The value of an employee incentive program is undeniable. It can drive employee behaviour and improve business results. However, improperly designed and implemented incentive programs can cost more than expected without delivering the desired outcomes.

Nonetheless, the needs of every organization differ. Subsequently, each employee incentive plan should be tailored to each company. Copying another company’s incentive program because it worked for them doesn’t guarantee you will see the same results. In reality, you could waste your money and have nothing to show for it.

Employee Engagement Essential to Success

Employee engagement measures an individual’s emotional connection, enthusiasm, and dedication to your company and its mission. However, according to a 2021 report, only 21% of employees are highly engaged and plan to stay at their job for a long time.

According to Glassdoor, attractive benefits are the number one factor employees look at during their job search, slightly above salary and commute time. The loss of key employees during these tumultuous times is especially concerning, because you probably rely on them more than ever. Without a good incentive program, you can’t expect to find top talent.

Increased turnover and absenteeism, poor performance, and increased training and onboarding costs directly affect your bottom line. Luckily, properly structured incentive programs can increase your success rate.

Choosing Appropriate Perks

Companies have many employee incentives available to them, but they must offer value. Possibilities include sales, performance or productivity initiatives, profit sharing, stock options and other forms of stock-based compensation, bonuses, trips, product discounts, and more.

An effective employee incentive program must start with a plan tied to the business’s short and long-term goals, revenues, and expenses. It can also incentivize innovation, vital in competitive industries. Additionally, graduated and varied incentives can attract a wider demographic and address inclusion and diversity needs.

Basically, a good employee incentive program drives business success. Each company needs to consider what value they expect for paying out these bonuses and how this value will be measured.

Key Performance Indicators

As mentioned, employee incentive programs must link with business goals, revenues, employee satisfaction, and actual return. Some may be beyond financial means, while others may not offer the desired results.

As a result, a thorough analysis of the organization’s current and projected financial position is a vital first step. Once the business identifies the purpose of their employee incentives, it can carefully define them and implement appropriate key performance indictors to measure their performance.

Moving Forward

Clearly, spending money on employee incentives that don’t offer value is a waste of time and money. Businesses need in-depth financial insights and advice on appropriate KPIs for their chosen incentives.

Luckily, companies can access this information through an outsourced CFO. They have the proven financial experience you need to help you make wise decisions regarding your employee incentive program. Plus, you can collaborate with them as your business grows without paying for a full-time employee.

If you’re interested in tapping into expert financial advice provided by accredited professionals, contact us for a free consultation. We can help you evaluate your business and balance the cost of your employee incentive program against value.