employee incentives
Jul 19, 2023

Employee Incentives

Keeping your employees happy, motivated and engaged is tough for any great manager, but employee incentives could be your key to a happier, high-performing workforce. Offering incentives to your employees can help improve overall job satisfaction, reduce turnover, and increase job performance and sales. A thriving employee incentives program can also help you build a strong company culture full of people who work hard and help one another.

Ready to learn more? Look into BHN’s massive selection of employee rewards and incentives. Our gift cards and prepaid cards aren’t just for improving customer loyalty—they can also be one of the best ways to supercharge employee loyalty and engagement. We have all the tools you need to manage employee incentives, loyalty rewards, referral incentives, sales team incentives, and more.

What are employee incentives?

An employee incentive is any type of prize or compensation offered to employees in exchange for hitting a goal or performing certain desirable actions. This incentive can come in many different forms, like cash, rewards, extra vacation days, special team meals, or others, both monetary and non-monetary. The important part is that this incentive needs to be separate from, and in addition to, employees’ normal compensation.

What are employee incentive programs?

Developing employee incentives into a coherent employee incentive program simply means identifying your business goals and systematically using employee incentives to achieve them. For example, employee incentives can be awarded for meeting certain goals, like increasing sales numbers in a quarter or shipping a product under an aggressive deadline. Employee incentives can also be awarded for other goals, like improving safety standards, referring friends for hiring, or even participating in healthy activity challenges. Whatever your goals are for your workforce, a system of goals and incentives assembled into a single employee incentive program could be key to motivating your team.

Why are employee incentives important?

Everyone loves to be recognized. When you have an organized, systemic way to recognize great work or focus efforts on a single goal, that gives employees a very clear way to achieve high performance and get recognized for those efforts. Employee retention is now a global struggle, as companies everywhere compete to attract and hold onto talented people. For many employees, one reason they’re thinking about moving on from a company is feeling as if their work is meaningless and their efforts aren’t recognized.

The benefits of employee incentives

The benefits of an employee incentive program include better employee performance, lower turnover, and a healthier company culture. Identifying goals and offering clear incentives is a great motivator for employees to do things like increase sales calls or crunch toward a high pressure deadline. Whatever your business goals are, a highly motivated, engaged workforce is an essential step to getting there.

Employee incentives can be a key component of building a welcoming, collaborative company culture. Many employees report wanting a warm working environment full of mutual support and teamwork. That culture doesn’t appear from nowhere, and it won’t pop up overnight. Giving employees a clear way to work together, thank each other, and celebrate special efforts is a great first step toward building the company culture that attracts and retains great people.

What incentives do employees want?

Anything could be a great incentive for employees, but the key is: it has to be something they really want and can use. It can be hard to find something flexible enough to be universal—a prize that everyone wants and doesn’t leave anyone out.


Compensation is the most obvious prize for any employee. After all, every employee is working in order to be paid. Offering increased compensation is universally popular, but it can also be expensive. Plus, offering simple compensation can make the reward get lost in the daily grind of budgeting and spending. A special reward can feel less special to people if they end up using it to pay part of a utility bill, for example.

Recognition and awards

Offering recognition and awards to employees can be extremely motivating. A public awards ceremony where a winning employee or team is recognized in front of their peers is a prize many people will really fight for in the workplace. Some employees, however, won’t be interested in the attention that comes with this prize. Worse, recognition and awards, by definition, leave a large chunk of your employees unrecognized and without any payoff for their hard work. Use awards cautiously: they may be extremely motivating in the moment, but their effect may not stick around over the long-term.

Digital rewards

A digital reward is an electronic code or eGift that can be redeemed for spending power with popular brands and retailers online. Digital rewards are often very flexible, allowing any employee to find an item or retailer they’re interested in. They can also be very easy to deploy, since they arrive by email or text and can be awarded and delivered in just a few minutes. Digital rewards can also be very motivating as incentives, since they can arrive moments after the completion of a goal or deadline. No one likes to wait for their rewards, after all!

Gift cards

Gift cards are a great option for employee incentives. They are flexible enough that any employee can find something they like from a list of popular national retailers, but they are specific enough to express gratitude and feel like a thoughtful gift. Gift cards can be deployed quickly both as physical and digital cards as well as in a variety of denominations. They occupy a sweet spot between cash, which everyone uses but doesn’t feel special at all, and a specific gift item, which can feel like a wasted opportunity if the recipient doesn’t like or want the item in question. Gift cards give employees flexibility to spend their rewards as they like both online and in-store.

