In today’s global economy, companies are obsessed with becoming more efficient, more productive, more competitive, and their managers spend much of their time and energy trying to find the key to make this miracle possible. If you are also deeply involved in the quest for business excellence, you will be pleased to know that the magic formula that can make it possible has been invented for a long time. Read on and we’ll tell you how you can make your company run like a shot thanks to work incentives.
What are employee incentives?
A work incentive is an attractive reward offered to employees in recognition of good performance. We all like to be patted on the back when we do things well. Work incentives help us to motivate our employees and are an emotional (and/or material) boost that increases performance and job satisfaction. They are, no more and no less, the gasoline that drives the people in our team to achieve the best vision of themselves.
Types of employee incentives
There are many types of work incentives. There are monetary and non-monetary, individual and collective, tangible and intangible… Which are the ones you should adopt in your company to make your workers literally “go off the map”? The only rule to follow when designing a good incentive plan is to make sure that they are consistent with the organizational culture and that they fit the preferences and needs of your team. For the rest, imagination to the power!
1. Monetary incentives
We know: work is much more than a paycheck at the end of the month, and anyone who wakes up in the morning with money as the only motivation to go to work has a problem. But, hey, nobody’s bitter for a sweet. The fact that the economic dimension should not be the only one to be considered in an employment relationship does not mean that it is not important. Monetary rewards are, in fact, one of the oldest and most effective ways to encourage your employees to do their best. One that they will understand perfectly and will be very grateful for.
As for the form they can take, in addition to the classic (and dreamed-of) salary increase, there are other forms of work incentives related to money that can be used to reward good performance. These are some of the main ones:
- Commission. A classic within the commercial teams. This “bonus” is a tasty reward for participation in a successful business transaction. They are usually predefined in advance with a series of percentages on the amount of the sale.
- Bonus. Similar to commissions, although with a wider scope (they can be individual, team or even company-wide), they can be more spontaneous and not necessarily linked to sales. The company may pay a bonus for many reasons. Because the stock market value of the share has risen, because more units have been produced in less time or with fewer resources (productivity bonus) or because the boss gets his wires crossed and decides to reward the commitment or effort of the staff for no specific reason (this happened, for example, in some companies during the pandemic).
- Variables. This is a part of the employee’s salary that is not subject to working time, but depends on a series of individual (and sometimes also collective) results. It is a great way to invite our collaborators to give that “plus” or extra mile of productivity that can place us above our competitors.
2. In-kind incentives
There is another type of employee incentive that also has an economic dimension, although it does not translate into hard cash in the workers’ pockets. Their advantage is that they demonstrate in a much more eloquent (and less “transactional”) way that you care about your employees. Do you want to win the hearts and commitment of your people as well as bring them (and yourself) important tax advantages? Here are a few ideas on how to achieve this through in-kind work incentives.
- Restaurant tickets. The typical meal tickets are an incentive that your employees will be especially grateful for because it solves the daily headache of what to eat and saves them a lot of lugging of lunchboxes between home and the office.
- Nursery. Work-life balance has become a priority issue for workers, especially for young people. An issue that becomes especially complicated when you have young children. Some companies have taken the step of supporting their working moms and dads with on-site childcare services.
- Medical insurance. Health care, both physical and mental, is a fundamental aspect for professionals. A company that cares about the well-being of its employees is a vital, healthy company that is prepared to face any challenge. From classic health insurance, to yoga classes or mindfulness sessions, any effort aimed at taking care of our people’s health will pay us back in spades.
- Point programs. Sometimes companies draw up action plans and reward their employees with points for complying with them. Points can have a different nominal value and can be exchanged for different gifts. This practice is becoming increasingly widespread and adopted by large companies.
3. Non-monetary employee incentives
But since not everything in life is about money, there are many other ways to recognize and reward professional effort that have nothing to do with the vile metal. In fact, in many cases, non-monetary incentives remain longer in employees’ memories and have a multiplier effect on their motivation and commitment. Why? Because they are benefits associated with experiences. And what is life if not a collection of experiences to put in our backpack? These are some of them:
- Teleworking. Various studies confirm that flexibility is, together with salary, the most important factor in determining whether a professional chooses a particular company to work for. To the point that the question they ask their potential employers during the selection interview is not whether or not there is a possibility of teleworking, but “how many days?”
- Days off. Yes, we agree, working is great… But it’s even more great not to do it when we have that possibility. For this reason, employees appreciate it very much when their company rewards their efforts with extra vacation time or makes a gesture (in the form of a day off “for the sake of it”) on their birthday. Don’t forget, moreover, that a multitude of reports have demonstrated the importance of rest on productivity. So, on balance, this type of incentive is not bad for the company either.
- Corporate events. Another way to reward performance and, incidentally, to relax the atmosphere, build teamwork and facilitate interaction among colleagues in a more relaxed environment are company events. Parties, meals, team building days, volunteering sessions… Nothing better to achieve successes together than to celebrate them together.
- Corporate discount platforms. Some companies have special agreements with different brands so that their employees can enjoy the most competitive prices. This is the origin of another type of non-monetary work incentive, the employee discount club, a corporate platform with dozens of special offers from major brands. It is a way to reward and stretch their payroll.
What problems do companies solve by providing incentives to their employees?
Work incentives solve countless problems, they are real vitamins for companies! Specifically, employee incentives have a direct impact on:
- Motivation and commitment of employees, who not only see how their efforts do not go unnoticed by their company, but are recognized and rewarded.
- Individual and team performance. They align business objectives with those of their people and help to build more aligned and cohesive teams.
- Talent attraction and retention, being the “glue” to retain internal qualified personnel and a “magnet” to attract external talent.
- Creativity and a job well done as they drive them to push themselves harder, seek new solutions and overcome their own limits, resulting in a more productive work environment and the achievement of outstanding results.
- The creation of a “fun” environment, which, in turn, fosters a positive work environment in which collaboration and contributions from different team members can flourish.
What are you waiting for to include work incentives in your compensation package?
The best companies stand out for giving their employees work incentives that respond to their preferences and serve to transmit corporate values. At Netflix for example, they rely so much on the power of flextime and work by objectives that no one tracks the hours worked or the number of vacation days taken by employees.
Google believes in healthy eating as a tool to care for the well-being of its employees while increasing their productivity. At their offices, their employees always have free healthy food options nearby, which saves them from commuting and helps them develop good eating habits.
As you can see, it is clear that incentivizing your employees not only addresses present problems, but also serves as a preventative measure for future challenges. In a world where talent retention and employee engagement are crucial issues, the choice and effective implementation of work incentives become a priority for any company. What are you waiting for?
