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What is an incentive? Rewards or recognition offered in exchange for work performance.
What makes incentives do well?
To be successful they must:
Promote or encourage specific actions
By a specific audience
To produce measurable outcomes
Through integrated motivational strategies
During a defined time period.
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How popular are they?
Incentives help engage employees, and engaged employees enhance your bottom line. So yes, incentives are an indirect route to bottom-line results. And no, you shouldn't let the indirect-ness of their link to the bottom line discourage you.
Burned out post-slump employees are poised to jump, but organizations need their talent, knowledge and experience to emerge from the recession. Incentives can help.
Without factoring in the recession. Source
This is knowledge, reputation and human talent.
It's amazing how many places there are for employee incentives. Some are massive and obvious, others are unexpected and easy to miss. It's good to know your options before you map out a plan.
Wellness programs are popular because health care costs have ballooned more than 40% in the last 5 years, and they're able to reduce costs as much as $225 per employee. Plus, wellness programs often improve employee morale. Negative incentives, such as charging higher health insurance premiums for not participating, aren't effective. But positive rewards can increase wellness program participation from 26% to 90%.
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Safety programs are designed to motivate employees to focus on being safer at their workplace, in all sorts of ways: by developing defensive driving habits, taking frequent breaks, choosing ergonomics, and more. A properly designed safety incentive program not only rewards safe work, but also promotes proactive behavior such as making safety suggestions to others, identifying hazards and participating in safety committees.
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The Gallup Organization has found that in productive and engaged workplaces, employees receive recognition every seven days. Peer recognition programs are a simple, powerful way to improve working relationships, employee engagement and retention. Peer recognition can work all sorts of ways: employees can show appreciation one-on-one or in public, using paper notes or e-cards, bulletin boards or social media.
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The longer the duration of an employee reward or recognition program, the greater the chance that employees get your message and make positive changes.
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Make sure the answer to all these questions is YES before you launch an employee reward or recognition program. Otherwise, this may not be the right response to the situation. Source
There are 4 basic human drivers, and incentives are able to tap into all of them.
Tangible Incentives: are vivid and full of sensory-rich specifics, so they're stored in the emotional right side of the brain and "pulled up" often in anticipation.
Researchers have shown it's physically more likely for the brain to access a real image from the right brain.
Cash Incentives: are abstract numbers, not a clear image, so they're stored in the left, logical side of the brain and accessed less frequently and in less detail. Source
People weigh an incentive's value against how hard it is to earn. Ask too much, and people will dismiss your incentive. Choose rewards that inherently have higher value, and you can inspire higher performance. Keep in mind that indulgences, especially those that don't have to be justified, are more valuable. So are things that attract peer attention and stand out from regular pay. Source
What do all these incentives (or rewards) have in common? They go beyond praise and are things you can see or do. Some require a sizable budget; some don't need any at all.
Gift cards are the number one incentive, and a whopping 62% of companies offer them to employees. They may seem the same as cash, but they're actually quite different.
Some of the best recognition methods start with "I," the first letter of the word intangible. This is a nice little memory aid, as intangibility is also what separates employee recognition from rewards.
Interesting Work: At least part of your work should be of great interest. Even people with inherently boring jobs become more productive when given at least one stimulating task or project.
Information: Employees crave knowledge about how they are doing and how the company is doing. Start telling them, and soon they'll be turning out the lights when they leave a room.
Involvement: The people who are closest to a situation have the best insight on how to improve it, yet are rarely asked for it. Their involvement enhances commitment and eases implementation of changes.
Independence: All employees appreciate flexibility in their job, and it contributes to more desirable performance. Provide assignments in a way that tells what needs to be done without dictating exactly how to do it.
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Increased Visibility: For some workers, getting company visibility is highly rewarding. Copy a letter of praise, acknowledge their work at a meeting, or hang photos on a "wall of fame" to motivate them.
Employee incentives are used to support safety, wellness, years of service, productivity, sales, recognition and more. They can be structured in a variety of ways.
