Why Use Incentives and Bonuses

Beyond Incentives and Bonuses

Two of our previous blogs, The Psychology of Incentives and Bonuses: The Downsides, discuss the not-so-positive aspects of incentive programs and bonuses. In fact, it might be time to step back and reconsider your employee bonus program. But, before you are too alarmed and scrap the entire bonus program, evaluate your options. Maybe the best option is to revise your current practices and offer alternatives.

Possible Revisions:

· While you may not be able to give 10% raises across the board, evaluate what you can do. The cost of turnover is high and the loss of top talent even more costly. If a little higher raise than you originally intended increases retention, it will cost you less in the end.
· Yes, employees want a fair wage, benefits, and the opportunity for rewards, but they also want to know how their responsibilities support the company mission and overall goals. Recognize performance, and goals reached. Provide timely feedback; a thank you, whether monetary or otherwise, that comes months after the fact loses its punch.
· If you choose to incorporate bonus program, keep it open to everyone, clearly communicate specific objectives and a well-defined process for both earning “points” and how the amount of a reward will be determined. Avoid a system that is too subjective.

Alternatives:

There is more than one way to reward employees who are reliable, innovative, and focused, exhibiting a strong work ethic and completing their tasks correctly and on time. Employees who contribute both to company goals and an upbeat company culture.

Begin with words:

Begin with words of affirmation, recognition, and thank you’s –verbal and handwritten. Don’t hesitate to give public acknowledgment of exceptional work. It’s easy, low cost, and simple, but oh-so-vital to employee engagement. According to Engagement Stats by Lori McKnight (February 17, 2017):

· 69% of employees say they would work harder if they felt their efforts were better recognized.
· Praise from a leader amplifies the positive impact:
· The more recognition programs you have, the better your results. 67% of company’s who offer multiple programs discovered that when the number of programs reached four, the perceived effect on employee engagement, motivation and satisfaction grew considerably.
· Employees want feedback…the good, bad and ugly. 60% of survey respondents would like daily – or at least weekly – feedback. (The number increased to 72% for those under thirty. Even though 75% felt that feedback is valuable, only 30% receive it.

Add small, and sometimes substantial gifts to in the moment awards. From an individual award to someone who went above and beyond to an entire team, or an entire shift, giving a reward in prompt response to exceptional service is much more effective than an end-of-the-year general bonus, based on profits. Don’t forget the front desk – the face of your business – that person who sets the tone for public opinion or the behind the scenes guy/gal who keeps everything running smoothly.

Offer additional benefits:

Of course, health care is an essential and 401Ks, or other retirement options are often expected, but there are many possibilities for perks and benefits. In fact, according to 2018 Employee Benefits and Perks, Statistics posted by Brandon Carter (Feb 20, 2018); 80% of employees who were extremely satisfied with their benefits also gave high rankings to their job satisfaction, and 65% of employees who were highly satisfied with their benefits said their over-all morale was equally high. Different things matter to different employees. Some companies find success in offering options and letting each employee choose which one – or more – fit their style. Possibilities include:

· Increasing telecommuting options
· Flexible shift times. 42% of adults said they’d jump ship for a flexible work option (Yoh)
· Financial help with continued education
· Opportunities to attend conferences or participate in webinars – surveys reveal that businesses with strong learning cultures have 30-50% higher retention.
· Time off with pay to participate in charitable activities for community organizations – It not only says I care about you, it says I care about our community.
· Extra PTO
· On-site childcare, work-out facilities, cafeterias with healthy choices, etc.
· Mentoring programs – 94% of workers who participate in a mentoring program say that the opportunity demonstrates the company’s commitment to their employees.
· Host company-wide events that include their partners/families – caring about the whole person and their life beyond work makes an impact.

In the end, the principle that connects incentive programs, bonuses, and alternatives and results in success is the personal aspect. When owners, management, and leaders actively care about their employees, through recognition, gratitude, reward, and equity, employees respond with loyalty. If you want your employees to engage in their work, support the company mission, and connect to each other in a congenial culture, it’s up to you to lead the way.

If you’re looking to hire new employees but don’t know where to start, contact Award Staffing. We will be able to help you find the right employees for your unique business needs. If you’re searching for more tips and trick on how to improve your company’s workforce, check out our hiring solutions blog.

 

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