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| home > about us > Newsletter > Issue 4: June 2008 > The Incentive Effect | ||||||||||||||||||||||||||||||
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The Incentive Effect: Why Businesses Should Be Motivated To Motivate Some companies may think that simply providing their employees with a job in a struggling economy is incentive enough. While job security naturally motivates a person to put in their time every day, inspiring an employee to work that extra hour, beat that aggressive deadline or simply remain focused often takes something extra: an incentive program.
Incentive programs engage employees by offering rewards and recognition for a job well done. The company that invests in motivating its people can see a direct link between employee and customer satisfaction. In recent research conducted by Gallup, it was shown that organizations where employees have above average attitudes towards their work also have 22 percent higher productivity, 38 percent higher customer satisfaction scores and 27 percent higher profits.
Engaged employees are consistently connected to bottom line business results. In a survey of over 640,000 employees from around the world conducted at the Society of Human Resource Management (SHRM)'s 2006 Conference, it was found that companies reporting high employee engagement improved net income by 13.2 percent while low engagement companies declined by 3.8 percent in the same period.
Besides optimizing employee productivity, incentive programs can actually help sustain an employee population. A study conducted by SHRM shows that 79 percent of employees leave their jobs because of a perceived lack of recognition. This means lost productivity and increased hiring costs, not to mention the effect employee loss has on internal morale and customer perception.
Incentives can help remedy failing employee morale, but it can be a challenge to select the best program. The type of incentive program that a company chooses to implement must appease a diverse audience, which is why it should not only be easy to understand and execute but also offer the right amount of choice. For instance, a prepaid card that allows a program participant to select a reward suitable to their individual desires is ideal.
Incentive programs are an effective way businesses can engage employees, increase productivity and even boost the bottom line. When considering the costs of not maintaining a satisfied employee population, a well-executed incentive program is clearly a smart investment. |
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