10 Employee Incentive Ideas That Will Actually Motivate Your Team

Why do your employees do what they do?

It’s not an easy question to answer, sometimes not even for the employees in question. Yet understanding what motivates your employees is the first step to implementing effective employee incentive programs in your organization.

At the most basic level, people tend to divide these factors into two different categories:

• Positive Reinforcement (incentives)
• Negative Reinforcement (disincentives)

The traditional wisdom is that giving your employees the right balance of incentives and disincentives is the key to getting the most from your employees. Stephen R. Covey called this the "carrot and stick” view of human motivation.

An effective employee incentive program sends employees a clear message that your organization understands what truly motivates them to do their best work and is willing to provide it.

At BambooHR, we know that human resources teams are often stretched thin. That's why our intuitive, user-friendly HR software makes it easy to manage payroll, employee records, performance management, and more—all in one centralized system. You'll be able to implement new incentives and see real-time data to know how they're impacting your team. Ready to learn more? Get your free demo today!

10 Employee Incentive Ideas

1. Offer Bonuses

Though hardly a new employee incentive idea, there’s no doubt that bonuses are still a powerful and popular motivational tool. In fact, 65% of US employees prefer bonuses based on personal achievements. Ensuring your bonus criteria is clear, achievable and fair is essential to success.

2. Create Company Merchandise

Other employee incentive programs opt for company merchandise instead of straight cash bonuses. Giving away a comfortable branded t-shirt or a fun mug can provide a daily reminder of your organization’s investment in your employees.

3. Share Meaningful Experiences

Company-sponsored lunches, concert tickets, you name it – experiences can make great incentives for your staff. If you’ve got the budget, they can make a brilliant reward for excellent work. If you’re not sure what to choose, you can always let your staff pick from a selection of experiences for themselves.

4. Give Gifts

Celebrating work anniversaries, achievements and birthdays with gifts and perks is a great way to incentivize longer service and good work. You might not have the budget for the latest tech, but simple branded merch, giving the morning off or a $20 gift card can all make a difference.

5. Prioritize Health and Wellbeing

When it comes to workplace efficiency, you can’t underestimate the impact of poor mental and physical health.

During the Covid-19 pandemic, remote work burnout skyrocketed to 69%. Now, staff are back in the office, it’s even easier to promote health and well-being. Free or subsidised healthy lunches, cycle-to-work schemes and on-site health screenings can all help not only care for your staff on an individual basis but improve workplace efficiency too.

6. Provide Some Perks

You can also give employees the chance to earn perks, such as additional time off. These benefits are more likely to be perceived as rewards as they tie to more motivational concerns. But it’s important to remember that incentives need to supplement these factors of your work, not act as the only source of these experiences.

7. Explore Profit Sharing Options

Profit sharing is a great employee incentive idea, as it not only gives your staff a stake in the company but also encourages better work. This dual benefit of company loyalty and day-to-day motivation can provide excellent long and short-term results. If your business model doesn’t allow for profit sharing, you could always try a different route. Ramping up your 401k contributions to match your employees is a great way to go.

8. Sign Up for Recognition Platforms

If you’re looking to encourage staff to thank one another and highlight great work, then a recognition platform can help. These allow colleagues to post public or private messages to their co-workers to celebrate achievements. Recognition often comes with a points allocation, which can later be traded in for gifts.

9. Strive Toward Team Sales Goals

At BambooHR, we have an interesting approach to sales. Instead of individual sales employees competing for a commission, we have salaried sales employees working together on teams. And while the teams compete with each other, each employee has teammates to collaborate with, providing the opportunity to learn from each other.

10. Offer Tuition Assistance

Promoting a culture of learning and improvement can help your staff to learn and innovate. Better still, if your organization can cover tuition, then your employees will be even more motivated to excel in their field. According to Money.com, paying for your staff’s college tuition and other training opportunities can pay off – participants who entered CIGNA’s tuition assist program were 10% more like to be promoted, and 7% more likely to stay with the company.

» Free Download: 13 Ways to Get Rewards and Recognition Right

How to Incentivize Employees, According to Psychologists

If you’ve followed this blog or attended a BambooHR webinar or two, you’ve likely heard of Herzberg’s two-factor theory.

Psychologist Frederick Herzberg found, in essence, that meeting employees’ basic needs reduces dissatisfaction. Providing certain workplace conditions can reduce dissatisfaction—and once basic needs are met, further incentives can increase satisfaction.

As you might expect, foundational workplace conditions include:

• Appropriate compensation
• Workplace safety
• Benefits

To increase employee satisfaction, a workplace needs to address higher concerns like work-life balance, challenging and purposeful work, and co-worker relationships.

Understanding the difference between satisfaction and dissatisfaction highlights some of the difficulties of developing employee incentive programs that work.

Employee Incentive Example

A BambooHR study found that monetary bonuses were the preferred reward for accomplishments.

Yet adding may compensation reduce dissatisfaction without increasing long-term satisfaction. If employees come to see cash incentives as part of their total compensation package, then instead of feeling satisfaction when they receive an incentive, they’ll feel dissatisfied if they don’t.

That's why relying on cash alone won't always cut it. Make sure you're also building employee recognition programs—they're just as important as handing out monetary rewards, if not more important.

4 Common Mistakes to Avoid

As you consider employee incentive ideas, it’s important to think them through and remove any unintended consequences.

Here are a few to watch out for:

• Perverse Incentives: Avoid situations where strategies for earning a reward go against the benefits of employee incentive programs. An obvious example of this is when sales teams offer an inordinate number of discounts to increase sales numbers and receive more rewards, but the overall performance of the organization is harmed.
• Unhealthy Competition: Your incentive program needs to preserve teamwork in your organization. Rewarding individuals instead of groups may lead to unhealthy behaviors, from passively withholding help to outright sabotage or cheating.
• Rewarding Luck: Earning a reward should be based on actions that are in the employee’s control. If employees feel that their efforts won’t be recognized or rewarded without luck or popularity, it can discourage them from trying.
• Ill-defined Goals: If the goals of your employee incentive programs aren’t tied to objective measurements, then it increases the risk of employees perceiving them as either arbitrary or proof of favoritism toward certain employees or departments.

Next Steps: Launch Your Employee Incentive Program

Employee incentive programs work best when they support your organization’s mission, vision, and values. Encouraging employees to achieve these objectives with targeted incentives can make your workplace a more satisfying place to be.