March 5, 2019
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Mat Vogels

Happy employees are productive employees: the connection between incentives and productivity

Employee productivity can prove to be a key cornerstone for the success of a business.

Incentives and employee productivity have been proven in numerous studies to be directly linked. However, incentives for employees have also been proven difficult to manage from HR managers and others within the C-suite. When implemented correctly, incentive programs can increase performance and engagement. So what does it take to put into place incentives that will up productivity in your company?

The finer points of employee recognition

Employee recognition requires several different layers to be successful. First, making everyone eligible is a must—within reason, of course. If employee recognition is only available to a certain level or department, there will be disappointment and a fear of missing out (FOMO) lingering around the office. A project manager shouldn’t receive all the praise for a milestone or achievement, but make sure that it is shared around the team.

Expectations should be clearly laid out in open communication, along with timelines; people naturally look to the future for something to be excited about. This doesn’t mean having people believe that they are guaranteed any particular reward at a certain time, but having a known framework of how good work is recognized.

Lastly, too much subjectiveness can be toxic for a program. Objectives and clear-cut expectations of how to gain the incentive leave less room for questioning, and for the risk of different rewards for similar work.

The right way to use incentives in the workplace

Like many things in life, there is a right way and a wrong way. The following are a few questions to ask—and answer—before deciding on an incentives program. It’s also a good idea to find a way to measure employee productivity before you start, so you can see how and where the program is having effects, and justify the money spent.

What merits an incentive?

Forbes has some rules for how and when to reward employees. One of them states that behaviors and not just outcomes should be rewarded. Along with the obvious achievements look for good attitudes, behaviors, and deeds that are progressing the employee or team towards a goal.

Which incentives are appropriate?

Think of it like gift giving; does the gift fit the person and occasion? If a team hit their weekly sales goal, a coffee or food-related reward would be ideal! Do you have a younger employee base? Something experience-based like TopGolf could create team memories and bonding opportunities. Incentives need to be contextualized to improve employee productivity.

For distributed companies, perks available globally like Netflix subscriptions are perfect. Travel companies might keep it on-theme with AirBnB rewards. The possibilities are many, varied, and customizable to an individual level.

What should incentives accomplish?

Incentives are essentially behavior science in practice. If you’re able to enforce positive behaviors in a positive manner, you might have hit upon the key to increasing employee productivity. That can only be good for the bottom line.

Ultimately, as the previously-mentioned Forbes article states, you want to motivate your employees intrinsically rather than extrinsically. You don’t want to use rewards as carrots day to day. The idea is not to motivate people to get rewards (this can become stale), but to motivate them to work hard because they want to.

Used judiciously, rewards should result in employees having the desire to work hard within themselves—because they work for a great company that takes note of their efforts. Job satisfaction is the goal.

Happy employees really are more productive.

51 percent of the U.S. workforce is not engaged at work, which suggests that half of your employees are currently “checked out,” possibly wasting time and not being as productive as possible. However, a good incentive program can drastically shift that number.

Many statistics have shown that employees work better, are more engaged, produce better outcomes and stick around longer if they are recognized properly. In fact, the report linked above shows that companies with strategic recognition reported a mean turnover rate that is 23 percent lower than companies without an incentive program. In short, workplace incentives and recognition make working hours enjoyable and fulfilling, not dreadful, and employee productivity dramatically increases. A win-win!

Zestful customizes incentive programs to create happy and productive workplaces. It can get your people working harder, create a happier work environment, and allow your business to continue growing. Take a look at how it works—and how it might work for you.