WHY DO EMPLOYEE INCENTIVES MATTER?

Posted in Incentivising Performance, Recognising Success, Incentive and Recognition, Employee Recognition, Sales Incentives, Channel Incentives

Why do staff need extra incentives to do their job?

Employee incentives are used in plenty organisations across the UK, but we still meet plenty of employers who are sceptical about offering them to their own people. And that's fine! They're not something to be rushed into to follow the crowd - using incentive and recognition in your organisation should be carefully thought out.

So, do incentives really work? What can they actually do for a business? And why should you offer our employees incentives to do their job? Isn't their salary enough?

Well, to answer these questions, you need to understand why an incentive programme might be good for your business, in other words, what do you want to achieve by implementing an employee incentive? Here we take a look at five of the most common outcomes organisations will be trying to achieve with incentives, and why it matters.

1. Employee incentives increase productivity

Incentives promote productivity in several ways. The obvious solution is to incentivise staff to deliver more sales, with rewards for hitting their targets and a distinct lack of rewards for failing to get there, but an incentive scheme should be a much more than a "carrot and stick" tick-box exercise.

Instead, incentives can - and should! - be used to encourage staff to educate themselves about new products or services, build long-standing relationships with customers, demonstrate brand values, or develop new skills that will make it easier for them to perform in their role. This may well have the knock-on effect of increasing sales in many cases, but it'll also benefit the business in a much more holisticd way.

By thinking about what your organisation needs, and aligning the scheme to those goals and vision, you can improve employees’ ability to do their jobs well, increasing productivity.

2. Employee incentives help retain the best talent

Your best company assets are intangible: knowledge, experience and talent. Organisations need all three of these elements in order to be successful, and incentives can help achieve this in a world where employees are increasingly likely to have one eye on the job listings.

Offering employees incentives shows each member of your workforce that they are valued, that they have a part to play in making sure that the organisation is a success. And, ultimately, making employees feel valued is the key to employee loyalty. By doing so, you can give employees a sense of purpose, focusing their energies and recognising their achievements or performance levels.

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3. Employee incentives influence behaviour

The banking scandals highlighted how incentive programmes had changed the behaviour of sales teams - from providing only products the customer needed to just going for the sale to achieve targets. As a result, sales incentive programmes got a lot of bad press. But the thing is, when they're actually used right, rather than focusing on sales at any cost, they can be incredibly powerful tools for bringing out the best in your people.

Incentives direct people towards a goal, and influence their behaviour in order to achieve that goal. Depending on the results you need, schemes can be designed to help sales employees develop deep product knowledge, to promote teamwork and collaboration, or to communicate brand values and encourage employees to live up to them.

4. Employee incentives increase company morale and build successful cultures

Staff incentive programmes improve employee morale in a number of ways. A properly set-up incentive scheme gives employees a reason to believe in the company they work for, and that they are part of something bigger. Incentive schemes also build successful company cultures as they appeal to and nurture a wide variety of personalities; so if you choose the right incentive scheme for your business, you'll ensure everyone feels valued. 

It also shows employees that you care – especially when the rewards are tailored towards people’s individual wants and needs. They can improve employee happiness and create a sense of fun by utilising tools such as gamification, all of which contribute to increasing company morale.

5. Employee incentives can improve the bottom line

Incentives programmes go beyond simple measuring sales success and a direct impact on your bottom line; if the programme is designed properly it can also have a positive impact on factors such as customer satisfaction scores, staff absence and recruitment costs – all of which will improve your bottom line figures - just in a slightly more indirect manner.

But this holistic approach is important - incentivising your staff to be at their best and rewarding them for a job well done should be built into the culture of an organisation at every level, not just in the sames team.

The benefits organisations can achieve with a staff incentive programme can vastly outweigh the cost of providing the rewards, so make sure you’re looking after your staff to maintain a happy and motivated workforce.

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