The Definitive 2024 Guide to Employee Incentive Programs - COMPT (2024)

In 2024, achieving a workplace where employees are not just satisfied but also truly engaged and motivated to perform their best lies in well-crafted employee incentive programs, which is a dire need of employees and competitive pay.

According to recent statistics, companies with employee recognition programs leverage multiple benefits—a 12 times greater boost in employee engagement, a 31% lower voluntary turnover rate, and 21% higher profitability.

And, you can achieve it while recognizing your employees’ determination with innovative incentives.

In this guide, we’ll unveil the core of the employee incentive program that will shape your business’ future with skilled people in today’s competitive market.

So, let’s begin!

What are employee incentive programs?

“An incentive is a bullet, a key: an often tiny object with astonishing power to change a situation.” – Steve Lewitt

Steve is right: an employee incentive program encourages employees to achieve their ambitious goals by strategically driving their efficiency with various rewards and growth opportunities. When crafted for the long run, this undoubtedly benefits both your employees and the organization.

Consider this: new hires in your company need a training program to level up their skills, or your hard-working employees expect a satisfactory hike in their salaries. If your employees receive this support timely without begging, it will drive their engagement with 17% more productivity.

In turn, they’ll serve you more than you think, ultimately helping you increase your ROI (Return on Investment).

Types of employee incentive programs (monetary and non-monetary)

There are many simple though sure-shot ways to craft an incentive program and thank your employees with flexible benefits that can be varied and customized according to various industries.

However, today, we discuss more about two heads:

Monetary incentives

Monetary incentives are financial in nature that you can provide to promptly appreciate your employees with cash or its equivalents, which are:

• Salary increment
• Hike on bonus
• Commission based targets
• Referral bonuses
• Recognition rewards through cash
• Profit sharing
• Stock options
• Employee reimbursem*nts
• Extra allowances

Non-monetary incentives

Non-monetary incentives are more about non-cash perks to drive employee engagement and boost their morale, which you can do with:

• Flexible work arrangements
• Experiential rewards
• Additional time off
• Tangible rewards and gifts
• Public recognition
• Courses and training related to professional development
• Multiple fringe benefits

How to choose the right incentive programs for your employees

Choice, Chance, and Change!

Your right choice to design employee incentives and engagement programs can create a chance for positive change, but it may feel like walking through a maze. But to hit your mark, you can follow these steps:

1. Assessing employee needs and preferences

Without considering what your employees want, incentivizing perks for employees can be a waste of time. This is why knowing and prioritizing every employee’s needs or preferences is crucial. You can execute this through one-on-one interaction, conducting surveys, or simply taking feedback from your employees.

Once the preferences and needs of employees are understood, you can tailor your monetary and non-monetary incentives to have the most impact on your workforce. Some employees might value non-monetary incentives like recognition, in which case you can use smart office technologies such as live-updated screens to recognize employee accomplishments and display leaderboards. On the other hand, some employees might value more tangible incentives like bonuses.

Without assessing your employees’ preferences, it will be difficult to ensure that your incentives align with their motivations.

2. Aligning incentives with company goals

Building a reward strategy shouldn’t only target employee satisfaction but also align with your company’s interests, values, and cost per hire. Otherwise, you’ll be on the wrong track to drain money.

Articulating your business objectives may include boosting sales, enhancing customer satisfaction, or accelerating individuals’ productivity. No matter what, they have to be synced with incentive programs.

For example, if increasing sales is your priority, considering perks with commission-based targets can pique the interest of your sales pros and create a win-win situation for both of you.

3. Considering budget constraints

Always consider your budget if you want to create grand incentive ideas or deal with short-sweet approaches. Establishing a loud budget that makes your employees happy and saves your money is more feasible.

For instance, if you’re running a bootstrapped small business and juggling multiple responsibilities, spending money carelessly on a grand celebration to acknowledge everyone’s efforts can lead you to financial shortages.

Therefore, it’s too important to balance what you can afford and what you can genuinely do to retain your employees within that budget.

4. Evaluating program effectiveness

Last but not least, remember that employee incentive programs should not be set in stone that can’t be changed. Rather, you must know how effective they are in reality. So, make an eagle-eyed assessment to determine whether they are good enough to hit your intended goal or need more evaluation.
Knowing the factual truth can make your incentive program more relevant, flexible, and responsive over time, ultimately slashing overhead expenses while fostering a sense of sustainability.

Popular examples of employee incentive programs

“Show me the incentive, and I will show you the outcome.” – Charlie Munger

If you engage your employees with incentive deals to reinforce their profitability, your employees can reiterate Charlie’s words.

Google’s Peer Bonus Program

The first of its kind, Google’s peer bonus program allows its employees to nominate any colleague for spot bonuses with specific rules:

• They can’t nominate their manager,
• managers can’t nominate their subordinates and
• reciprocity or repeated nominations within six months are not allowed.

Nominators provide a brief description of the nominee’s achievements, and managers review each nomination before accepting or rejecting it. If no action is taken within 3-5 days, the system automatically approves the bonuses, but at the same time, any nonsensical nominations are also rejected.

While work-related nominations are ideal, recognition for trivial or nonsensical reasons is not considered for peer-to-peer bonuses, leaving marks for an unbiased acknowledgment.

Zappos’ Wellness Programs

Another exceptional example of an employee incentive program is set by Zappos, which strongly redefines the company culture.

To free its employees from work and give them enough time to relax, Zappos offers multiple benefits. It provides an on-campus fitness center so Zapponians can effectively manage their weight and maintain a healthy lifestyle, remembering to hydrate post-workout. Additionally, they have designed a nap room, so Zapponians can take a quick nap and refresh to return to work.

This holistic approach shows how Zappos prioritizes its employees’ overall well-being, enhancing their productivity and job satisfaction.

Salesforce’s Volunteer Time Off (VTO)

Salesforce is an ideal corporate brand, showcasing the principle of an effective employee recognition program through its commitment to Volunteer Time Off (VTO).

Their employees receive an above-average VTO benefit of 56 hours, or 7 business days, each year for causes they are passionate about. They can utilize this time to pursue higher education, participate in climate justice initiatives, be involved in workplace development, or choose any other suitable cause.

This employee incentive program drives the value of compassion and fosters healthy relationships within the workforce community.

Amazon’s Career Choice Program

Last but not least, Amazon’s Career Choice Program is one of the well-crafted incentive programs attracting 150,000 Amazon employees to participate. As they understand that career choice isn’t meant to be always holding a high school diploma or other higher education certificates, they step into this program to upgrade their employees’ skills and strategize higher retention.

Amazon provides on-campus and virtual offerings that include:

• Pre-paid tuition for several college degrees and certifications
• Various industrial certifications for in-demand roles
• Foundational linguistic courses
• Career coaching and advising programs with their career choice partner, Mr. Kaplan

It simply reflects how Amazon cares for its employees and provides support to keep them engaged and push them to reach goals at any stage of their journey.

Conclusion

Robert Half once said, “Talent does you no good unless it’s recognized by someone else.”

In a world where talents need to be recognized and nurtured as valuable resources for any organization’s success, paying attention to them is truly needed with employee incentive programs.

Now that you understand their benefits and how to craft them, you may need a guide to help you navigate. With Compt, you can do it well, as it helps you create high-value, flexible, and personalized benefits that employees are seeking.

So, why not book a demo with Compt and stand out always?

Written by guest author Joy D’Cruz, a content marketing specialist currently working with SaSHunt.