Employee incentive programs are a great way of motivating employees to be more productive. It is easy to think about the cost of these programs, but in reality they can save money in the long-term.
The value of a productive employee is much more than the cost of the incentive program. Employee incentive programs bring many benefits including increased profits, sales, customer loyalty and productivity. These programs even increase the return on stock investments in the company.
The cost of programs to motivate employees is generally small compared to the return in other areas. Some very cost effective ways to achieve job satisfaction and recognition would be trophies or awards to recognize their efforts. There are also great companies which can provide employee awards that are like cash, such as gift cards to recognize milestones or for end of year recognition.
Incentive for Productivity, Safety or Wellness
Incentives that reward productivity increase the company profits and the overall value of the company. Companies with great employee cultures consistently out-perform other companies.
Incentives that encourage safety benefit the company through a reduction in accidents. Accidents are very expensive, especially when employees are injured. In addition, a high accident rate increases insurance costs. A culture that puts a premium on employee safety saves money. Also, employers should take into consideration that by encouraging safety in the workplace, they are opening the doors for financial incentives from Professional Employer Organizations. These financial bonuses could be distributed to employees as an additional award for continued safe practices in the workplace.
Finally, rewarding employees who maintain good health saves money. Health insurance costs are dramatically increasing year after year. If a company can hold these costs down by having a large number of very healthy employees, then this will save money. Many companies provide their employees with corporate incentive programs which give employees discounted memberships to health clubs to help them meet these goals.
Financial Bonuses Vs. Perks
Incentive programs offer bonuses and perks to employees who maintain a high level of performance. Financial bonus are one of the most effective ways to motivate employees. These also have the highest cost. You must provide an additional financial incentive to motivate your employees.
But there are many other ways to encourage employee performance. Perks are low-cost ways to motivate employees. These include special parking privileges, causal dress days, social events and time off. Another low-cost incentive is recognition. Trophies, plaques, awards and other goodies often get a positive response from employees.
Offering additional education to employees generates goodwill and enhances the skill level of your employees. Amenities such as a fitness center, a cafeteria and day care also keep employees happy and generate loyalty. Happy employees are more productive and increase company profits.
Training as an Incentive
One way incentive programs save money is by reducing the need for training programs. If you want to increase employee productivity, you can take one of two routes: You can provide additional training to raise the skill level of your employees, or you can opt for an employee incentive program to increase productivity by increasing motivation.
If your employees are already skilled, additional training may yield diminishing returns in productivity. Furthermore, training programs are expensive. You want to be sure they are really necessary before making the investment.
If motivation is the key problem, it will be more cost-effective to implement an incentive program that increases productivity for much less cost. This does not completely alleviate the need for good training, but it can reduce the amount training required to achieve high employee productivity.
Incentives create a positive office culture and enhance employee loyalty. Loyal employees stay with the company for longer periods, decreasing turnover. Your company will no longer have to burden its human resources department with the constant hiring of new employees. There will be less cost involved in bringing new employees on board. Having an effective employee incentive program means a much leaner and less expensive human resources department.
Employee incentive programs are much more than a frill or a luxury. They can be part of an effective cost-cutting strategy. If your company is struggling with poor employee motivation and low productivity, an incentive program might be the most cost-effective solution to your problem.
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