Volunteer time and charitable donations

Offering volunteer time and charitable donations as an employee incentive can be a powerful motivator, especially for charitable causes and non-profits people really care about. If your company works closely with an industry, population, or region that a charity works to support, that charity could be ideal for incentives like volunteer time and donations. You can even offer a gift card that also supports a great cause. Learn more.

Incentives related to work-life balance

Gym memberships, wellness products, massages, and other items that help keep employees happy and healthy are all good ideas for employee incentives. These items can be expensive, which makes them a worthy prize, and many people really enjoy their benefits. One problem is that these incentives are specific, and it’s not uncommon to find employees who won’t be able to enjoy them. For example, an employee with a physical disability might not be able to make use of a gym membership, or an employee who doesn’t like to be touched might feel left out by a massage prize. It can be hard to find a wellness reward that works for everyone.

Workplace perks

Why not offer ways to make your workplace better as an employee incentive? Coffee machines, upgraded break rooms, and other office luxuries are a popular option for an employee incentives program. These perks can be very specific, however, and limited only to people who will actually get some use out of the perks—only coffee drinkers will get to enjoy a new coffee machine, for example. Workplace perks also leave out work-from-home employees, a growing part of the modern workforce.

Tuition reimbursement

Tuition reimbursement tops this list as one of the most valuable possible incentives, making it one of the most generous ways to incentivize employees. It is unfortunately also one of the narrowest gifts and one of the hardest to use. Out of all the employees at a company, the number who are actively interested in pursuing advanced degrees—and all of the effort and time commitments that go along with a program like that—is probably quite small. Tuition reimbursement is a wonderful perk to offer employees, but as an incentive it probably leaves a majority of your team feeling unmotivated.

Professional development opportunities

Offering professional development opportunities like networking events or conference attendance can be a wonderful prize for employee incentive programs. This gives employees a way to grow in their skills and careers. For some industries, certain professional conferences can be hugely popular yearly events and desirable destinations.

Experiences and memberships

Offering memberships in professional organizations or networking groups can also be an effective prize for incentive programs. Most people are hungry to grow in their careers, which can make these memberships a goal worth striving for.

Bring your pet to work

Bringing your pet to work can be a real boost to productivity and a wonderful addition to your company culture. Studies show that animals can reduce stress and improve morale, and many people love animals. However, bringing pets to work should simply be a matter of policy, rather than a prize for an incentive program. If you do the math and decide that a pet-friendly office is worth having, go ahead and do it. As a prize, it lacks the immediacy and benefit that drives the best employee incentive programs.

How to develop an employee incentive program

Developing an employee incentive program is all about two main things: the goals and the rewards. Fully defining exactly what employees need to do, and explicitly describing what they’ll win if they meet their goal, is crucial. Without a clearly defined goal, employees won’t feel motivated or feel like they have power over whether the goal is achieved or not. Without understanding the prize, employees could feel let down or disappointed when their hard work goes unrecognized.

Define objectives and KPIs

Whatever your business goal is, it should be SMART: Specific, Measurable, Achievable, Relevant, and Timely. “Increasing sales revenue by 15% in Q3” is a SMART goal. “Reducing work-place accidents to 0 incidents this year” is a SMART goal. Vaguely making the company “better” in undefined or unachievable ways will only lead to disappointment.

Once you have a SMART goal, identify all of the individual ways employees can meet that goal and the key performance indicators you’ll track. These KPIs should be broken down until they present something an individual can do on a daily basis, like making more phone calls or processing more projects.

Provide the right incentives

The right prize for an employee incentive program is something that is universally desired and useful. If the prize isn’t something that your entire workforce needs and wants, your program is going to fail to motivate.

Determine budget and process

Identify a budget first. What is your business goal worth to you? A revenue-based goal could be extremely valuable and obvious, while looser, culture-based goals might be more difficult to quantify. Both types of goal can be valuable! Pick a budget and identify prizes, then decide how the prize will be awarded. Does it go to everyone in the company? Will you pick out a leading individual or team to drive competition between employees or departments?

Communicate details to employees

Once you have all of the details set, lay it all out to your employees. After all, if they don’t know the rules of the game and when it starts, they can’t be expected to play along.

Solicit feedback

Always be open to feedback. You may have chosen a SMART goal, only for someone to inform you that it isn’t actually achievable. You might pick a great gift, but feedback could show you that it isn’t really useful for some large chunk of your employees. Take all of this feedback into consideration as you decide how to proceed.

Monitor results and make adjustments

A great employee incentive program is only useful if it works! Monitor your KPIs and see if your sales go up, your employee turnover goes down, your workplace safety gets better, or whatever your goal is. As part of a SMART goal, your program should be measurable. Measure and adjust. If your program is effective, it will make it easy to justify launching it again in the future.

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