In a sluggish economy, sourcers, recruiters, HR professionals, managers, and executives need every tool available to attract, retain, and engage the best talent. Employee incentives are a powerful tool at our disposal!
Job satisfaction is declining. More than half of Americans are unhappy at work. Turnover rates are high and so is the cost to replace employees. Leading companies and organizations have also recognized how valuable employee incentives are for motivating and driving performance. Organizations with higher than average employee engagement have: 27% higher profits, 50% higher sales, 50% higher customer loyalty, and 38% above average productivity, which translates to higher profits, according to the Workplace Research Foundation.
A great example of this is Zappos. Employee incentives are an integral part of Zappos culture and they have been recognized by Fortune magazine as one of the “100 Best Companies to Work For.” Employee incentives include access to free lunches and vending machines. There’s also a game room and a nap room. “Providing an environment that promotes employee happiness is a top priority. If you have happy employees, all other things fall in line,” says Hollie Delaney, the company’s Senior Human Resources Manager.
It is imperative that companies ask and listen to what matters most to prospective and current employees. This information must then be turned into tangible, meaningful, and sustainable incentives and benefits. The most effective incentive programs focus on convenience, relevance and affordability. For example, having a monthly potluck where employees bring a dish.
By using creative, simple, cost-effective incentives, companies and organizations will see improvement in the areas of employee engagement, morale, recruitment, and retention. Different things will work better, depending on the company culture. It’s also good to note that for many employees, recognition is often more important than a cash amount or prize. But make no mistake about it, offering employee incentives isn’t just a nice thing to do, it’s great for business long-term. One large company that recognized the correlation between employee incentives and bottom line results was Sears, Roebuck & Co., where every 5% increase in the employee attitude score, increased customer satisfaction by 1-3%, as well as revenue by 0.5%.
Employee incentive programs can help support company safety, wellness, retention, productivity, sales goals and campaigns. Some companies structure their incentive programs in a variety of ways, such as the ones below.
- Peer Recognition: In this “culture of recognition,” coworkers give each other praise or rewards for good work.
- Spot Rewards: Employees are handed rewards instantly, or “on the spot,” when they show strong performance.
- Contests: Teams or individuals compete to win a reward. This is popular in sales environments.
- Points Programs: Employees collect points over time for meeting various goals. Points can be redeemed instantly or saved.
- One-Time Rewards: This is incentives at their most straightforward: meet the goal, and earn the reward. This structure is ideal for launching new products and policies.
Employee incentive programs can also be tailored. For example, production workers at steel processor and plastics manufacturer, Worthington Industries in Columbus, OH, enjoy $2 haircuts on company time. Employees of Wilton Connor Packaging Inc. in Charlotte, NC receive handyman services free of charge, while the cost of parts are deducted from their paychecks over several months. “Employees who work in a culture of recognition are five times more likely to feel valued than those who do not,” says Bob Nelson, PH.D., the best-selling author of 1001 Ways to Reward Employees.
Employers who fail to engage their employees end up paying a high price down the road. Turnover and training costs can be up to 2.5 times an employee’s salary, according to the National Association for the Self-Employed. Companies that want to remain competitive in recruiting and retaining top talent should adopt, maintain and develop employee incentive programs. Employees who work in a culture where they feel engaged, recognized and rewarded, have a harder time leaving.
Meet our Author!
By Anthony Anderson | Anthony Anderson is a Rochester native. He studied Political Science at Bethune-Cookman College & Alabama State University. He has also studied abroad in London & Amsterdam concentrating on public policy, international affairs and diplomacy. Anthony has built a diverse background in recruiting, operations and public relations. Anthony has established an extensive network of business contacts over the years and is recognized as a trusted partner in the field of recruitment. Anthony is a member of SHRM (Society for Human Resource Management) and has sourced and recruited top talent for companies such as Xerox, Disney, Allstate, JP Morgan Chase and the State of New York including the Governor’s Office. Anthony enjoys running cross-country and loves Alabama football. Anthony is currently the Senior Sourcing Specialist for Sutherland’s healthcare, Insurance and Mortgage lines of business.