employee incentive programs

Discover the best employee incentive programs

Employee incentive programs are one of the most widely used tools for productivity improvement. That is their ultimate goal, achieved by increasing employee motivation and commitment to their task in particular and also to the company in a broader sense. In this article, we are going to discuss what employee incentive programs are all about.


What is the best incentive plan for employees?

Improving motivation and work commitment in a consistent way over time is an ambitious but indispensable challenge that every company has to face and that has to come from concrete actions. In general, these actions are designed by those responsible for the HR department, which is in charge of managing the “human capital” within an organization.

What are employee incentive programs?

One of the most important actions within this corporate policy is the development of staff incentive programs. Employee incentives are part of the general context of rewards received by an employee, which are usually of a monetary nature. They are also part of the scope of flexible compensation, emotional pay, or social benefits available to the company. In other words, employee incentive programs may not be strictly economic and still be very effective. 

In short, no incentive program for employees is a substitute for their basic working conditions, but rather an improvement that benefits both the employee and the company. 

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Is an incentive for the employee the same as a reward?

Applying the classical theories of human learning to the business world, reinforcement is a reward that is administered to the worker after the execution of a behavior or the achievement of specific objectives. Its purpose is to increase the probability that these results will occur again. 

A work incentive, on the other hand, is administered prior to the attainment of these achievements. Its purpose is not so much to reward appropriate behavior or good performance, but to stimulate it when it has not yet occurred so that it will occur in the future. For this reason, staff incentive programs should be understood as a foretaste of future rewards. 

employee incentive programs

What types of staff incentive programs are there?

As mentioned above, some employee incentive programs are purely economic (salary advances, bonuses, etc.), others are not economic but of material nature (gifts, trips, checks to be redeemed for service in the employee’s free time). 

Thirdly, we cannot forget another large group of staff incentive programs, directly related to emotional pay, and increasingly valued by workers: extra vacation days or the ability to be flexible in their work schedule are the most typical examples of this third type.  

These advances can be made suddenly. However, to make them more efficient, it is better to implement real employee incentive programs, in a structured and planned manner. 

It is a matter of designing a strategy in which everyone involved knows in advance which specific incentives are likely to be received in relation to specific results. In addition, employee incentive programs must allow a proper evaluation of their results in order to make any necessary adjustments.

Why should you have employee incentive programs?

As we have already established, employee incentive programs are primarily aimed at increasing company members’ motivation and their attachment to the company, conveying to them the idea that the company cares and, above all, is concerned about their well-being. One of the final messages to transmit to those who are already part of the company and those who might join the team in the future is that the company is a good place to work. 

Therefore, employee incentive programs are not mere tokens of courtesy, token rewards, or prizes based on a purely ethical component (good behavior deserves to be rewarded or, in this case, incentivized, i.e. promoted or “rewarded in advance”). 

Benefits of staff incentive programs

On the contrary, its nature is purely instrumental: good results deserve to be incentivized because this increases the likelihood that they will occur and, moreover, that they will be replicated in the future, either by the same employees who have achieved them now or by others. We’ve outlined the benefits of implementing staff incentive programs:

  • Staff incentive programs motivate employees and also increases their engagement towards their work, leading to higher motivation levels and ultimately having a positive impact on productivity and the company’s overall results.
  • These programs also lead to talent retention and a low turnover rate. If a workforce has incentives such as flexible hours and remote work, they are more likely to stay than in a company where they are not offered these perks. Therefore, employee loyalty to the company increases.
  • Benefits of employee incentive programs also include brand reputation and a useful tool in the inbound recruiting strategy implemented by the HR department. We must not forget that advertising the advantages of working for a compan attracts the best workers.
  • Incentive programs also help employees reach their objectives. If an employee knows there are incentives if a goal is reached, this will motivate them to do better in order to reach their aim, and ofcourse, the company’s.

What makes a good employee incentive program?

An incentive program to motivate employees has to be flexible and adaptable to the different profiles present in the team because not just any reward is equally powerful or meaningful for any person. 

To optimize this adaptability, the most useful thing to do is not to make it over-complicated, but to ask employees what incentives would be meaningful to them, which will be very valuable information to design the final program. 

This way, we increase the likelihood of targeting the employees’ true reward focuses. In addition, we encourage employee participation and influence, increase knowledge about them, and can act more efficiently in administering rewards. 

employee incentive programs

It is also important that your company’s employee incentive programs do not generate a bad environment but, on the contrary, that it contributes to improving the company’s internal and external reputation by creating a good working environment among colleagues. 

How to design employee incentive programs

1. Be clear about what we are incentivizing and how we intend to do it

It is a matter of carefully designing what we are going to apply: what the incentive involves, what its real terms are, what it commits to. Let’s not forget that the employee incentive program has to be easily assessable in its main terms.

2. Think of the consequences

We must consider what effect the work incentive programs may have on the employee in question and on the rest of the workforce. However, if we have previously had good communication with the employees, we will hardly make mistakes at this point. 

3. Propose a consistent employee incentive program

It is necessary to think about the extent to which an incentive such as the one to be provided is appropriate: it should not be too much or too little. It is also necessary to think about whether this measure can be generalized to other members of the workforce or whether it is sustainable over time. It is often better to be a little less generous but for a longer period of time or with more people than to make a huge compensation deployment (of rewards and incentives) that will generate a precedent that cannot be maintained in the future. 

Emotional well-being program for companies

At ifeel, we know that work should not disrupt people’s well-being. That is why our team of psychologists, experts in well-being at work, has created an emotional well-being program for companies that improves talent retention, reduces absenteeism, and combats employee stress. 

In our Resources section, you will find useful material, such as podcasts, HR guides, or interviews with HR managers. In addition, we have a Psychosocial Risk Factors Template, which you can use to comply with the requirements of the Labor Inspection.  

Thanks to our emotional well-being program, your company’s HR managers can receive personalized, data-driven advice on how to improve the psychological well-being of their teams. In addition, this program offers employees a 360° mental health care service structured at different levels according to their needs. Try our program today to see how it could help you.

We hope you found this post about the employee incentive programs interesting. If you would like more information about our emotional well-being program for companies, simply request it and we will contact your team as soon as possible.


What are the key benefits of implementing employee incentive programs?

Employee incentive programs can boost morale, enhance employee engagement, and improve overall productivity. They also foster a positive work culture, increase employee satisfaction, and help retain top talent.

What types of incentives are commonly included in effective employee incentive programs?

Effective employee incentive programs often include a variety of incentives, such as performance-based bonuses, recognition programs, professional development opportunities, flexible work arrangements, and mental well-being solutions for employees.

How can an employee incentive program contribute to a company’s bottom line?

By recognizing and rewarding exceptional performance, employee incentive programs motivate employees to strive for excellence, leading to increased productivity and improved business outcomes. Additionally, they can reduce turnover costs by boosting employee satisfaction and loyalty.

What factors should be considered when designing an employee incentive program?

When designing an employee incentive program, it’s important to consider factors like the company’s goals and values, employee preferences, budgetary constraints, and the specific metrics or behaviors that will be rewarded. A well-designed program should be fair, transparent, and aligned with the organization’s overall strategy.

How can an employer measure the success and effectiveness of an employee incentive program?

Employers can measure the success of an employee incentive program by tracking key performance indicators (KPIs) such as employee engagement, productivity levels, retention rates, and overall satisfaction surveys. Regular feedback from employees and ongoing evaluation can help identify areas for improvement and ensure the program’s effectiveness.

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