By Julie Feece
Incentive programs have a simple, but potentially significant purpose for small business owners: Motivate employees to peak performance. Depending on how a program is structured, employees can be encouraged to take actions and devise strategies that boost productivity, strengthen a sense of “we’re all in this together,” and reap a multitude of other benefits for businesses of all sizes.
Incentive programs work, as illustrated by these impressive statistics:
- More than 50 percent of U.S. businesses support incentive programs.
- More than $100 billion is spent annually on various employee incentive programs.
- The range and breadth of incentive programs have “more than doubled” in recent years.
If you’re a manager considering an incentive program to promote greater commitment and results, here are some key benefits to keep in mind:
Productivity can take a big leap forward. Whether incentive program rewards take the shape of additional paid vacation days, individualized gift cards, a coveted parking space for a month, etc., employees who wish to benefit from the program enthusiastically participate in achieving designated work targets or reaching agreed-upon milestones. They understand this is good for their employers, but they appreciate the extra motivating elements. Everyone likes to be rewarded for his or her efforts.
Working together assumes new meaning. If your objective is strengthening a sense of collaboration, choose from a variety of rewards to get employees working together toward a common goal. When tailoring your reward, says blogger Brooke Chaplan, “base your decisions on their interests.” Many people, for example, enjoy “having a pizza party at a bowling alley,” because informal events like these “enable each employee to relax and bond with each other.” A strong sense of teamwork emerges from such get-togethers.
Get some friendly competition going. Like everyone else, employees are usually up for a little friendly competition. Entrepreneur Ziv Eliraz advocates this approach if, for example, you want to boost the number of employee referrals in your organization. It’s a great way for “getting people to talk about referrals and start a buzz amongst your office,” Eliraz notes. Such collegial competition can be equally effective when aimed at other strategic targets.
You’ll likely see a reduction in turnover. How does an employee incentive program contribute to an overall reduction in business operational expenses? Employees motivated to take part in an incentive program are less likely to be absent from work or — perhaps most importantly — feel the need to look for employment elsewhere. Retention is a nagging concern for virtually all employers, and any factor that improves the numbers of employees who stay with a business is worth strongly considering. Just think of the money saved in costly recruiting and training efforts.
Employees feel valued and appreciated. In the same respect, businesses prosper when their workforce feels loyal and committed to organizational goals. When an employer goes to the trouble of designing an incentive program based on a clear understanding of what employees want, this demonstrates appreciation for the work these employees do every day.
“Anyone who shows improvement, solves a problem, or exceeds a target is justifiably proud of what they have accomplished,” notes business author Kevin Daum. “They want to know that you are proud, too, and that you appreciate their effort.” Recognition and rewards confirm the fact that “they are valued on the team.”
Employee loyalty grows out of such arrangements, which feed into the other benefits mentioned above. Productivity. Decreased absenteeism. A sense of collaboration and a desire to stay with the company. What business doesn’t want to see these trends in the workplace?
Julie Feece is Vice President North America – Marketing for RPG Card Services, a sales and marketing organization specializing in offering gift card program services to nationally recognized retailers for B2B and B2C programs. She has held leadership roles in the incentive gift card industry for over 17 years and has been with RPG Card Services for the past 10 years. @