Types of Employee incentive schemes

Incentives work as a very good motivator if the objectives are stated clearly and the incentives are desirable. It is no longer those days when incentives used to be a certain amount of money or a pat on the back. A company now needs to provide multiple incentives, keeping in mind individual workers which can motivate employees and students to give in their best in exam .

Sharing Of Profit

One idea is to allow the employees to share the productivity gains, which can be through cash or stock bonus. This inspires employees to reach benchmarks individually or help in reaching the collective team objective or objective of the organisation in a whole. One way of profit sharing can be deferred compensation and benefits

Cash Bonus

Along with increment in regular pay or commissions, a company can come up with a scheme of one-time bonus which can be set as prize for reaching milestones or providing valuable services. You can take an example such as giving a cash bonus every time an employee suggests a qualified friend who can be hired by the company and who completes the probationary early. You can also set bonuses for achieving target sales or provides an idea which can save money.

Retention Bonus

As the name suggests, these bonuses are awarded to employees who stay with the company for a duration of time, or through certain important events like during the time of merger or important production period. If merger is the case, then you can pay the bonus in full or in installments.

Stock Based, Long Term Incentives

The companies which are publicly traded sometimes offer long term incentives which are generally dependent on the price of common stock. The long-term incentives are the best way to align an employee’s money interest with the company’s. The most popular incentives are usually restricted stocks, which are actually subject to sale restriction or forfeiture as long as the employee is with the company for a certain period of time. Another stock option could be if the company allows employees to own shares at an agreed price for a duration of time. Performance shares like providing actual shares of stock, whose payment will be dependent on performance over the years.

Also Read Doing Employee Performance Valuation Right

Training

Another incentive which employees look for is specialised training in any field of interest. Your employees should be given a chance to choose among the training they think will be the most appropriate for them.

Recognition

Employees like it when they are recognised and appreciated for their hard work in front of their coworkers. You can bring in an ‘Employee of the Month’ program to encourage your workers. The rewards can be an employee’s signs in the lobby, emails, or providing a special parking place, praises at staff meetings and in employee newsletters. The big companies have other policies like choosing employees of the month from each department and inviting them on breakfast with the CEO. Recognition might also include advantages like permission to bring a pet to work, dress as they want for a day, or some prizes like airplane tickets to any destination within a country. As a team incentive, company might allow free happy hours or even pizza party. Most common incentive is allowing I am sponsoring vacation on achieving a specific goal.