As an employee incentive, cash isn’t king.
In fact, if you look at recent employee engagement trends, factors like “employee pay” aren’t even top-five engagement drivers anymore.
As part of Kazoo’s research on rewards and recognition systems that work, we uncovered how to make employee incentives effective.
Here are nine ways to create the best possible employee incentive options at your company.
1. Tie them to a thank-you
Gratitude goes a long way in the workplace. A sincere thank-you presented with an employee incentive lets an employee know exactly what they’ve done that you value.
A Glassdoor survey found that 81% of employees said they’re more motivated to work harder when their boss shows them appreciation. But the key: they didn’t just want the private words. They also wanted thanks in the form of things like company-wide recognition.
2. Increase the frequency
In the long run, big carrots handed out sparingly can be demotivating. An employee incentive approach with smaller, more frequent rewards stays meaningful and motivational.
Related: View our manager’s guide to meaningful recognition more frequently.
3. Add variety
Employees like to have more choice and control over their environment, so why not apply the same approach to their employee incentive? Offering a mix of rewards and incentives not only empowers employees, but also keeps your offerings from getting stale.
4. Include experiences
Whether it’s teambuilding, professional development, or pure fun, a custom experience can make for a truly meaningful employee incentive. And professional development doesn’t have to be costly. Incentive ideas such as a 1-on-1 lunch for career advice with the CEO or a coffee break for financial lessons with the CFO can have a major impact at a fraction of the cost of full-fledged L&D programs.
More and more studies are showing employees want to give back — and teams are more satisfied and productive when they have the option to. Everyone wins when companies add more charitable donations to the mix, so why not add them as an employee incentive option.
6. Give them time
Harvard Business Review has found that giving an employee predictable time off improves the entire team’s performance. Instead of ordering more generic gift cards, offer an employee incentive that gives them time back. In addition to days off, there are plenty of time-saving employee reward ideas you can consider.
7. Mix it up
There is no one-size-fits all employee incentive. In fact, the typical happy hour or pizza party may even be doing more harm than good by alienating employees who can’t participate for personal scheduling or dietary reasons.
The results of a study of Israeli semiconductor workers demonstrated the benefits of mixing monetary and non-monetary options:
- Non-monetary bonuses boosted performance slightly better than monetary ones
- Monetary bonuses affected performance more when the employee had a mix of options and chose them
- When an employee incentive option was taken away from the mix, the impact of the remaining bonuses went down
8. Pay it forward
Boost your incentive program’s power by letting employees reward their peers as part of the experience.
In the peer-reviewed paper Prosocial Bonuses Increase Employee Satisfaction and Team Performance, researchers looked at what happens when an employee incentive can be used as a gift to coworkers.
For sales teams, every $10 that an employee spent on themselves led to only $3 back to the company. But when a team member spent $10 on others, the companies brought in $52.
“A minor adjustment to employee bonuses — shifting the focus from the self to others — can produce measurable benefits for employees and organizations,” the paper concluded.
9. Consider group activities
When two software companies got rid of individual commissions for salespeople, they found an interesting result: the whole team worked better towards a common sales goal. And their sales went up.
It’s not that you need to get rid of individual employee incentives entirely, but including team incentives can make everyone more engaged and effective. And the science backs it up. This study in the Journal of Business Research showed that rewarding a team boosted overall cooperation and performance.
These nine employee incentive ideas can give your organization a lot to think about, especially if you’re relying heavily on cash.
To learn more about creating your best possible employee incentive options, see Kazoo’s guide to reward and recognition systems that work:
Kazoo amplifies company culture through its award-winning employee experience platform that delivers engagement, retention, performance management, and improved business metrics. As a dominant force in the HCM market with an industry-leading retention rate, Kazoo partners with more than 400 global organizations to build high-performance cultures and engaged workforces. Founded in 2013, Kazoo continues to revolutionize the employee experience with its platform based on the science of motivation, rewards, and recognition. To request a demo, visit info.kazoohr.com/demo-request.