How to Structure an Incentives Programme: What You Need to Know


If you’re new to incentives and recognition, an incentive programme is a scheme or activity that a business implements to motivate and encourage employees to perform better, experience greater job satisfaction or meet a specific goal.

There are long and short-term schemes that can vary in cost, complexity and nature of the rewards offered, but a scheme should always be created with the intention of aligning business values with those of your employees in a mutually beneficial way.

Incentive programmes help employees to feel acknowledged and appreciated. In turn, they help to reduce staff turnover, sick leave and dips in workplace productivity. The incentive should always be linked to a specific performance goal that has been clearly communicated to all team members.

So, it’s all about money, right?

Well no, not quite!

Whilst cash rewards and incentives – mainly in the form of bonuses – are still a common and popular incentive, it’s becoming commonplace to offer cashless or experiential rewards that improves the quality of life for the recipient.

A reward also doesn’t have to be a once-yearly occurrence or grand gesture, either. It can be delivered in an ad hoc manner or limited to a timeframe. How you choose to recognise high performers in your company should be based on a close study of what most resonates with your staff when it comes to motivation.

Examples of popular cashless rewards and incentives:

Next up, Identify the Goals and Objectives of your Incentives Programme

Allocating budget and resources to a programme that incentivises performance means that you and your key stakeholders have identified the value of rewarding positive behaviour and building strong relationships with your employees – two critical factors in any successful company culture.

To see a return on your investment, however, it is essential to have clearly defined goals that are relayed to all participants from the start. Simply offering rewards for the sake of looking to keep employees happy isn’t the best approach and may actually have the opposite effect.

It’s important to have engagement and interest from employees to get them on board with the proposed incentive scheme, so make sure that the programme is simple to understand and the goals are attainable.

You will be able to identify your objectives by reviewing current company data such as sales performance, reviews from your customers and other key business metrics.

Choosing the right reward and the best way to give it

Not everyone is motivated by money, particularly employees that are already earning a satisfactory salary or have a different career agenda.

Some individuals prefer recognition, peer encouragement, and small but meaningful gestures that show they are viewed as more than just a number. Sometimes, simply saying ‘thank you’ for going the extra mile can make a world of difference to morale and motivation!

Financial rewards become absorbed into your employees' personal monthly spend and run the risk of going unnoticed or becoming expected after a while. This kind of reward can also be divisive in encouraging unhealthy competition amongst team members, that’s why it’s important to understand what your employees will respond to best.

Non-monetary rewards are multifaceted in that they can serve as a reminder of your employee’s achievement and help them to feel distinguished.

You could introduce a tiered programme where the incentives vary in value the more that an employee contributes; this helps to keep things attainable while also recognising the most invested employees – this performance-based structure is particularly useful for sales departments.

Ad hoc bonuses are usually more randomised and are given to employees as a show of gratitude for their efforts or when they have achieved outstanding results. As an employer, you can use your discretion as to what will be a sufficient reward in this situation, taking into account what the particular individual would benefit from most.

Discover how we helped Volvo in our case study - click here to read

Agree on a measurable target and track performance

For your incentive program to bring in the best results, it has to be measurable.

Being vague or ambiguous about the goal posts will not only discourage your employees, but it will thoroughly discredit your efforts and break the trust between you and your staff members.

It’s necessary for there to be a clear connection between the target and the incentive. Your employees must understand why you are requesting them to display a specific behaviour, how this will improve your business’ performance, and, ultimately, what is in it for them.

If your incentive scheme is established to solve a particular problem, make sure you communicate that to your employees. Individualise your programme so that each team or employee can see their contribution to the progress you are making and gain a sense of achievement.

Whether you use specialised software or a recognition platform to track performance, feedback from customers or reports from management, the results need to be obtained in a fair, factual manner that does not alienate anyone on the team.

When everyone has a good concept of where they stand, where the target is and how long they have to achieve their goal, it becomes easier to reward people’s accomplishments and creates transparency which rolls into a positive feedback loop between management and staff.

Spread the Word!

It might be a good idea to create a focus group with the representatives of the team or group of employees you are targeting. Generate ideas about what incentives will stimulate motivation and formulate the rules and time scale within which the goals should be achieved.

Once you have formulated the programme, create targeted messaging that captures the attention of your employees and gives them a 360° view of the plan.

Essential information to include on promotional material:

  • The benefits of the incentive for the employee
  • The goals and objectives the employee must reach
  • The key behaviours you are trying to inspire amongst team members
  • The tools and resources that the employee must use to perform the tasks
  • How progress will be measured
  • The due date that the tasks must be completed by
  • How and when the reward can be claimed
  • A simple explanation of all financial information relating to the reward

Above all, your incentive plan will say a lot about who you are as a business. How you reward your employees conveys your company’s values and mission, not only to your employees but also to prospective new talent.

The structure of your incentive program will be unique and customised to your business needs, so it’s important to know your target audience, have a dedicated budget, an allocated time frame and clearly signposted goals.

Find the Recognition Scheme Your Sales Team Will Love