HR

How to Design Effective Employee Incentive Schemes

Business Advice | 13 May 2022 | 2 years ago

employee incentive schemes

Employee incentive schemes are becoming an increasingly popular way to reward staff for a job well done. They can be used to motivate employees, improve teamwork, and increase productivity. But with so many different types of incentive schemes available, it can be difficult to know which one is right for your business.

In this article, we will discuss the different factors you need to consider when designing an employee incentive scheme, including what your staff want, how to track employee performance and the different types of incentives you can offer.

What are Employee Incentive Schemes?

An employee incentive scheme is a system where employees are given rewards for achieving certain goals or reaching certain targets. These schemes can be used to encourage staff to work harder, improve their skills or simply show loyalty to the company.

Why Use Employee Incentive Schemes?

There are many benefits of using employee incentive schemes, including:

  • Improved employee productivity
  • Increased staff morale
  • Improved teamwork
  • Greater loyalty from employees
All of these will not only keep your employees happy, but they will also benefit your business as a whole because a happy workforce is a productive one.

employee performance

 

What to Consider When Designing an Employee Incentive Scheme

When designing an employee incentive scheme, there are a few key factors you need to consider:

1. Identifying What your Staff Want

The first step is to find out what your employees would actually value as an incentive. Do they value monetary bonuses? Extra holiday days? Or are they more interested in social events and gifts? Asking your employees directly is the best way to find out, but you can also do anonymous surveys so that they are not shy about telling you.

2. Total Budget

The next thing to consider is how much you are willing to spend on the scheme. Incentives don’t have to be expensive, but if you want to offer something significant, you need to make sure you have the budget to do so. It is important that you get the balance right between what you can afford and what your employees would actually value and that you don’t offer something so extravagant that they become too focused on the prize.

3. The Aims of the Scheme

Before you start designing the scheme, you need to sit down and think about what exactly you want to achieve with it. Do you want to improve employee productivity? Encourage teamwork? Recognize loyalty? Once you have identified the aims of the scheme, it will make it easier to design something that meets those goals.

4. How Success is Defined

In order for an employee incentive scheme to be successful, you need to have a way of measuring it. This could be through sales targets, performance reviews or simply how many people take part in the scheme. By setting clear goals from the start, you will be able to track the effectiveness of the scheme and make changes if necessary.

5. How to Track Employee Performance

If you want to offer incentives that are based on employee performance, you need to have a system in place for tracking it. This could be something as simple as a points system or a leaderboard or through performance tracking software such as Salesforce.

By tracking employee performance, you will be able to see who is meeting their targets and who isn’t, which will help you to decide who should receive the incentives.

6. How to Prevent Resentment

One of the dangers of employee incentive schemes is that they can create resentment among employees who feel like they are not being recognized for their efforts. To prevent this, you need to make sure that the scheme is fair and that everyone has an equal chance of achieving the incentives.

You also need to communicate with your employees so that they understand how the scheme works and why they may not have been successful in achieving the incentives this time around.

Which Qualities or Performance Aspects Should You Reward?

There are a number of different qualities and performance aspects that you can choose to reward with an employee incentive scheme, including:

Good Teamwork and Selflessness

One of the most important qualities in any employee is the ability to work well as part of a team. By rewarding employees who are team players, you will encourage others to work together for the good of the company. You can also choose to reward employees who show a selfless attitude, such as those who regularly go above and beyond for their colleagues or customers or who take on extra responsibility.

Loyalty to the Company

Another quality that is worth rewarding is loyalty to the company. This could be employees who have been with the company for a long time or those who regularly go above and beyond to help out. Rewarding loyalty will also encourage others to stay with the company for longer which will enable you to build a strong and stable workforce.

Progression in Job Role

If you have employees who are constantly striving to improve their skills and progress in their job role, then it is important to show them that you recognise and value their efforts. One way to do this is by offering incentives for those who complete training courses or achieve certain milestones in their career. This will not only show your appreciation for their hard work but will also motivate them to continue developing their skills.

