Employee incentive plans can include specific benefits like health insurance or rewards for certain behaviors like increasing sales. Non-cash benefits like gym memberships can inspire loyalty and productivity. Cash bonuses and gift certificates are common but may not have lasting power. Travel incentives and branded merchandise can better remind employees of their incentives. Companies should track and adjust their plans over time.
Employee incentive plans can be classified in a number of ways. These can be specific incentives offered to all hired employees, such as health insurance benefits, flexible scheduling, health savings plans, access to cafeterias or gym memberships. Alternatively, an incentive may be offered to reward employees for certain types of behavior such as maintaining a safe work environment, working for a specific period for a company or increasing sales. These plans could include cash bonuses, gift certificates, travel plans, or gifts of branded or non-branded items. Theoretically, salary, especially one that includes a commission payment, is also an incentive to stay at work and remain productive.
There is some argument that employee incentive plans should include non-cash benefits that all workers could get, such as health insurance. Such benefits may or may not prove to be an incentive. When they are superlatives and are unlikely to be found in other companies, employees can see them as a special privilege of their current work environment and be more loyal and productive. For example, Google employees on the company’s main site have access to a gym and cafeteria, and this isn’t as common in the workplace. It can inspire loyalty to the company and a sense of happiness in working for a company that seems to care about the needs of the employees.
Many companies don’t extend that far, but they still use a variety of employee incentive plans to encourage workers. One way to incentivize work is to offer cash bonuses when employees have been especially productive or at the end of the year based on affordability and company profits. There are some critics of this system because money has no “lasting power” and is likely to be spent and forgotten. Similarly, many gift certificates may not remind the employee in the future that they are incentives because they can be quickly redeemed for services or merchandise. However, gift certificates or points that allow people to choose an item from a catalog of merchandise are some of the more popular employee incentive plans.
Things that might better remind the employee that they received an incentive include things like travel employee incentive plans, where a person will be able to have a memorable trip. Travel incentives are common in the retail industries. Less expensive is any type of merchandise branded with the company logo, such as T-shirts, key chains, and nameplates that award the employee a certain level of service.
When companies are developing employee incentive plans, they need to consider how well these plans will be received and should track how, over time, the plans work to meet employer goals. For example, if an auto sales firm has salespeople who are unlikely to earn incentives, the company should determine whether the incentives are not worth achieving or if the goal for achieving them is too high. Companies should be willing to adjust employee incentive plans over time as they gather insights into how they operate.
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