Recently, the Dow Jones and the S&P 500 indexes have hit record high numbers. However, in many countries, including the U.S., the economy is still struggling and a lot of companies are still tightening up their expenses in order to save a couple of bucks. One of those expenses is employee incentives, which are tangible rewards given out for reaching predetermined goals.
Aside from cash, which is the most recognized incentive for sales personal, the most commonly used employee incentive are travel vouchers and merchandise (small appliances, gift cards, etc’). Even in today’s economic reality, or perhaps because of it, incentives still play a crucial role in employee’s morale. Furthermore, in today’s competitive business environment, employees comes to expect incentives as something they “deserve” and the lack of such incentives may paint the picture (wrongfully at times) of an undesirable workplace.
A recent survey by Accountemps, on incentives employees want sheds some light on the topic. The survey included responses from more than 1400 CFOs from a random sample of U.S. enterprizes with more than 20 employees. The CFOs were asked, “What perks, if any, is your company offering or planning to offer in 2011 in an effort to attract and retain employees?” Their responses included:
- 29% – Subsidized or free training/ education
- 24% – more flexible working hours and/or telecommuting
- 24 % – Coaching programs
- 13% – Gift / incentives programs
- 11% Totally or partly subsidized lunch
- 11% – On-site incentives e.g. fitness center, childcare and / or dry cleaning
- 10% Subsidized transportation
- 9% Subsidized fitness memberships
- 8% Sabbaticals
We can see from the survey that the companies focused on incentives that improve the workplace environment and overall quality of life of the employee, rather than one time gifts. This is a win-win situation for both parties. Since most workplaces aren’t Google, who is famous for its perks or even a mid-size software company – they can’t afford to shower their employees with incentives – they can however, make work a healthier and better place to be in. Thus, raising the employee’s happiness as well as their production in the process. Incentives such as a gym or daycare can also be more cost effective to the company and in the long term even save the company money by reducing sick days and absent days and increasing production.
Because of the importance of health, companies actually provide financial incentives to encourage employees to participate in health programs. Fidelity Investments, an employee benefits service provider, in cooperation with NBGH (the National Business Group on Health), conducted a study on that topic.
The study showed that employers utilized different kinds of incentives in 2011 to casue employees to take part in health improvement policies. The incentives varied from cash and gift cards to adding contributions to health savings accounts, and es even more punishing efforts e.g. reducing contributions to health plans if employees didn’t enrole in any of these programs. The incentives provided averaged a total of $430 per employee in 2010, a 65 percent increase from $260 in 2009. Nearly 50% of companies that granted such incentives in 2010 also offered them to dependants of workers, at an average of $420. Twelve % of these companies used negative incentives e.g. decrease of health plans contribution.