29 Best Employee Incentive Ideas To Keep Employees Engaged & Motivated

29 Best Employee Incentive Ideas To Keep Employees Engaged & Motivated

Keep your employees engaged and motivated with our top 29 employee incentive ideas. Uncover new strategies to increase productivity and morale.

Tim Kuo

Tim Kuo

Dec 13th 202417 min read

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Picture this: a bustling office where employees are not just working but thriving. They’re engaged, motivated, and loyal. How do you create this magical environment? It comes down to employee incentive ideas that foster real commitment and enthusiasm. Employee loyalty hinges on meaningful rewards and recognition. This article offers the best employee incentive ideas to keep your team engaged and motivated.

One great tool for achieving this is company branded swag from Giftpack. It’s an easy way to keep your employees happy and committed. Keep reading to learn more about this and other employee incentive ideas that will help you keep your team engaged and motivated.

What Are Employee Incentive Programs?

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Employee incentives are rewards given by employers to motivate and recognize employees. Think bonuses, raises, discounts, gifts, profit-sharing, events, healthcare support, tuition funding, and even unique perks like “bring your dog to work” days. These incentives create a positive work environment and boost employee engagement. Companies use them to encourage specific behaviors that align with business goals.

Employee Incentives vs. Employee Benefits: What's the Difference?

Incentives are not the same as benefits. Benefits are given to all employees regardless of performance to improve the overall employee experience. They help shape company culture and enhance working relationships. On the other hand, incentives are usually tied to performance. They are selective and conditional, rewarding only certain employees for their contributions.

Employee Incentive Programs: A Structured Approach

Employee incentive programs are organized systems that manage incentives across the organization. These programs, also known as incentive schemes or plans, can vary in approach. Companies can use one type or a combination to fit their needs and goals best.

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How Do Employee Incentive Programs Benefit Organizations?

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Employee Incentive Programs Boost Productivity

Employee incentive programs are more than just nice-to-haves; they’re strategic game-changers. A study by the Incentive Research Foundation showed a 22% boost in business productivity thanks to these programs. The Society for Human Resource Management (SHRM) added that 79% of employees would work harder if they felt recognized. Simply put, when employees feel valued, they’re motivated to go the extra mile. Incentive programs give them the nudge they need to perform better, work more efficiently, and contribute to the company’s success.

Incentive Programs Reduce Costs

While incentive programs require an upfront investment, they save organizations money in the long run. By reducing turnover and absenteeism, they cut hiring and training costs. Efficiency and work quality improve, leading to fewer costly errors and delays. Customer satisfaction increases, reducing the need for expensive retention efforts. Employees who are engaged and motivated are less likely to leave, call in sick, or make mistakes. That translates to significant savings for the company.

Attract and Retain Top Talent

A well-structured incentive program can attract quality candidates to a company. It shows them that the employer appreciates and seeks to reward employees who exceed expectations. This can motivate them to join the organization and perform well. Once they’re on board, the program helps keep them there. Employees who feel appreciated are more likely to stay with a company. That means fewer vacancies, less time spent on recruitment, and lower overall hiring costs.

Enhance Company Culture

Incentive programs can help create and reinforce a positive company culture. They encourage motivation, self-management, and ownership among employees. They foster a sense of belonging and responsibility. Employees who feel part of something bigger than themselves are more likely to stay engaged and motivated. That can lead to:

• More positive work environment

• Better morale

• Improved productivity

Support Strategic Goals

Incentive programs can be tailored to support specific strategic goals. Whether improving customer satisfaction, increasing sales, or reducing costs, the right program can help achieve those objectives. Organizations can encourage employees to focus on what matters most by aligning incentives with company goals. That can lead to better results and a stronger competitive position in the market.

Encourage Collaboration

Incentive programs benefit individuals and can encourage collaboration across teams and departments. By offering rewards for collective achievements, organizations can foster a sense of teamwork and cooperation, which can lead to more effective collaboration, better communication, and improved outcomes. When employees work together towards common goals, everyone wins.