Project Completion

Another way to measure employee performance is through project completion. If you have employees who are regularly meeting deadlines and completing projects to a high standard, then it is important to show your appreciation for their hard work. You can do this by offering bonuses or other incentives for those who complete projects on time and to a high standard. This can be particularly important for employees who are working on long-term projects who may feel like their efforts are not being recognised. You can also break the project up into milestones and reward employees for each stage that they complete.

Sales or Performance Targets

If you have employees who are responsible for bringing in new business or hitting sales targets, then it is important to show your appreciation for their efforts. You can do this by offering bonuses or other incentives for those who meet or exceed their targets. This will show them how much you appreciate their hard work and will also motivate them to continue achieving high levels of sales or performance.

employee motivation

Types of Incentives

When it comes to employee incentives, there are a number of different options that you can choose from, including:

Monetary Bonuses

One of the most popular types of employee incentives is a monetary bonus. This could be a one-off payment for hitting a target or achieving a milestone or it could be given on a regular basis such as a monthly bonus or a salary increase. This is an effective way to show your appreciation for your employees’ hard work and will also motivate them to continue performing at a high level. The important thing is that your employees feel valued and that they are being rewarded for their efforts.

Employee Benefits

Another popular type of employee incentive is employee benefits. This could include things like private healthcare, shares in the company or an improved pension plan. This is an effective way to show your employees that you value their wellbeing and that you are willing to invest in them. It is also a good way to motivate them to stay with the company for longer as they will feel like they are being looked after.

Social Events

Another way to show your appreciation for your employees’ hard work is to organise regular social events as a way to reward hard work and also to give them the opportunity to let off some steam. This could be a team-building day, a boozy lunch paid for by the company or an office night out. This is not only a great way to reward employees but also to build team morale and improve employee relations. The important thing is to ask your employees what they would like to do so you can ensure that everyone has a great time.

Promotion or Job Progression

If you have employees who are looking to progress in their careers, then offering incentives for those who achieve certain milestones or targets can be a great way to show your appreciation for their efforts. This could include things like job shadowing, mentoring or even a promotion. This is an effective way to show your employees that you are committed to their development and that you value their contribution to the company.

Extra Training

A major part of career progression is extra training and development. Offering to financially support employees’ further education and professional qualifications is a great way to reward hard work and show them that you want to keep them at your company long-term. This may also involve giving them a day off a week to study or go to college which is another excellent way to show your support.

Gifts

Another popular way to show your appreciation for your employees’ hard work is to give them gifts. This could be anything from a voucher for a free massage or a day at the spa to a luxury hamper or a bottle of champagne. This is an effective way to show your employees that you are thinking of them and that you appreciate their hard work. It is also a good way to show your appreciation for those who have been with the company for a long time or who have achieved a significant milestone in their career.

Memberships and Services

Memberships and enrolment in services are other popular incentives for employees. This could include things like a gym membership, a season ticket to their favourite football team or a subscription to their favourite magazine. This will provide an ongoing source of motivation for your employees that will show them you are invested in their wellbeing. It is also a great way to show your employees that you are willing to invest in their interests and that you value their input.

Free Transport

If your employees have to commute to work, then providing free transport can be a great way to show your appreciation for their efforts. This may mean paying for a train pass, charging their oyster card at the start of every month or even providing a company car. Transport can be very expensive so this is a great way to show your employees that you are willing to help with the costs. It will also motivate them to get to work on time and not take too many days off.

Extra Holiday Days

One of the most popular employee incentives is extra holiday days. Even people who love their jobs need some time off now and again, so rewarding high performing employees with extra holiday days is a great way to show your appreciation for their efforts. If you really want to go above and beyond, you can even pay for them to take a trip or contribute to the cost of their holiday.

Work From Home Days

Another great way to show your appreciation for your employees’ hard work is to offer them the opportunity to work from home. This is an excellent way to show trust in your employees and it will also give them extra time to spend with their families because they won’t need to commute. It is important to remember that not everyone will want to take advantage of this so make sure you offer it as an optional extra.

Happy employees

Final Thoughts

As you can see, there are a number of different ways to show your appreciation for your employees’ hard work. Effective employee incentive schemes show employees that their hard work is recognised and valued and that they are an important part of the company. By offering these incentives you can show your employees that you are committed to their well-being and that you value their input. Follow the tips in this article and start planning your employee incentive scheme today!

Topic

HR

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