By using employee incentive programs, you reward your employees for the work they do. The harder they work, the larger their incentive, so your employees see a direct correlation between their dedication and their compensation.
Rewards and recognition have never been more popular, and there's a reason. Incentives are the secret to engaged employees. Get the all the essentials here.
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Employee incentive programs motivate workers to meet goals and encourages peak performance. According to a 2006 Harvard Business School study,
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Employee incentives are meant to coax employees into joining or staying with a company. Visit HowStuffWorks to learn all about employee incentives.
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The success of your business partly depends on the productivity and happiness of your employees. When they work hard, your company can produce more products and finish jobs in less time. When your employees are happy, they provide better customer service and take interest in the business. Implementing employee incentive programs is one method of encouraging this type of environment. Positive reinforcement through rewards and recognition can be highly motivating. However, while these programs may seem like a win-win for you and your employees, they can actually be counterproductive in some cases. Understanding the potential consequences as well as the benefits will help you create an effective plan with your human resources department.
According to the Incentive Performance Center, over 80 percent of organizations present awards to employees as incentives for them to work harder. There are many benefits to honoring employees in this way. One of the main benefits of employee incentive programs is that they demonstrate to employees that managers are paying attention to them. There are a host of other benefits, as well.
Boosts Employee Morale
One of the easiest ways to motivate employees to work harder is to recognize them for their good work. Incentive programs, which can be monitored through human resources, are the best way to encourage productivity. These awards put employees in a positive state mentally, which enhances the level of confidence they have when performing their jobs. Incentives also foster a sense of appreciation in employees. Employees who receive incentives appreciate their jobs more, and they appreciate the opportunity to show you what they can bring to your organization.
Incentives motivate employees to work together, especially if they are working toward a common goal. Employees who want to do a good job are more likely to ask for help when they have an incentive to do so. They are also more likely to ask colleagues and management to review their work.
Improves Work Quality
Employees who receive incentives tend to be more detail oriented and meticulous when performing their jobs. They are unlikely to rush through their work as quickly as possible with the sole purpose of getting it done. Incentives motivate employees to take more pride in their work and its quality.
Enhances Employee Commitment
Employees need to feel appreciated, and many times, employers and managers get so caught up in the daily tasks of running their organizations that they fail to recognize good employees. It is not uncommon for employees to leave a job because they feel invisible. Incentive awards let employees know they are visible and their work is being recognized. This can renew or enhance the level of commitment employees have to your organization.
Employee incentive programs have a lot of benefits, but there are some factors that business owners should consider before implementing such programs at their places of business.
It is not uncommon for employees to become jealous of coworkers who are being recognized for their good performance. Incentive plans motivate employees to excel, and most workers want to be recognized to some degree. When an individual who works hard feels that the company’s owners and managers do not notice him, he may begin to resent the employees who are recognized by management.
Individuals who receive incentives may feel increased pressure to perform at a high level. Coworkers, supervisors and bosses tend to have higher expectations of those who have been recognized for their great work. This can cause stress on your employees, which can interfere with their ability to do their jobs.
After a while, incentive programs fail to excite employees, because most business owners and managers tend to give the same types of gifts repeatedly. If your employees already know what they are going to receive, their drive and excitement about your incentive program could drastically diminish. Also, most gifts that managers choose do not reflect an employee’s personality, which makes the gifts impersonal. Incentive programs tend to start off strong, but they can become uninteresting and boring after a while.
While incentive programs are motivational, there is no guarantee that the individuals who receive incentive awards will continue to work hard. Many employees feel that creating a workplace that is positive for everyone is much better than singling out certain individuals and giving them gifts. Also, many business owners feel that a decent wage and good benefits are enough to keep employees satisfied. Job satisfaction and the opportunity to grow is what most employees want, and most workers do not care about receiving gifts.
In a 2004 study, the Corporate Leadership Council found that only 11 percent of workers are truly committed to their employers. Employee incentive programs are a successful and cost-efficient way for human resources departments to boost employee loyalty and company morale. While incentives can run the gamut from free to costly, the return on investment (ROI) is almost always worth the effort.
Noncash incentives, such as naming an employee of the week, recognize top-performing employees with no out-of-pocket expense to the company. Employee recognition, along with other free employee incentive programs, strongly motivates employees to be the best, which can only improve the company and its bottom line. Because this type of incentive is free, it has the best ROI.
The costs of other incentives vary by the type of reward offered. They can range from a small bonus check for a job well done to more extravagant rewards, such as vacations and shopping sprees. Cash incentives are frequently offered as prizes for the employees with the best performance over a given time period. According to Loyaltyworks, a company specializing in incentive programs, 54 percent of a company’s incentive budget will go toward merchandise (e.g. TVs), 25 percent will go toward travel, and 21 percent will go toward recognition items (e.g. plaques).
Motivating your employees and showing appreciation for their hard work can go a long way in creating a positive and productive business environment. Employee incentive programs are a cost-efficient means of doing this. You may find that the expense generates more profits than you would make otherwise, as the quality of your products and customer service can increase when employees are rewarded for their efforts. This success is not guaranteed, as you may encounter personalities that do not respond well to incentive programs, especially those that promote competition. However, considering these factors ahead of time can help you choose a program that fosters teamwork and suitably rewards employees.
The bottom line for most businesses depends on customer satisfaction in most cases. As a business owner or manager, it is important to consider exactly how you are planning on satisfying those customers' needs. It is, of course, through the dedication and hard work of your employees. After all, it is those workers who take care of the customers, make your company's products, and goes the extra mile when necessary. Running a successful business requires the presence of a happy staff. In order to keep your staff happy, you may want to consider implementing some employee incentive programs. These programs are a perfect way to motivating greater effort from your staff.
The types of employee incentive programs you choose to use can vary greatly. Some companies choose to start out small and have in store contests such as rewarding the employee with the most sales in a week or month, or counting the number of positive feedback customer cards a specific employee receives. There are incentive programs that offer small tokens of appreciation like a favorite parking space or free lunch, as well as those that offer tremendous rewards like vacations and bonus pay.
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