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29 Best Employee Incentive Ideas To Keep Employees Engaged & Motivated

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1. Bonus

A bonus is paid to an employee as an incentive to perform well throughout the year. Employers usually award a bonus for a specific achievement that meets the company's expectations.

Many companies also pay retention bonuses to keep employees on board. A retention bonus is a financial compensation paid to employees who have remained with their organization for a specific time. Companies offer it as an incentive to ensure that employees don't leave.

Project bonuses have also become very effective ways to motivate employees. They are extra payments for completing a project or properly executing work.

2. Profit-sharing

Profit-sharing is a variable incentive paid to the employee when the organization earns profits. It is measured by revenue or net profit growth or both. The company can offer, for example, a certain percentage of the company's profits to be distributed among the employees.

Profit-sharing is typically used to motivate employees and encourage them to focus on the company's long-term success. It is one of the most common examples of employee incentive plans. It's a great way to reward your employees, particularly if you make adjustments based on performance reviews and individual contributions.

3. ESOP

An employee stock ownership plan (ESOP) is a type of employee benefit that gives employees an equity stake in the business they work for. The National Center for Employee Ownership (NCEO) found that companies grow 8% to 11% per year faster with their ESOPs.

ESOPs continue to be a popular way of motivating employees because of their many advantages. They can help manage equity risk and employee retention, increase employee satisfaction, and reduce turnover. Corporate giants like Disney, Tyson Foods, and Walmart have successfully implemented ESOPs as part of their employee incentive programs.

4. Spot Awards

Spot awards are a hugely effective and fun way to reward your staff. They are also quick and easy to execute. Management typically grants spot awards, but some third-party platforms also enable peers to do so.

Spot awards can be monetary rewards or point-based rewards. A point-based reward system gives awards as points that can be accrued over time or redeemed into some monetary reward.

5. Retirement Plans

Who doesn't want to retire early? Offering retirement plans as a kind of employee incentive program is an attractive concept for all employees. The United States is one of the few countries where the government allows employers to offer tax-deferred retirement accounts.

It can be challenging. Many people can only retire early if they have the means to do so. According to a survey by Economic Policy Institute, most people, even those nearing retirement, have little or no retirement savings.

To ensure a comfortable retirement, more businesses are exploring new ways to offer incentives for employees to save for retirement. Retirement plans can include a 401(k) plan and an employer match plan.

6. Dearness Allowance

Employers use dearness allowance to raise the salaries of their employees. They provide this allowance to workers on top of their basic pay. It is a payment that compensates for the rise in prices and cost of living.

Earlier, the cost of living wasn't a consideration for employers when determining employee compensation. Inflation was expected to be a temporary phenomenon that would subside on its own. Living costs have increased, and inflation has become a permanent fixture. Offering a dearness allowance as an employee incentive program is a reliable way to attract and retain employees.

7. Fringe Benefits

Fringe benefits are the extras that companies offer employees in addition to their salaries. They are usually non-cash perks like health insurance, paid vacation days, or gym memberships.

Fringe benefits are attractive to employees and employers. They can reduce the employer's overall tax and compensation costs. Many employers use many unique ways to get their employees excited and engaged in the workplace. As competitive as the job market is, finding and keeping qualified employees takes work.

8. Suggestion Incentive

Many companies use suggestion incentive programs to show employees that their opinions matter. When an employee's suggestion improves revenue, productivity, or efficiency, managers reward them.

The idea behind employee suggestion incentives is simple: people are more productive when they feel valued. Reward employees for their good ideas, big or small. This creates a win-win situation for your company and your employees.

9. Referral Bonus

Employee referral is one of the most effective ways of recruiting potential employees in a company.

Employees who make referrals are motivated to find the "right" kind of person for a job because their reputation is on the line. So they take the time to find people who are a good fit for the job. A company that offers employee referral bonuses tends to attract better employees because the referee is naturally invested in the person's success they referred.

10. Send Surprise Chocolates and Gifts

Surprises are the best way to let people know you appreciate them and have been thinking about them. And who doesn’t like to be thought of?

For this precise reason, sending chocolates and gifts is super cool. But how about making them more special? Send them gifts on general days when they won’t be expecting anything. Just amaze them. You can also do this on special occasions like birthdays or festivals.

