Employee Incentive Program Starter Guide: Learn the Basics

When you want to keep your employees engaged and motivated with an employee incentive program, 15Five can help you track it. You can try 15Five for 14 days with a free trial account.

When employees feel that they have value and that management appreciates them, production tends to be better. Incentivized employees tend to be more willing to stay with the company rather than constantly job hopping. There are multiple subscription software packages you can choose from to streamline and simplify the incentivization process.

The 5 Best Software Packages for Employee Incentive Programs

Through employee engagement software, you, as a business owner or as a human resources manager, can give employees a voice. These software packages deliver surveys and information that help management determine which incentives are most important for employees. Our list of the best employee engagement software packages can help you begin your research.

What Are Employee Incentive Programs?

Screenshot of 15five's employee incentives high fives feature dashboard.
15Five has an easy-to-use, beginner-friendly user interface.

Employee incentive programs are ideas the company implements to give employees a chance to earn extra benefits. These benefits go beyond the salary and other parts of their employment packages, like health insurance, paid vacation, and paid sick days.

Benefits that are part of an employee incentive program can include tangible benefits, such as extra days off or gift certificates. They also can include things like recognizing an employee of the week or positively reinforcing certain actions at work. For example, 15Five offers digital “high fives” that teammates can give and receive to highlight excellent work and attitude.

Rather than focusing on the accomplishments of an individual, some employee incentives can reward a department or the entire company. If the team hits its sales goal for the quarter, perhaps management can pay for a catered lunch. Such incentives can involve fun activities, too, like a casual dress workday or an employee night out at the local ballpark.

Do Employee Incentive Programs Actually Work?

According to McKinsey & Company, incentive programs, especially financial incentives, have both short-term and long-term benefits. 

In the short term, such incentives lead to rapid employee performance improvements. This can be helpful when the company is implementing a new area of focus or when a major transformation is occurring.

In the long term, employees tend to feel valued when participating in incentive programs. When they receive monetary rewards through the incentive program, they tend to job hunt less often. Companies have an easier time retaining top employees with a combination of competitive employment benefits and incentive programs.

Some of the overall benefits of either individual- or team-based employee incentive plans include:

  • Greater productivity and level of motivation
  • Higher morale
  • Higher level of engagement with team members
  • Higher level of holding each other accountable
  • Better results in meeting deadlines and hitting goals
  • Greater sense of loyalty to the company and the team

Incentives for employees as part of these programs should be different from providing office perks for your employees. Office perks can involve consistent things like free coffee or donuts on Fridays, regardless of company performance. Incentive programs should be special benefits that show extra appreciation for a job well done.

Deciding Whether to Start an Employee Incentive Program

Screenshot from 15Five showing the "create a new objective" screen and various functions to create an objective.
15Five lets you lay out specific, actionable objectives and track status as you go.

If you start an incentive program, it’s important to take it seriously. Management needs to be on board with the program so it receives the funding and attention required to make it work as intended. If the program isn’t receiving support from management, employees will figure it out pretty quickly, and they won’t take it seriously.

Consider the budget you want to deploy to the program. Does the company want to try a one-time expenditure to fund a short-term program? Or are you ready to devote an annual budget to a long-term employee incentive program?

Think about what you want to accomplish with the program. Will the employee incentive program involve meeting long-term goals as something designed to be permanent? Does your business need special incentives during busy times, such as at the end of the fiscal year, to hit goals? Or do you need something in between?

You then can begin setting goals for what you want to accomplish through the employee incentive program. Software like 15Five provides the ability to track objectives that the company has. Have department heads and administrators create a list of goals in 15Five they want to accomplish. Through the list, you then can find some objectives that would fit well within an employee incentive plan.

Take a Survey of Employees

Screenshot from 15Five describing survey features to solicit feedback from employees and those within the organization.
You can send anonymous surveys to get honest feedback from your employees.

Once you decide to begin using an employee incentive program, it’s time to check in with the employees themselves. Employees need to have a say in how the program expects to operate and what the incentives will be.

Part of the reason to begin this type of program is to show employees that the company values them. If company executives put a program in place that has no employee input involved, employees may not receive it well. They may not want to participate if the incentives aren’t of value to them or if they don’t see the importance of the goals.

One of the best ways to find out what kinds of incentives employees would appreciate is through an online survey. One of the strengths of 15Five is how it lets employers create quick surveys and feedback requests for a variety of items. You can use these surveys to learn about items that employees would find important in an incentive program.

Some of the incentive program details about which you can ask your employees for their opinions include:

  • Types of reward-based incentives: Some employees may prefer financial incentives, which would include gift cards. Others may prefer to receive experiences, such as a special catered lunch or a company golf outing at a private club where the boss is a member. It’s important that the employees have a say in the tangible incentives.
  • Types of recognition-based incentives: Recognition incentives can be helpful for encouraging friendly competition among team members. They also can boost morale. Through the survey, you may find that employees prefer digital high fives and points that they can award to each other versus a company outing outside of working hours.
  • Options for continuous programs: Through a survey, you may find that employees like the idea of having a continuous incentive program in place. They may appreciate daily contests or weekly goals that keep them motivated. Others may prefer targeted incentive programs at certain times of the fiscal year when the company needs a boost in performance.

