What Are the 4 Types of Incentives?
There is no doubt that a happy employee will deliver better work and productivity. They will also spread their positivity to others in the workforce. It all begins with employee incentives from upper management. Employee incentives are rewards of appreciation for good performance. The goal employers try to achieve with their employees is productivity.
Incentives are the best thing a company can do for their workers because disgruntled employees deliver poor work and bad attitudes when they do not feel appreciated. These are four incentives companies can implement to show they care about their employees: compensation incentives, recognition incentives, reward incentives, and appreciation incentives.
Compensation Incentives
There are different ways to utilize compensation incentives. Some are through bonuses; others are through stock options and profit-sharing schemes.
Bonuses are excellent ideas. Some come yearly, usually Christmas bonuses, while others come quarterly. The more the company produces, the higher the bonus. It is a great way to push an employee to the extreme without being aggressive. The employee will put it upon themselves to strive to do better.
Stock options and profit-sharing schemes are almost the same, but not quite. Both are primarily used for retirement plans, but some companies may use them as annual bonuses. Stock options go on the stock market, and if they fall, the money is lost, not gained. Profit sharing is when the employer puts a tax-deferred payment toward the employee’s retirement plan. The money is not lost unless the employee invests the money in the stock market. Those accounts will fluctuate.
Another way to compensate an employee deals with a one-on-one road map to lay out for the employee. Offer them a direction or goals to achieve that will offer them raises or promotions. So many employees do not have this, and it always leaves them wondering if they will ever get a raise or promotion. This way, the employer lays out the foundation of what is expected. From there, it is up to the employee to push their way along that road map of success.
Recognition Incentives
Everyone enjoys their “15 minutes of fame,” right? Nothing delivers better than recognition from an employer who puts their employee in the spotlight. This type of recognition costs nothing. It only comes from the heart and goes further than most people realize. They are personal and direct. Let’s break it down into four different parts.
Customer Shout-Outs to the Employee:
Employees can deliver excellent customer service, and the customers and the employer should acknowledge them. The business owner should encourage customers to give positive feedback about the employee’s efforts. It delivers a significant and long-lasting customer service experience.
Write a Letter:
A simple email is sufficient to show appreciation. But what if the boss handwrites a letter? That spells appreciation with each letter of the word. The letter does not have to be long and drawn out, but something simple. It will not only touch the heart of the employee, but it will leave a lasting memory that shows the company cares.
An Employee Spotlight:
Getting a meeting with the workers and acknowledging an employee’s efforts will lift a person’s spirits to make them want to do more for the company. It makes them feel like they are part of a family. If you seek something formal for the employees as a group, make it into a special event. It will acknowledge everyone for their efforts and point out the good qualities in each individual. This can happen over lunch or at an in-house party.
Acknowledgment from Co-Workers: Encourage all workers to show appreciation whenever something good happens to an employee. When an employee succeeds in the company, it is a happy moment for the employee, but their success is the company’s success. It is a team effort, and co-workers should acknowledge one another for those successful moments. It will keep a close-knit community of workers who feel like family.
Reward Incentives
This is the old-fashioned way of showing appreciation, but it will always work for every company and employee. Set quotas monthly, quarterly, or yearly (at management’s discretion). If the employee or employees reach the quota set at the beginning of the term, they are rewarded.
There are different rewards that a company can offer its employees. They can have gift cards, material gifts (watches, pens, and other office supplies), bonuses, lunch, cookouts, and different ways to reward their most valuable assets.
Some companies use points to set up purchases at a company gift shop or online store. Some reward points can come through attendance records, safety, work performance, positivity, and other ways to promote good vibes and business success. Once the points build up, they can purchase what they want online or in the company store. It gives a goal for employees to achieve as it rewards them for their efforts.
Appreciation Incentives
These are ways an employer can show appreciation to their workers for being there for the company. They can throw company parties for holidays or appreciation. They can also do birthday celebrations on the employee’s birthday. Sometimes they will give a choice to the workers what they want to do. There could be options like getting off early on a Friday, having a team lunch, cookout, party, or taking a vote on something fun that brings unity to the group.
If the company automatically has a Christmas party, try throwing another party mid-year that shows appreciation to the workers. It will give everyone time to get to know one another outside of work and bring closer relationships. The work environment afterward will be spectacular because of the appreciation.
Contact Incentives Marketplace for All Motivational Ideas
If your company wants to do something special for the employees, and you don’t know what to do, contact us at Incentives Marketplace to get started on the surprise options for your team of workers. We have helped companies for over 21 years and are ready to assist you.