11. Send Them Food or Offer Delivery Discounts

Who doesn’t like free food? Everyone does! And with the pandemic, food delivery has become every person’s addiction. So, why not feed your employees unapologetic or guilty pleasures through incentives? Cooking every meal while working from home can be cumbersome for remote staff. Therefore, you can either fix a day in a week or a month when you send them a meal.

The great thing about this incentive is that you can choose what to do with it. You can either send whatever you want, get discount coupons, or send money into their food wallets. The latter two will be even more special because your team will enjoy a meal of their choosing whenever they like.

Through this incentive, you will help alleviate some stress off your employees. Moreover, you will also be supporting small local businesses through delivery options.

12. Health Incentives

Employers reward employees for adopting healthy habits and achieving health goals. Some examples include losing weight, normalizing blood pressure, lowering cholesterol levels, or quitting smoking. A RAND Corporation study found that employers who offered their employees health incentives reported a 22% higher average participation rate in wellbeing programs than employers who didn’t offer similar incentives.

13. Mental and Emotional Wellness

Companies can offer Employee Assistance Programs that provide confidential counseling to help employees manage work anxiety or personal challenges. These programs can also include conducting mindfulness workshops to teach mindfulness techniques and stress management strategies. Employees may also get paid mental health breaks or free access to meditation or mindfulness apps to support their mental well-being.

Real-life example International money transfer service Wise has an Employee Assistance Program that offers free, confidential services to its workforce. These services include:

• Mental health support

• Financial guidance

• Legal assistance

• Help with family issues

• Advice on achieving work-life balance

They are available 24/7 over the phone, online, or face-to-face.

14. Travel Incentives

Travel incentives are a compelling way to boost employee engagement by offering rewarding experiences for achieving specific goals. These incentives typically involve fully paid trips for individuals or teams who meet predetermined targets within a set timeframe. Organizations can shape employee behaviors, drive engagement, and improve performance by providing such rewards.

Their high value among senior leaders underscores the effectiveness of travel incentives. According to the Incentive Research Federation, 53% of senior leaders view incentive travel as a “need to have,” while 48% consider it an “essential strategic differentiator.” Only 13% see it as an “area to cut.” This strong endorsement highlights travel incentives' significant impact on motivation and engagement. Offering these memorable rewards recognizes employee achievements and fosters a sense of value and appreciation, creating a powerful motivator for continued high performance and commitment.

15. Commission Programs

Commission is additional compensation earned by an employee based on their job performance, commonly used within sales teams. Employees in commission-based roles agree to be paid a certain amount that depends entirely on hitting specified goals or metrics. This structure directly correlates effort and reward, driving employees to perform at their best to achieve higher earnings.

The value of commission as an incentive is clear, especially given U.S. organizations' massive investment in their sales forces — over $800 billion, with $200 billion devoted to compensation alone. Commission-based compensation directly links effort to reward, aligning individual goals with organizational objectives. This approach boosts engagement by making employees feel accountable for their success, enhancing productivity and profitability. By rewarding high performers with substantial earnings, companies can foster a competitive, motivated, and highly engaged workforce, ensuring teams always strive for excellence and deliver top results.

16. Career Development

If recent trends are any indication, millennials and Gen Z are looking for more than just a steady paycheck in their careers. Companies that provide new training opportunities and support career development are likely to attract and retain the best talent in the future.

Companies need to facilitate the right learning and development opportunities to encourage this growth. One effective way to motivate employees is by offering specialized training sessions.

17. Peer-to-peer Appreciation

You can encourage your employees to appreciate and reward their peers with points for exceptional teamwork or cooperative behavior. These points can then be redeemed for a range of gifts or perks. This employee incentive program enhances collaboration and promotes company culture among employees.

18. Meeting Customer Satisfaction Goals

Employees who consistently receive high customer satisfaction ratings earn points redeemable for experiences like spa days, weekend getaways, or buffet dinners. Some companies may also allow these employees to exchange their points for additional paid time off or exclusive company merchandise.

