Employee motivation is crucial to the success of any business, but it’s often challenging to find ways to keep employees engaged and productive. One popular approach is to use incentives, such as bonuses, promotions or other rewards, to motivate employees to perform at their best. But do incentives really work, and are they the best way to keep employees motivated?
Below, 15 Forbes Business Council members share specific examples of incentives that can be used to motivate employees as well as the pros and cons, which can range from increased productivity and job satisfaction to a focus on short-term results and a decrease in intrinsic motivation.
1. Money Or PTO
Incentives can be a great way to motivate employees, but it depends on what kind of incentive you offer and what will actually motivate your employees. For example, some people might be motivated by money while others might prefer extra time off or recognition for their hard work. Incentives can be a powerful tool, but they’re just one part of a larger strategy. – Monika Ilieva, Cafe De Anatolia
2. A Supportive Work Environment
Incentives can motivate employees, but they must be accompanied by a supportive work environment that values employee contributions. Otherwise, incentives can lead to a toxic workplace. Companies should focus on creating a culture of respect, transparency and growth opportunities for a motivated and loyal workforce. – Mo Rafi, Rafi Credit Consulting
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3. Performance-Based Bonuses
I have personally seen the impact of incentives. We started giving performance-based bonuses tied to specific outcomes in my company, which significantly boosted our team’s productivity and focus. Incentives are a powerful tool for keeping employees motivated and committed, but make it align with the company’s goals and values and ensure they are fair and achievable for all employees. – Ifiok Nkem, Snapilabs
4. Tickets
Incentives are a great way to motivate employees, and they do not need to be monetary. Many businesses give and receive goods from each other, such as amusement parks, movies and sporting events tickets. These are great ways to recognize and appreciate employees. It also allows the employee to have a little fun with their family or friends, which is good for mental health. – Josée Larocque Patton, The HR ICU
5. Incentives Combined With Good Leadership
As human beings, we are inherently competitive. Dangling a carrot to entice and keep people motivated once in a while is great. It adds excitement and energy and employees love a good bonus. Who doesn’t? I think incentives combined with consistent leadership, support, appreciation and tools all work together to create a stable and thriving work environment. – Hoda Mahmoodzadegan, Molly’s Milk Truck
6. Regular Feedback
Pure monetary incentives can lead to transactional relationships with employees where they may only do things for the money or the creation of an entitlement culture. I think the best way to motivate employees is with clear expectations for success, regular and valuable feedback and a culture that recognizes hard work and individual contributions with more than small incentives, trinkets and cash. – Mark Rickmeier, TXI
7. Consistent Incentives
Incentives are good as long as you can continuously do them without interruptions. Human reflexes work in such a way that we get used to good things very quickly. The damage of suddenly not being able to provide the incentives after you’ve been providing them for some time can be much higher than the benefit of introducing them in the first place. – Denys Grabchak, Performetry
8. Personalized Incentives
One size fits one. An incentive for me is to get customer feedback on the work I’ve contributed to. An incentive for my head of development is a lift ticket to go snowboarding. An incentive for my marketing lead is whole-bean coffee from a coffee shop in Savannah. If you think of incentives as global and monochromatic, then you’ll be on the one-size-fits-all bus, which regularly drives off a cliff. – Michael White, MashTank
9. Incentives Aligned With Goals
Incentives are a great way to keep employees motivated if they are aligned with the company’s goals and values as well as employees’ personal goals and life values. Proper assessments can help ensure the type of incentives provided are in alignment with everyone involved for a successful growth journey. – Nona Djavid, eLIVate Retreats
10. Recognition
I think most people are motivated by incentives, but you need to know what the incentives are for each employee. Some employees want incentives in the form of money, such as a bonus or maybe a higher rate of pay for hitting goals. Other employees may be motivated more by a new title or being trusted with more responsibility. I’ve been surprised by how many employees simply want recognition. – Chris Clear, Clear Storage Group, LLC
11. Project Ownership
Financial incentives are bad for company culture. Pay your team well enough that they can get pleasure in accomplishing company goals and objectives. Let team members have ownership of different projects, so they can succeed and fail—both should be celebrated as they will help your company grow. – Joseph Edgar, SnapAds
12. Incentives Planned With Intention
Incentives can be good but only if they resonate with your employees. You need to understand what’s important to your employees and make the incentives tied to that. It doesn’t need to be one size fits all and can vary as long as they are relatively equal while different. Some people like money or time off while others like experience or recognition. If you plan with intention, incentives can be good. – Robert Depalo, National Financial Network
13. Benefits Plans, Stocks And Bonuses
Incentives are an incredible tool for retention and can come in many different forms, such as a strong benefits plan, stock options or bonuses for stellar performance. Incentives can become key motivators and the “cherry on top” for many individuals when building a talented team. Attracting and retaining top talent is critical for performance. – Dylan Duke, Glewee
14. A Celebration Of Efforts And Achievements
I don’t believe incentives are beneficial. I find that they create negative competition, which can lead to a toxic work environment. I believe that most employees will find the compensation and benefits they get enough motivation to get the job done. However, what really makes them go above and beyond what is expected is to recognize and celebrate their efforts or achievements. – Erik Pham, Health Canal
15. Equitable And Balanced Incentives
Incentives that are balanced and don’t unduly influence individuals’ short-term behavior can be motivational. However, employees have varying drivers—some are led by incentives, some by purpose and everyone is driven by the work environment and behavioral motivators. While incentives need to be equitable and can be relied on for some level of motivation, it is only a part of the overall picture. – Sindhu Kutty, Kuroshio Consulting
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