Peer Recognition In this "culture of recognition" equals give each other praise or rewards for good work.
Spot Rewards Employees get handed rewards instantly, or "on the spot" when they show strong performance.
Contests Teams or individuals compete to win a reward. Popular for highly competitive salespeople.
Points Programs Employees collect points over time for meeting various goals. Points can be redeemed instantly or saved up.
One-Time Rewards Incentives at their most straightforward: Meet the goal, earn the reward. This structure is ideal for launching new products and policies.
The number of online incentive programs has almost doubled in size every year. And nearly every traditional incentive company offers their clients an online component for employee programs. Why the increase?
Online incentive programs save money and time while allowing organizations to have much greater control. Source
1 in 10 incentive planners uses mobile device apps to enhance onsite experience or show program results. Source
There are 4.6 billion mobile users globally, and 1.7 billion Internet users. Source
Nearly 50% of all U.S. online consumers are now advanced users of smartphones, social networks, and other emerging tools. Source
First things first: what is it? Gamification is adding one or more standard game elements into something that's not a game.
Sound familiar? These are the 4 basic human drivers you saw earlier. Games are designed to tap into our innate motivations to collect, defend, connect, and explore. Source
Gamification focuses on short-term results, rewarding and encouraging basic, measurable behaviors. This makes it a great tool for encouraging participation in an existing employee incentive program, but not a substitute for elements that foster long-term change and big-picture thinking.
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Points: Do something, get a point. Or the opposite: Don't do something, lose a point. This is one of the major foundations of gamification systems, and most other elements start here.
Achievements: These are similar to points, but they're specific, super-sized and given for performing tasks or reaching goals outside of the straightforward point system.
Broadcasting: Nothing motivates like an audience or a competition, right? Adding a social element to an activity is a great motivator, whether you're challenging others or celebrating accomplishments.
Bragging Rights: This is what you get when you put all the other elements together. Badges, stickers, medals, and leader boards are used to classify points and achievements, and check your standing against others. Source
The Golden Banana Award is one of Hewlett-Packard's most prestigious honors for inventive employees. It began when a company engineer burst into his manager's office with the answer to a problem they'd been struggling with for weeks. The manager searched his office for a way to mark this accomplishment, but all he came up with was a leftover banana from lunch. Still, he handed over the banana and said "Well done! Congratulations!"
At AT&T Universal Card Services in Jacksonville, Florida, paper is the key element for World of Thanks, one of their most popular programs. The program helps create a culture of recognition and higher performance in a simple way: anyone in the company can write a message of thanks to someone else and send it. To make it official, employees use a sheet from a globe-shaped pad of colored paper. In four years, employees at AT&T have written more than 130,000 thank you notes. Source
There are 180 different employee recognition programs at Walt Disney World in Orlando, Florida. One of the most coveted is the Spirit of Fred Award. It's named for Fred, who advanced from an hourly to salary position by exemplifying the values necessary for success at Disney: friendly, resourceful, enthusiastic and dependable. Fred makes each award (a certificate mounted on a plaque) as well as The Lifetime Fred Award, a bronze statuette of Mickey Mouse given to multiple recipients of the Spirit of Fred Award.
Producers Assistance Corporation provides contract personnel to the oil and gas industry, an area where employee safety is critical. To refresh their safety program, they chose reloadable gift cards as an incentive. Here's how it works: when an employee takes an action, like attending a safety meeting, points are loaded onto their card. The lure of point collecting (and spending) has focused employees back on doing the right thing? to be safe. After a 6-month trial, participation had more than doubled and there was a significant decline in the incident rate. Source
During the merger of two pharmaceutical giants, a task force was charged with making the transition a smooth one. Members worked nonstop over six months, planning how to blend operations of the two companies. The team was rewarded for its sacrifices with gift cards that were, literally, the gift of time. The personalized cards were hand-delivered with a letter from the project leader, and gave recipients their choice of services: housecleaning, lawn care, carpet cleaning, pest control, and more. Source