, Inc., is a small business marketing coach who teaches women entrepreneurs how to monetize their message so they can make more money from their expertise. Dequiana is the author of Know Your Business: How to Attract Ideal Clients & Sell More and runs the award-winning blog,

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