Understand that chances are extremely low that you will receive 100% consensus from the employees. You may find it helpful to narrow the number of choices you give employees within each topic. By having three to five options in the survey, you’re more likely to at least have a majority select one of them versus having 10 to 12 choices and spreading out the answers.

You also could offer multiple incentives if you believe your employees won’t be able to come to a consensus. Perhaps in a large company, one department can work toward one type of incentive while another department has another incentive in mind.

How to Implement an Employee Incentive Program

Screenshot from 15Five showing different filter function.
Easily review answers and compare various types of answered questions from your survey to identify patterns and needs.

When you are almost ready to implement the incentive program for employees, you may want to hold a meeting with representatives from a few different departments. Go over the proposed incentive plan and ask for feedback. You don’t need to have full agreement from everyone at the meeting, but you can receive a general idea about whether the plan needs any tweaking.

After any final adjustments, it’s finally time to introduce the incentive program to employees. If this is a completely new program, you may want to have a big production and buildup, so employees can become excited about the program. You’ll want to put some thought into the introduction, as employee buy-in is important for success in this type of program.

When a new employee comes on board and has a chance to participate in the employee incentive plan, you probably don’t want to have a big production for each new hire. However, if you want to receive the highest level of buy-in from new employees, an explanation of the incentive program should occur as part of the employee onboarding process.

Explain the Program in Detail

Employees need to be able to fully understand the program. Incentive programs like this likely will bring out a high level of competitiveness from some of your employees. They will want to be able to track their progress toward earning incentives. 

The program should be easy to understand. You may want to provide easily accessible documentation that gives employees the ability to calculate their progress. Having detailed explanations of the incentive program also should prevent disagreements and disputes down the road.

Ultimately, everything should be as above board and as clear as possible in setting up the incentive program. You never want employees to feel like the company is hiding something or trying to trick them into working more for an unattainable incentive. Transparency is key.

Allow Employees to Track Their Progress

Screenshot of 15Five compare group function showing example participant data.
15Five lets individual employees track their progress toward various incentives.

As part of introducing as much transparency into the incentive program as possible, consider allowing employees to track their progress through software. You may be able to track progress toward incentives through employee engagement software or through human resources software. 

Not only does giving employees the opportunity to track the progress toward reaching incentives make the program transparent, but it also sparks competition. When employees can see their progress and the progress of their team members, many of them will use these numbers as motivation.

With the ability to track the incentive program through software, employees should never have a question about the deadlines for a short-term program, either. 

Some companies may prefer to post results for the program on a community bulletin board or on a whiteboard in the breakroom to make sure everyone sees it. This may work better for tracking progress toward a team-oriented goal. Placing a notice in the breakroom can encourage employees to talk about the program and brainstorm ideas about how to try to reach the team-based incentives.

You may even want to create a poster in the breakroom that allows employees to mark off progress toward the goal to receive the incentive. Marking daily progress can be a fun activity that encourages team building.

Celebrate Successes in the Incentive Program

When implementing an employee incentive program, the ultimate goal is to encourage employees – and to allow the company – to have more success. When the team or individual employees reach their objectives, it’s important to celebrate this accomplishment.

Holding celebrations of successes can encourage other employees to work toward meeting the goals for the next incentive period. Recognizing successes also shows the employees that the program is real and that it is possible to reach the incentives.

Seeing co-workers receive their incentives or being part of a team that reaches its goals can be a source of pride. Celebrating this accomplishment shows appreciation from management for the hard work of the employees.

Administrators may want to present employees with extra incentives, such as a gift card or another type of prize, in front of the entire company or department. It’s also possible to shoot videos and photos of a company outing that a team earned by hitting its goals. Then post those images to the company’s internal website, so everyone can see the team enjoying the benefits of the incentive program.

Plan Ahead For Discouraging Results

Of course, it is possible that your employee incentive plan does not quite work as intended, and the team doesn’t reach the required objectives. Avoid the temptation to simplify the program in mid-stream or to change the goals to let employees “win” the incentive. The incentives and goals that are part of the program should be challenging, after all.

If you believe the goals were too difficult to obtain in this incentive cycle, you can adjust them for the next cycle to give employees and teams a better chance of hitting them. Just don’t change the rules in the middle of a program, or employees may expect the company to make things easier every time. The program then loses some of its effectiveness.

Final Thoughts About Employee Incentive Programs

It’s an old saying, but it remains true in today’s evolving workplace: Your company is only as strong as its employees. Once you have good employees working for you, keeping them engaged and happy with employee incentive programs is a smart idea. 

Managing and implementing your employee incentive program is easier when using employee engagement software. These software packages not only track the incentives for you, but they also help you query your employees about incentives they would like to have available. 

When your employees feel like they have a voice in the incentive program, they’re more likely to appreciate the incentives they’re receiving. It all leads to more productive employees.

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