An incentive should motivate your team, increasing performance levels and profit – but do they work?
When we surveyed our employees, a staggering 85% felt motivated to do their best when an incentive was offered. Three-quarters confirmed how effective incentives are because they felt motivated until the end.
The most motivational incentives were:
1. Monetary (40%)
2. Free holiday (29%)
3. Time off (23%)
Money was the most effective motivator, and for companies this is an achievable incentive. As a smaller business without the means to offer large monetary rewards, alternatives like an hour early finish, dress down days and extended lunches work just as well. Recognition is important through a trophy or certificate, but make sure it’s tailored to employees.
The incentive’s duration makes an impact
We ran a short competition that lasted a week, a medium incentive for a trip to Barcelona and a long-term incentive trip to Las Vegas. Surprisingly, the medium-length incentive made the most money.
Long, medium and short-term incentives were equally motivational to our team, so invest in all three to ensure there is always a driving force for your employees.
With a smaller incentive, the concentrated effort makes the team feel they’re directly influencing the end outcome. This works from a managerial perspective because you can see the impact of the incentive, which gives you the power to change the results.
Longer-term incentives work because they’re something to build towards, rather than rushing through for a quick gain. Larger incentives don’t have to be extravagant, just ensure there’s enough inspiration to motivate them throughout.
With a medium-term incentive, the goal is not too far away to lose sight of what you are working towards and the reward still has a lasting impact. Month-long incentives capture employees’ attention and give them something substantial to focus on.
What style of incentive works best?
From our employees, 71% preferred a team incentive over an individual one, as the whole team support each other to meet a bigger target. Recruiters are naturally competitive and a team incentive uses this driven nature to a company’s advantage, pushing employees to excel.
When a team incentive is offered, energy levels in the office increase because everyone’s working together, which improves performance and secures the ROI [return on investment].
We found that negative incentives were ineffective because the motivation was not to win, just to make sure that you didn’t lose. If you’re working to create a positive work environment, a negative incentive can be counterproductive.
Make incentives work for your company
With incentives you should adapt the model to suit your company and employees. Carrying out an internal survey following the incentives was helpful to discover what employees found most motivational.
Monetary incentives work, but benchmarking the results in terms of finance and employee feedback are key to creating effective motivators. Don’t be afraid to experiment with the incentives you offer in line with the duration, performance levels and feedback.
Patrick Bell is managing director at Genesis Associates.
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