19. Charitable Donations

A charitable giving program is a great way for a company to show it cares about its employees’ interests and leave employees feeling good about the organization they work for. An example of how this could work is when company leadership commits to donating a specific amount to the nonprofit or organization selected by an employee who finishes with the most sales for the quarter.

20. Sabbatical Leave Program

Sabbatical leave allows employees to take extended paid time off to rest, learn new skills, travel and more. This benefit is typically offered to long-time employees with a consistent work ethic and commitment to the company.

21. Company Outings

A close connection at work makes a major difference for an employee, leading to improved productivity, enhanced customer interactions and a more positive perception of the company. As a result, companies must develop a sense of community among their employees, and company outings — like happy hours, organized lunches and team activities — are a good place to start.

22. Lunch Stipend

Lunch stipends can be included in an employer’s fringe benefits program and serve as an extra incentive for employees to enter the office. For companies that require a degree of in-person work, a lunch stipend is a nice trade-off that saves employees from having to worry about meal plans and enables them to dedicate more energy to their work.

23. Flexible Working Hours

Offering flexibility in work schedules or the option to work from home addresses employees' diverse needs and preferences. This autonomy can lead to higher job satisfaction, reduced stress levels, and a more engaged workforce. Flexible schedules are becoming more of a long term setup now, with 46.5% saying in Workable’s The Great Discontent report that they’ve been working on a flexible schedule for more than two years in 2023, and they like it.

24. Additional Paid Time Off (PTO)

Depending on the country or jurisdiction, companies may or may not be required to provide paid time off, but life happens. Employees need time off for unexpected illnesses, childcare, and vacation days. Surprisingly, one study found that employees value PTO more than health insurance. Generous PTO supports employee’s work-life balance, allowing them to take necessary time off without stressing about lost wages. Include it in your compensation package to attract and retain competitive talent.

25. Profit-sharing Plans

Profit-sharing plans distribute a portion of the company’s profits among employees. These programs strategically align employees’ interests with the company’s short- and long-term mission and goals. Plus, profit-sharing plans foster a sense of shared success and commitment, boosting employee morale and retention.

26. Company Equity

Equity incentive programs are another powerful compensation-based perk that incentivizes employees to align their daily output and productivity with company-wide goals. Monetary incentives are often awarded as part of a long-term incentive plan through stock options, stocks, warrants, or bonds.

They’re excellent options for startups recruiting competitive hires on tight budgets. Since equity vests over time, you motivate employees to stick around and do their best to appreciate company stock.

27. Choice of Projects

Allow valuable employees to select projects that match their interests and skills. This unique approach to employee recognition rewards high-quality work and empowers them to continue to take ownership of their work. Plus, aligning projects with employees’ interests and expertise will likely drive enhanced results.

28. Employee Recognition

The average employee can spend up to five years in a company before they feel like a part of the team. Over half (51%) of employees say an award or a pat on the back would be more effective than money in showing appreciation.

29. Employee Mentorship

According to an article by the Society for Human Resource Management (SHRM), employees who have an employee mentor are more likely to report the following:

• Sense of job satisfaction

• Actively participating in decision-making

• Feeling valued by their organization and supervisor

• Feeling that they can use their strengths to do their job

This is just one of many reasons why companies are starting to understand the value of employee mentorship as an employee incentive. In the grand scheme of employee perks, employee mentorship is low-cost, but the biggest impact.

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6 Best Practices For Implementing Employee Incentive Ideas And Programs

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  1. Identify Your Goals: Start Smart

Kick things off by determining what you want to achieve with your employee incentive program. Align the incentives with your company’s big-picture objectives. If innovation is a priority, consider rewarding employees who bring fresh ideas. The key is to create a program that supports your company’s mission while motivating your team.

  1. Understand Employee Priorities: Customize and Connect

A one-size-fits-all approach rarely works, so dig into what your employees want. Use engagement surveys to discover if they prefer:

• Cash bonuses

• Gift cards

• Extra time off

• Something else

Do they want entertainment perks or flexible work schedules? A flexible package might be the way to go, allowing employees to choose the most valuable incentives. Make the process clear and straightforward.

