Incentive Pay

7 Employee Incentive Programs To Implement In Your Business

July 12, 2022
min read

Employee incentive programs are designed to encourage productivity in the workplace by providing employees clear goals to work towards and satisfactory compensation for reaching those goals. Benefits and consistent employee rewards help maintain motivation and let employees achieve their highest potential. 

As an employer thinking of implementing an employee incentive program, it’s important to step into your team’s shoes and view the work environment from an employee’s perspective. 

Not only will you understand how to set appropriate, and achievable, goals by doing this, you’ll have a personalized outlook on what kinds of benefits and rewards will fall in line with the values and desires of your employees.

This article will expand on 7 different incentive programs that you can implement in your own organization!

7 Employee Incentive Programs For Your Organization

1. Profit-Sharing

A profit-sharing plan allows for the extra profits made by the company to be pooled together and shared among employees in the form of a bonus. There’s the option of sending profits directly to the employee or using them to build retirement funds, creating an incentive program that is somewhat similar to a 401(K) plan.

This type of incentive program definitely promotes employee engagement by allowing the team to experience the results of their efforts. Rather than earning compensation for their work in the form of a salary, they are now being rewarded directly from the company’s profit. 

Not only is this a great way to help employees feel more involved in the success of the business, it also promotes strong levels of performance as they’re incentivized to earn their bonuses and consistently build on their achievements. 

Profit-sharing can lead to an improved and collaborative work environment where employees are motivated to push success for the business and can keep each other accountable as they work together to accomplish greater forms of revenue. 

2. Spot Bonuses

Spot bonuses are a more basic form of employee incentives, but that doesn’t mean this program is any less effective. 

In this scenario, employees are provided immediate compensation for completing exceptional work. This strategy rewards employees who go above and beyond while reflecting the opportunity to other team members with the intention of motivating them to achieve similar levels of performance. 

Spot bonuses typically take the form of monetary compensation, but they can also arrive in the form of gifts, vacations or any other reward that your specific team would find valuable and help motivate them to go the extra mile.

Spot bonuses introduce a dynamic in which the value of compensation each employee receives is directly linked to their level of performance. This means that they’re more likely to work towards goals so they can earn their bonus.

However, it’s important to note that this type of employee incentive plan can create a competitive atmosphere and foster resentment between employees if clear communication and support is not provided. 

Related: How To Use Rewards As Incentive Pay

3. Project Bonuses

Project bonuses are a productive means for incentivizing employees to achieve specific goals, like meeting certain deadlines or finishing long-term projects. 

For this form of incentive to be successful, it’s crucial that the employer lays down a clear set of criteria and benchmarks for the employees to aim for. 

Defining expectations and setting your team up for success inspires greater productivity and allows for an organized work environment and smoother interactions between the team.

The main selling point of this incentive plan is that it creates a strong drive to work hard so employees can reach their defined goals and criteria, with the project bonus to look forward to at the end.

This is a great incentive program to implement if your company works with large, long-term projects that can be taxing on the workforce and management. 

Understanding that there's a monetary reward waiting for them helps employees maintain focus and motivation to see the project through to completion. 

Employees working across from each other

4. Travel Incentive Programs

Although many employees are happy with monetary incentives, about 65% of employees enjoy non-monetary incentives since they can have a greater impact on their everyday life. 

A travel incentive program is a great example of a non-monetary reward and involves extending a company-sponsored vacation to high performing employees.

This program is flexible in that the company can plan the vacation and include events like team-building activities, meetings, and workshops. If you work in a collaborative environment, these opportunities will help employees form closer relationships, learn new skills, and break the ice with management (which can be difficult to do in the regular workplace) while continuing to maintain a level of professionalism.

Aside from that, it’s also important to provide employees ample free time to enjoy on their own. This could mean sponsoring a personal vacation for the recipient and allowing them to bring along their partner, family or other loved ones. 

Non-monetary employee incentive programs are effective for nurturing a sense of loyalty among employees. 

It not only acts as a token of appreciation from the company, but is a means to forming closer bonds between employees and the business. This can definitely go a long way in improving the general work environment!

5. Workplace Flexibility

Offering flexible work incentives can be a productive strategy for businesses to retain and attract new talent. This is proven by numerous studies that reflect how the majority of employees would gladly choose workplace flexibility instead of working the same, concrete hours every day. 

This arrangement can benefit the company when considering how absenteeism decreases while employee engagement improves through this method. This is also one of the most budget-friendly incentives too!

Along with that, flexible work incentives are highly desirable when employees are on a job hunt and can be a great strategy for retaining and attracting high levels of talent. 

When talking about how to implement workplace flexibility, one form would include allowing employees to shift around their work hours and create their own schedule. This allows them to work within the means of their individual needs and creates a positive work-life balance when they have the chance to dedicate their time to family, hobbies, personal projects, etc.

Practice fostering a sense of trust through this incentive by providing employees freedom while ensuring that they continue to work the same number of hours as they would in the regular work structure. 

Allowing employees to work remotely is another example of a workplace flexibility incentive. They can have the option to work from home indefinitely and come into the office for meetings, or can split their work week in the office and at home. 

