10 Employee Incentive Ideas that Work & Boost Team Morale

Most employees think it's important for employers to reward employees for good work. That’s reasonable to assume. However, industry poll results uncovered that only one in four employees felt their company truly rewards great work. That’s a significant gap.

Incentive plans for employees—spoiler alert: it’s not just cash—are an excellent way to tackle this recognition-and-rewards imbalance and boost morale. Read on to learn why employee incentive plans and programs are important and check what the 10 best are.

What are Employee Incentive Programs?

When you think of employee incentive ideas, handing out bonuses is probably the first thing that comes to mind. But there are many strategies you can implement to keep your team's morale high beyond monetary rewards. Designing these strategies is what employee incentive ideas are all about.

HR teams must align individual efforts with the organization's goals, when developing work incentives ideas. Keep reading to get to know 10 different ideas you can use to achieve this.

Why Is Employee Morale Important?

As we’ve said, by prioritizing employee morale, companies can create a win-win situation. Employee incentive ideas translate into several benefits for your company. Here’s how:

• Profitability: A study found that companies with strong incentive programs see a 21% higher profitability rate.
• Employee retention: Low morale can lead to employees calling in sick more often—and “phoning their work in”—and disengaging from their work, ultimately resulting in higher turnover rates.
• Innovation and creativity: When employees feel valued and supported, they're more likely to take risks, propose new ideas, and contribute to the company's growth.

Since the pandemic, remote and hybrid work has increased exponentially. This rise came along with a big challenge for HR teams, as these work modalities tend to generate a feeling of isolation and miscommunication between employees and the company culture. Therefore, investing in effective employee incentive programs is now more important in this context.

10 Employee Incentive Ideas to Engage and Retain Your Team

Well, now that we understand how beneficial employee incentive programs can be for your company. Let’s explore different employee incentive ideas beyond old-school financial rewards.

You’ll probably already be familiar with bonuses and commissions, so we won’t present them in detail among the incentives for employees. Also, consider that these strategies, while very efficient in the short term, might clash with long-term company objectives. For instance, the constant pressure to meet these short-term goals can lead to employee burnout and make them prioritize quantity over quality, making them feel less motivated to explore new ideas that could benefit other than team members and the company in the long run.

1. Flexible Working and Home Office Allowance

Now that most of us have tasted the charms of working from home, offering the possibility of home office days or a hybrid working schedule can be a good incentive for employees. Moreover, a report shows that 75% of employees rank workplace flexibility as their top benefit and that 85% of businesses report increased productivity after implementing flexible work policies.

2. Professional Development Opportunities

Work is, in general, not only a thing we do to earn a living, but also something people do to feel fulfilled. Research found that 70% of employees said that their job defines their sense of purpose. Yes—that's a big deal. And HR teams can help employees find their purpose at work and live it. Training, conferences, workshops, or certifications are viable options.

3. Profit Sharing

Implementing profit sharing is a very effective way to align the employees’ interests with those of the company. The idea is simple: employees receive a share of the profits based on their contribution to the company's success.  Profit-sharing policies include contributions to retirement funds, RSUs, and direct payments. Stock options that work as RSUs are good for employee retention because they start vesting in a given period. Employees won’t want to miss out on those assets,

4. Employee Recognition Programs

We’re hard-wired to strive for each other’s approval. So, what could be more effective than group recognition among employee incentive ideas to keep us motivated and perform better?

A simple “thank you” can have much more impact than you think. On top of this, you can consider signing up to recognition platforms. These invite coworkers to celebrate each other's accomplishments by posting private or public messages between them.

5. Wellness Initiatives

Offering things like on-site fitness classes, healthy snacks, or support for mental health shows the company cares for its employees’ well-being. It also helps lower stress, keeps the team healthier, and shows you're committed to a good work-life balance. Including it among your employee incentive ideas shows you understand there’s a life to be had aside from the laptop!

6. Paid Volunteer Leave

Among employee incentive ideas, allowing employees to participate in volunteering activities within the company not only encourages social responsibility, but also increases engagement with company values. Employees will be walking the talk of your company’s mission and vision—and they’ll feel good about it. Participating in construction work, for example, is also a great teamwork activity.

7. Offsite Meetings

Organize offsite meetings, team after-office parties, game nights, or social events outside work. This builds connections and creates funny memories. If you have a drink with someone from work, you're more likely to get along with them and, eventually, even become friends. You'll probably have less trouble getting up for work—even if you had too many margaritas—if you get along with your coworkers. Now, be respectful if an employee is tired and doesn’t want to attend the event. That’s just as important as organizing the meet-up.

8. Extra Paid Leave

Rewarding employees with additional vacation days or personal time off is also one of the best employee incentive ideas. This allows them to have personal life, to relax, recharge, and avoid burnout. The United States is one of the few developed countries without mandated paid leave. Many European countries with generous paid leave policies have higher worker productivity.

9. Free or Subsidized Meals

Providing free or subsidized meals is a small benefit with a positive impact on daily satisfaction. Most employees don't live close enough to work to return home for lunch, and paying for daily meals can be very expensive. Some companies even offer meals to make sure their employees stay at the office and don’t run errands.

10. Family Care and Childcare Assistance

Competitive family leave and childcare benefits are becoming increasingly important to working parents and popular among companies’ employee incentive ideas. Offering these programs can help you attract and retain top talent in a competitive job market, as many job seekers seriously consider family leave policies and employee benefits when evaluating a job offer.

Best Practices for an Effective Employee Incentive Program

You must take a strategic approach in order to develop employee incentive ideas that are actually effective. Here are a few good practices to think about when implementing incentives for employees:

• Target the right behaviors: Don't reward everything. Identify the specific behaviors and accomplishments you want to encourage and design your program accordingly, offering unique rewards.
• Variety is key:  Not all employees are motivated by the same things.  Offer a variety of incentives to deal with different preferences.
• Measurable results: Track the effectiveness of your program.  Are you seeing the desired results in terms of employee performance and engagement?

5 Common Mistakes to Avoid

Poorly designed employee incentive ideas can backfire, leading to frustration, disengagement, and even a decline in productivity. Try to avoid these incidents:

• Focusing only on short-term goals
• Establishing unclear goals and criteria
• Setting unrealistic expectations
• Ignoring employee feedback
• Being inconsistent with how you carry out your program

The Best Way to Implement Team Incentive Ideas

Whenever you carry out an incentive program, you should monitor metrics to understand the before and after—and not just in revenue. You should also measure how an off-site meeting impacted performance and satisfaction levels.

An all-around HRIS software like TalentHR can help HR professionals run employee satisfaction surveys. Recruiters can also reward top performers to keep them satisfied with their work (and the recognition and incentives they’re getting). With reports on those who are struggling, you can set performance goals to turn deficiencies into skills. If you think about each employee incentive as a milestone, you can see how it helps boost morale. Register now for free.

To learn more about how you can make the most out of your employee incentives, visit TalentHR.