The Art of Using Incentives in Your Employee Loyalty Program.
Giving out rewards to employees is a very effective way to make them more productive and dedicated to company’s values and goals. Before even thinking about giving incentives, entrepreneurs need to learn how to give recognition for employee’s effort. There’s a myriad of options at your disposal. Also, the recognition system should be separated from standard rewards companies usually provide to their most agile workers. Here’s a fraction of what you can do to give recognition to your employee who provided extra-ordinary results:
- Employee of the week/month plate;
- Arrange superiors to shake hands with the employee and congratulate him/her;
- Sending a “thank you” email or letter;
Even though non-material way of motivating and giving recognition is effective, it has been shown that recognition is valued more if supported with some material incentive. In the continuation of the article, you will be acquainted with the types of material incentives.
Financial rewards are essential as an instrument of achieving the basic life necessities as well as entertaining some feeling of belonging and fulfillment. Employers tend to neglect the fact that their employees work so that they can get paid, not only to contribute to the company. Furthermore, the financial aspect of rewards is still paramount. Here are some of the most common arrangements:
- Bonuses – This type of financial reward is very popular in the United States. It is mainly used for rewarding group and team efforts. Bonuses are shared in accordance to an employee’s salary, or the role they took in finishing a successful project.
- Raises – Most companies raise their employees’ salaries at least once in three years and this is one of the most anticipated moments during their careers. This also means that employees will work harder in order to earn a higher raise, which is why this is one of the most effective, but also the most expensive types of employee incentives.
- Profit sharing – Profit sharing programs provide employees certain percentage of the company’s profits. This works as a very effective stimulant for employees to work harder and to synchronize their work with other members of the team in order to produce the highest possible profit for the company.
Share company’s stocks
This is an ultimate reward for all company employees and it is a great way to make them more loyal, agile and to strengthen their belief in company’s mission and goals. This strategy is very popular in recently incorporated startups, which don’t have huge payrolls. Sharing company’s stocks to chosen employees is a very complex process. Here is a summarized and simplified overview of the process:
- Choose employee stock ownership plan (sell them stocks at low prices, share stocks for free, etc.);
- Decide how many stocks you are going to give out (no more than 49%);
- Pick the right delegating method (giving to most loyal or most agile employees, sharing stocks to all employees, etc.);
- Create stock-giving schedule (wait until company scores some larger profits, give it all now, etc.);
Other creative rewards
There are plenty of other less conventional ways employers can reward their most agile employees. Entrepreneurs, take note. This is a generous way to express your creativity. You can always research what your employees need and provide them with that. Here are some ideas you can use.
- Giving them universal gift cards – These are the best possible presents, because they allow employees to choose goods they are in need of. Therefore, giving out gift cards is very close to giving out bonuses, just much less expensive.
- Free spa treatments – It’s a great way to relieve your key employees from work related stress and make them more loyal and agile.
- Engraved brass plates – Opt for this if you want to emphasize the importance of your employees and show them your gratitude. For white collar employees, plate should be placed on their desk or office door, while blue collar employees can receive them on their work-station.
Rewards are much more effective way to manage your collective than introducing penalties. Entrepreneurs should develop friendly relations with employees, and every member of the team should know that rewards they are going to get, depend solely on their own effort and dedication.