I came across an article by Mario Churchill the other day and I wanted to expand upon some of the benefits of incentive programs that the author discussed. There are two types of benefits that employee incentive programs have-tangible and intangible. Employee incentives can be integrated into any business model to achieve a plethora of goals. When they are well planned and carefully aligned to the organization's overall business strategy, a successful employee award program can have a huge impact on a company’s bottom line and on motivation.
According to a study by the International Society of Performance Improvement, employee incentive programs aimed at individuals increase performance an average of 22% and team incentives can increase as much as 44%. The same study found that incentive programs can increase employee interest at work. For example, when incentive programs are first offered for completing a task, a 15% increase in performance occurs. When asked to continue toward a goal, people increased their performance by 27%. In an environment where employees are fairly compensated and have the necessary training and resources to perform their jobs, the right incentive program can motivate ordinary people to do extraordinary things.
Tangible benefits of employee incentive programs include: increases in sales, performance, profits and productivity and decreases in accident rates and absenteeism. I recommend to clients that want to start an incentive program to have the duration last at least 6 months. As early adopters of the program redeem points for gifts, excitement about the program will help to generate more participation and increase the effectiveness of the program.
Employee incentive programs also have benefits that are difficult to measure but can make a huge difference on a workplace. These include, but are not limited to: increases in employee morale, loyalty, customer service ratings, communication, recruiting and maintaining talent, teamwork and employee motivation. When employees feel appreciated and understanding the direct correlation between their behaviors and the incentives they receive, they will go the extra mile for their employer. Although these benefits are hard to quantify, they can truly help shape an organization and provide a key competitive advantage.
There are many benefits for employee incentive programs, as seen above, but what does this mean for the average employer? An employee award program’s goals should be aligned with the organization's overall business strategy. In other words, if a company fills a niche in the market then awarding innovative ideas and outstanding effort would benefit them the most. An organization that is in a highly competitive market would benefit from an award program that focuses on stabilizing employee retention and rewards ideas that lead to overall cost reduction.
Over time, as the goals of the company change and in an effort to keep employee incentive programs relevant, new program goals can be introduced. This will allow employee incentive programs to be flexible and also keep participants interested and involved. No matter the size of the organization, the facts are clear-a properly designed and implemented incentive program can lead to many benefits.
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