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Ideas for employee incentives

Having employee incentives in place is a powerful way to engage your staff and keep their performance levels high. Crucially, they improve staff retention, meaning that staff who you have spent time and money training are less likely to leave. Staff incentives may give your employees a strong reason to stay committed to your business. This is important because one of your main goals as an employer is to train and retain talent.

See more: Team Building Tips and Activities to Boost Employee Morale and Engagement

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Incentives and wellbeing

Boosting staff wellbeing is key to developing a healthy, positive workplace culture where all your employees feel motivated. According to a recent Aviva UK survey, the work benefits that employees want most are:

  • a pension scheme
  • flexible working
  • paid sick leave
  • bonuses
  • training and development.

This article will guide you through some of the best and most desired incentives for employees. It also includes ideas for each initiative and will help you to decide which ones are right for your business.


If you can afford it as a business, giving the option of flexible working hours is a great retention initiative. For many employees, home life is just as important as their working life, if not more so. They will be more likely to stay with your company if they can adjust their hours to help an elderly family member or to drop children off at school. This employee incentive is particularly useful to consider if you have many members of staff with young families or elderly parents.

Working from home

Working from home has become an increasingly desirable option for many employers and employees during the COVID-19 pandemic. A McKinsey analysis of 2000 workers showed that a hybrid of remote and office-based work during the pandemic increased productivity overall for well-paid, educated staff. Those in the finance, management and professional services industries have the highest-rated potential for home working. However, Goldman Sachs leader David Solomon considers working from home to be a non-viable option on a long-term basis, as it reduces opportunities to train new staff and collaboration. Therefore, it is a good idea to give employees this incentive on a case-by-case basis, as you may find that it is more beneficial for some employees than others.

You may find that you need to monitor employee performance more closely to examine whether this initiative is beneficial to you. Whether working from home is possible also depends on what industry your employees are working in; for example, employees working with specialised machinery or at a restaurant cannot work from home.

After-work social events

A team that likes and respects each other is a happy, productive and motivated team. That is because having a sense of belonging plays a crucial role in maintaining positive mental health. Therefore, you may want to create opportunities for your employees to bond and get to know each other better. Consider arranging after-work pub meet-ups or fun activities such as the following:

  • escape rooms
  • go-karting
  • free cinema trip
  • football tournaments
  • charity events
  • after-work cooking classes.

It may also be important to celebrate significant holidays such as Christmas with your staff, for example by organising a Christmas party with a theme or with catering provided. If it is an employee’s birthday, have your other employees arrange to sign a card or bring in a cake for everyone to share.

Non-commission related bonuses

You may already be providing bonuses to staff in the form of sales commission. However, this only applies to your sales team; it is fair to give your entire team a boost from time to time. Employees not on your sales team need to feel just as rewarded for their hard work and may feel envious of those who are receiving greater employee incentives for this. Creating staff incentives for every member of your team makes your employees feel part of the bigger picture.

Staff incentives can be as small as ordering pizza for lunch on a Friday or giving cash awards to the best employees in a team. You can also create a programme around your bonuses and awards, which doubles up as a means to track the performance progress of your staff. Other incentives of this nature include:

  • Uber credit
  • gift cards at the end of the year
  • branded company goodie bags with snacks, drinks, beauty/grooming products and tote bags.

Even a handwritten note expressing your appreciation for a member of staff during a busy period can go a long way towards showing that you’ve noticed their hard work and boost morale.

Employee of the month awards

Keeping tabs on each employee’s performance and contributions to a team can help you decide which employees deserve to receive an employee of the month award for their efforts. Employees are likely to be more motivated if this comes with a financial reward or prize. There are many ways to make your employee of the month award more exciting to your employees. However, they depend on your budget as a company. These include the following:

  • social media shout-outs to your employee of the month, such as on LinkedIn or Facebook
  • a bonus or gift voucher
  • a gift bag
  • a year’s cinema or streaming membership.

Points-based award scheme

Depending on the size of your business and budget for initiatives, you may wish to consider a points-based award scheme. A points-based scheme is one where employees can redeem points accumulated through hard work for prizes. This type of scheme may be too costly for many SMEs, however, you can still offer small rewards to staff through a points-based system.

Team-based employee incentives

Individual bonuses and awards such as after-work social events and employee of the month awards are great for improving workplace performance. However, you may want to aim to balance this with team-based employee incentives to encourage your employees to work together harmoniously. If you only reward individuals, it can create counterproductive levels of competitiveness between employees and an unsociable working environment. Reward excellent team-playing efforts by creating shared quarterly targets rewarded by extra time off or after-work pub meet-ups.

Training and leadership programmes

Creating opportunities for your employees to learn new skills and build on old ones can be an effective way to retain them. Covering the costs of training or leadership schemes helps them to grow. It also helps them to prepare for promotion opportunities. Not only are training and leadership schemes great for improving staff retention, but they can also give you data that will help you to track the progress and development of your employees. The UK Government’s ‘Plan for Jobs’ programmes help you run apprenticeship schemes and offer free qualifications. They also help staff to up-skill, which in turn improves retention. Another element of these programmes is the Skills Bootcamps scheme, whereby your employees can develop their digital and technical skills.

Gym and wellness perks

Many modern businesses offer their staff gym memberships or discounts, or other wellness-related perks such as free yoga or mindfulness classes. Some businesses have a gym on-site or other spaces where employees can relax and socialise with other staff during their lunch breaks. Not only are these extra opportunities for your employees to socialise with each other, but they give them a chance to unwind after working hard throughout the day. The UK Government allows businesses to have a gym on-site tax-free.

Some companies pay their staff to exercise at work, seeing benefits in overall employee health and feelings of productivity. Employee incentives are broad and can have benefits beyond seeing an increase in staff performance and retention. With gym or wellness programmes, they can help boost employee health and attendance rates. Each business will benefit from different initiatives, so you should consider which initiatives work best for you depending on your industry and the personalities of your employees.

When your employees have opportunities to progress, it gives them a reason to stay motivated and loyal to your business. Having incentives that allow your staff to grow and develop their skills helps them to do this. Finally, consider your budget for your initiatives and which ones you can realistically afford to introduce. Ideally, you may need to make sure that the benefits outweigh the costs. Regularly assess any initiatives or schemes that you set up for employees. You may want to make sure that they have the desired effect on productivity, retention and wellbeing. Please note that none of the companies mentioned in this article are affiliated with Indeed.

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