12 employee incentive programs to retain top talent

Once upon a time, work was a simple exchange. Employees traded their time, skills, and knowledge for a steady paycheck, healthcare, and a pension.

But times have changed. Today’s top job candidates expect comprehensive employee incentive programs in order to join the team and stay engaged. The shift reflects a broad evolution in workplace culture, where financial reimbursement is just the start of employee engagement.

Companies must go beyond a basic monetary compensation package. The best employee rewards address various needs, from profit-sharing and career development opportunities to flexible work schedules and wellness programs. 

We’ve compiled a complete guide on these perks to show you how to motivate employees with different types of incentives. 

What is an employee incentive program?

An employee incentive program is a structured approach to motivating and recognizing employees through rewards, recognitions, and benefits.

Employees want to feel like more than numbers on a call sheet. Incentives promote deeper satisfaction and commitment. For many companies, incentive plans reinforce positive behavior, build company culture, and stimulate productivity.

Effective employee incentive programs address diverse financial, personal, and professional needs. They’re structured to provide immediate recognition for good work as well as long-term motivation for continued service and growth.

Before we explore what incentives are right for your business, let’s break down the competitive advantages a strong program can bring to your organization. 

Benefits of employee incentive programs

Motivating employees is a never-ending task. Here’s how a comprehensive rewards strategy will transform your workforce.

• Boost employee retention: Incentive programs make employees feel like more than just worker bees. Employees who feel recognized and valued for their contributions are more likely to pay it forward, strengthening their investment in the company in the long term. Plus, robust employee rewards programs offer financial, professional, and personal enrichment, making your organization more attractive than competitors. 
• Improve productivity: When monetary incentives and nonmonetary benefits are tied to clear performance outcomes, they provide a light at the end of the tunnel, driving employees to work hard to achieve organizational goals. Employees who know their effort will be recognized and rewarded may feel motivated to increase their output and boost overall productivity.  
• Encourage team building: Your incentive program can include team goals that set collective targets. This approach fosters a collaborative environment that motivates employees to work together to achieve shared objectives. For example, team-based bonuses and group recognition encourage employees to support each other and share resources, enhancing broader employee engagement. 
• High return on investment: Employee incentives might seem like unnecessary line items on your budget without any clear payoff. Although measuring the value of employee incentive programs is difficult, enhanced productivity, lower turnover, and increased employee satisfaction contribute to a stronger bottom line. 

12 examples of employee incentive programs

An effective employee incentive program should cover a range of needs. Here are employee incentive ideas to help you boost morale, enhance productivity, and motivate employees:

1. Spot bonuses

Spot bonuses are immediate, one-time financial rewards for employees who go above and beyond their duties. They provide instant recognition and can boost morale by acknowledging good behavior in real time, making employees feel appreciated, and motivating their coworkers to strive for the same. 

2. Improved equipment

Upgrading employees’ workstations or providing them with the latest technology can significantly improve their productivity and comfort. When you invest in high-quality equipment, you help employees perform more efficiently while demonstrating an organizational commitment to growth and excellence.

3. Travel incentives

We all appreciate a break from routine, especially if the break is a beach vacation or a family trip to an amusement park. Travel incentives reward top performers with trips or perks, such as full vacation packages or travel vouchers. These rewards tie hard work to rewarding experiences, reinforcing the value of exceptional performance. 

4. Company outings

Your employees spend a lot of time with one another. The better their interpersonal relationships, the better their collective outputs. Team-building activities and social events foster camaraderie and team bonding. They’re a win-win for everyone, enhancing your workforce’s collaborative abilities while offering a fun break from the usual work setting. 

5. Employee referral programs

Referral programs are doubly advantageous. Incentives for successful referrals (like a cash referral bonus or additional paid time off) help attract top talent and show appreciation to employees who contribute to a stronger team. Employee referral programs with clear regulations (like earning a referral bonus after the new hire completes a probationary period) ensure that workers recommend strong, serious talent. 

6. Additional paid time off (PTO)

Depending on the country or jurisdiction, companies may or may not be required to provide paid time off, but life happens. Employees need time off for unexpected illnesses, childcare, and vacation days. Generous PTO supports employee’s work-life balance, allowing them to take necessary time off without stressing about lost wages. Include it in your compensation package to attract and retain competitive talent. 

7. Profit-sharing plans

Profit-sharing plans distribute a portion of the company’s profits among employees. These programs strategically align employees’ interests with the company’s short- and long-term mission and goals. Plus, profit-sharing plans foster a sense of shared success and commitment, boosting employee morale and retention. 

8. Company equity 

Equity incentive programs are another powerful compensation-based perk that incentivizes employees to align their daily output and productivity with company-wide goals. Monetary incentives are often awarded as part of a long-term incentive plan through stock options, stocks, warrants, or bonds.

They’re excellent options for startups recruiting competitive hires on tight budgets. Since equity vests over time, you motivate employees to stick around and do their best to appreciate company stock. 

9. Flexible work arrangements

The traditional 9-to-5 schedule doesn’t work for everybody. For some employees, flexibility in work hours or location can profoundly impact job satisfaction and productivity. Remote and hybrid work, flexible hours, or compressed workweeks help employees balance personal and professional lives. These nonmonetary perks show trust and consideration, support positive company culture, reduce burnout, and make your workplace more attractive. 

10. Choice of projects

Allow valuable employees to select projects that match their interests and skills. This unique approach to employee recognition rewards high-quality work and empowers them to continue to take ownership of their work. Plus, aligning projects with employees’ interests and expertise will likely drive enhanced results. 

11. Merit-based raises

Salary increases based on achievement demonstrate a commitment to growth and exceptional performance. Merit-based raises ensure monetary incentives reward employees for valuable work, making them sustainable incentive plans that reinforce clear expectations for workers. 

12. Memberships and discounts

Offering memberships to gyms and discounts on services or products shows that you value your employees’ personal development and financial wellness. Plus, they’re a strategic employee incentive that makes your workforce thankful to work for you, improving loyalty and retention. 

How to incentivize employees: Best practices for employee incentive programs

So, you built an incredible total rewards package. Now, it’s time to implement it. Follow these best practices to reap all the rewards of your perks strategy:

• Build it into the culture: Ensure that the incentive program reflects your company’s core values and goals. When the program supports what your organization stands for, it reinforces a mutually beneficial employer-employee relationship. For example, if your company values innovation, monetary incentives for creative, successful problem-solving are a natural extension of your organizational culture. 
• Gather employee feedback: An employee incentive program won’t be effective if you reward employees with perks or benefits that don’t motivate them. Ask for constructive feedback to tailor the program to your workforce’s needs and preferences.
• Be inclusive: Big rewards for key roles and senior employees foster loyalty, but incentive programs should include everyone from entry-level hires to C-suite management. Inclusive employee incentives promote a sense of fairness and aspiration throughout the organization. 
• Personalize rewards: Rewards and recognition are not one-size-fits-all. Some workers prefer spot bonuses, whereas others want wellness incentives. Bring workers into the conversation and adapt to their needs to motivate employees with meaningful, impactful incentives.

Create a winning employee incentive program with Oyster

When you’re building a comprehensive employee incentive program, the possibilities are endless. Thoughtful implementation makes all the difference for workers seeking a position or considering their future at your organization.

Oyster’s Total Rewards program can help with customizable employee incentive plans that reward employees in all the right ways. Our global employment platform helps you manage salary, equity, and benefits for your distributed global workforce. We’ll ensure your compensation packages are competitive and compliant, so you can focus on building a top-notch team.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.