6. Recognition and Acknowledgement

Consistent acknowledgement and recognition for hard work is a simple and effective way to improve employee morale. When an employee feels seen and appreciated for the efforts they make, they’re more likely to trust their company and feel a sense of pride in their performance. 

This positive communication can be conducted verbally in a 1-on-1 chat or through a written letter or email. You can also participate in public forms of recognition and acknowledgment by voicing the recipient’s achievements in meetings, work chat rooms, company newsletters, social media and more.

Remember to consider your employee’s level of comfort and opt for the option that best suits their personality. It can be uncomfortable for an introverted employee to receive acknowledgement publicly and may even have the opposite effect on their morale. You know your team better than anyone else!

Related: A Complete Guide To Employee Appreciation (quotes, activities & ideas)

7. Health and Wellness Programs

Health and wellness employee incentive programs are a great way to communicate your awareness about your team’s wellbeing. Let them know that you care about their mental and physical health through this reward!

This incentive can be conducted in various forms, such as through implementing an on-site gym, bringing fitness or yoga instructors into the office or even providing healthy lunches or standing desks for your team. 

Benefits of Employee Incentive Programs

1. Increases Productivity

When employees have specific goals to work towards and have a means of motivation to complete these projects, it’s reasonable for their level of productivity to increase.

Your team already has the company’s best interests in mind, but introducing benefits and rewards can provide another opportunity for them to go above and beyond to achieve more individually while also reflecting positively on the business as a whole. 

Create a culture of excellence around the workplace with goals for your team to work towards together and watch the company prosper!

2. Promotes Employee Engagement

Employee engagement is a crucial part of every business. When employees are invested in the work they do, their efforts reflect directly onto the company’s level of success. It’s been proven that companies experience greater profits when they’re made up of an engaged workforce. 

Employee engagement is further important with the knowledge that those who are more invested in their work are less likely to make errors or even resign from their positions. 

Consider the fact that 39% of employees are looking to change jobs in the near future to understand how incentives can help avoid turning this into a reality for your company. 

Losing current employees means losing a knowledgeable individual that understands the ins and outs of your company and finding and hiring new talent can be further costly and time-consuming.

By offering employee incentive programs, employers can help stimulate employee engagement and let their team know how appreciative the company is to have them. 

3. Creates A Healthy Work Environment

A healthy workplace dynamic is more important than you may think. An employee’s environment defines the level of motivation they’ll carry long term and can make or break their desire to stay with the company. 

Not just the physical environment, but it’s detrimental for working relationships between the company and employees to be strained or even worse, toxic. 

An unhealthy work dynamic will drain an employee's motivation, lower their level of engagement and eventually lead to their resignation. It’s important to avoid negative factors that can harm the business in the long run.

That’s why consistent employee incentives are crucial! They help promote positive interactions between employees and can even create a sense of camaraderie where everyone feels free to express themselves and help each other out.

Every job and company has its own set of stressors and a healthy work environment can help alleviate further tension during high pressure periods. Co-workers who support each other are definitely able to accomplish more than those who are caught within a strained working environment.

How To Successfully Implement An Employee Incentive Program

1. Have A Clear List Of Criteria

Especially when implementing an incentive program like Spot Bonuses, a clear set of criteria should be mandatory along with transparency in how an employee can receive the bonus. Clear communication will allow these programs to run smoothly and can definitely help avoid workplace conflicts. 

It’s important to define how an employee can be eligible for a reward and continue communicating why and how rewards are received. 

2. Use Incentives That Are Sought After By Employees

While monetary incentives are successful in driving employee engagement, incentives that cater to the values and desires of the employees are proven to have a greater positive impact than the occasional cash bonus. Let your team know that their individual voices are heard and catered for.

Whether it be monetary or non-monetary, it’s the employer’s responsibility to understand their team and know what motivates them so they can offer a successful incentive program.

3. Track Employees’ Progress

You won’t know if the program is a success unless you track your team’s progress and request feedback directly from the recipients. 

Again, clear communication is key especially in the form of consistent interactions and exchange of information and opinions between management and the team. 

You can strengthen relations, retain talent and ensure that your team is being offered the most productive incentive that fits their unique needs.

Employee Incentive Program FAQs

What Can Cause an Employee Incentive Program to Fail?

Incentive programs can fail if the specific details are not communicated properly. They must be well thought out and catered for your team in order to drive the greatest amount of engagement.

How Do You Structure an Employee Incentive Program?

A productive way to structure a program would be to offer different rewards of varying value. 

This will create reward levels with expectations on how to reach each one. Employees will definitely be motivated to reach new heights and accomplish more so they can reach higher levels of rewards!

How Do You Make an Employee Incentive Plan More Successful?

It’s important to keep a consistent record and analyze the results of your company's incentive programs.

You can monitor the progress of the program for a few months and decide whether it’s productive to scrap the current idea and try another incentive.

The program's success will always depend on the employer’s and employee’s level of investment!


Employee incentive programs are invaluable tools for creating a successful and engaged team.

By implementing any of the programs listed above, you’ll definitely experience improved relations among a motivated and content team.

For more information on incentive programs, check out our article on the differences between incentive pay and merit pay.

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