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What kind of incentives work best?
Home » Management » Employee Incentives » What kind of incentives work best?According to the 2002 Employee Recognition Survey, the most popular form of employee incentive is a gift certificate; 63 percent of respondents said they give this incentive to their employees. Fifty-eight percent of respondents said they give cash; 41 percent said office accessories; 40 percent said jewelry; and 35 percent said household items. The cliché incentive—the watch—came in at only 28 percent. And travel came in at a mere 14 percent.
A study by the Incentive Federation in Westfield, NJ, found that about 65 percent of respondents said that incentive travel or merchandise awards are more memorable and more exciting than cash awards. And memorable is what you’re after, experts say. Cash awards, while probably the reward employees desire most, is quickly spent on everyday items, such as paying off bills or buying the groceries and is quickly forgotten. Merchandise or travel incentives stand out as memorable, unique, and impressive, they say, and therefore give employees more motivation to meet your criteria to earn those standout rewards.
Another issue to consider is whether the incentive is taxable. If you give employees a $100 cash bonus, how much will that employee end up giving to Uncle Sam? Sure, they’re still pocketing more than if you hadn’t given them a gift, but it’s not exactly a $100 gift if they have to pay taxes on it. For that reason, many companies choose to give merchandise, gift certificates, or other items that the employee won’t have to pay taxes on. It’s a courtesy that your employees will appreciate and remember.
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