  1. Evaluate Your Options: Data-Driven Decisions

Once you understand what your employees want, evaluate your options. Which incentives align with employee needs and organizational goals? If boosting sales is critical, prioritize incentives that motivate employees to close more deals. When designing your program, consider cost, ease of implementation, and adaptability.

  1. Get Feedback: Refine and Pilot

After narrowing down your options, get employee feedback on potential programs. Use conjoint analysis to gather opinions on each aspect. Pilot test options to uncover issues early, then roll them out in stages, adjusting based on ongoing feedback. This approach ensures you develop a program that resonates with employees and achieves desired outcomes.

  1. Ensure Fairness: Transparency Matters

Fairness is key to avoiding demotivation. Establish clear criteria for earning rewards and communicate them openly to employees. Apply the rules consistently to ensure fairness. For example, if improving sales is your goal, base rewards on exceeding sales targets. Transparency in the process builds trust and motivates employees to participate.

  1. Maintain and Update Regularly: Keep it Fresh

• Request feedback regularly to keep your program relevant and effective.

• Track which incentives resonate most with employees and adjust as needed.

• Automate feedback collection to make it more efficient.

• Distribute surveys at regular intervals to stay informed and make necessary updates.

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5 Common Mistakes To Avoid With Employee Incentive Programs

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Set Clear Objectives from the Start

Without clear goals, an incentive program can quickly fall apart. If the objectives aren't aligned with the organization's broader vision, chaos can ensue. This can lead to a lack of unity and decreased program efficacy. So, you must ensure the program's aims are well-defined and connected to the company's overall mission.

Ensure Fairness in Distribution

Playing favorites can be damaging to morale. Bias, whether intentional or not, can result in some employees receiving more rewards than others. This uneven distribution can negatively impact team spirit. To avoid this, make sure that incentives are evenly distributed among employees.

Avoid Fostering Unhealthy Competition

Creating competition among employees can be detrimental to an incentive program. If rewards are too hard to achieve or only accessible to a select few, it might lead to division rather than unity. This can turn incentives into a tool of conflict rather than a motivator for productivity.

Listen to Employee Feedback

Ignoring employee feedback can lead to a lack of engagement and participation. It's crucial to regularly seek feedback to ensure the program remains relevant and effective. This will help maintain employee buy-in and ensure the program delivers on its purpose.

Be Consistent with Recognition

Inconsistent or infrequent recognition can leave employees feeling unappreciated. Managers should connect with each direct report at least once a month to share recognition. With enough data, you can determine the ideal number of recognition moments per year and set that as a benchmark for all managers.

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When considering employee incentives, consider how they create loyalty and engagement. It's not just about giving gifts. It's about making people feel valued and appreciated. When employees receive gifts that feel personal, it reinforces their connection to the company. You’re not just handing out rewards. You’re building relationships and showing that you care about them as individuals.

This can lead to Increased:

• Motivation

• Satisfaction

• Productivity

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Giftpack offers global delivery, so you can send gifts anywhere in the world. This is a huge advantage for companies with international teams or clients. You don’t have to worry about the logistics of shipping gifts overseas. Giftpack takes care of it for you. This means you can focus on choosing the right gift and let Giftpack handle the rest.

Building Meaningful Connections with Personalized Gifting

Giftpack helps you build meaningful connections with personalized gifting. This is about more than just giving gifts. It's about creating a sense of connection and appreciation and giving a gift that feels personal shows that you care about the recipient as an individual. This can strengthen relationships and make people feel valued.

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Tim Kuo

Tim Kuo

Dec 13th 202417 min read

About Giftpack

Giftpack's AI-powered solution simplifies the corporate gifting process and amplifies the impact of personalized gifts. We're crafting memorable touchpoints by sending personalized gifts selected out of a curated pool of 3 million options with just one click. Our AI technology efficiently analyzes each recipient's social media, cultural background, and digital footprint to customize gift options at scale. We take care of generating, ordering, and shipping gifts worldwide. We're transforming the way people build authentic business relationships by sending smarter gifts faster with gifting CRM.

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