The Importance of Incentive Programs

Incentive programs are used to motivate individuals to achieve business goals and accomplish aims with the prospect of a reward, either monetary/material (money incentives or gifts) or honorary (employee recognition), in exchange for exemplary performance in the academe or in the workplace. Because of this, incentive programs work hand-in-hand with employee/student achievement recognition.

Incentive programs are considered an important factor that can influence the success of a company through employee satisfaction and improved drive and motivation, as it is also a tool that can help in the reaching of not just business goals but personal professional goals as well. Incentive programs help boost the morale of workers and imbibe a continuous, positive attitude and a healthy yet competitive working environment.

Incentive programs are designed to reciprocate positive internal or external attitudes displayed either by the employees (i.e. consistent early birds in the workplace) or by the customers or clients, like customer loyalty. It is non-verbal communication that tells the end receiver that the positive traits he or she is continually displaying - such as work ethics, mastery of tasks, diligence or commendable performance – did not go unnoticed.

Incentive programs are designed to rewards those who are performing above and beyond the average expectation, as they are made to inspire others to do the same, ultimately making the company not just more productive, but also teeming with positive and professional attitude.

There are several ways for designing incentive programs. These designs may be based on point programs (i.e. points being earned for point-generating achievements with the accumulation of points equivalent to rewards) or sales incentives (i.e. reaching, and if possible, breaking of sales quota), for example.

The implementation of incentive programs can now be done either internally through a task force composed of the company's HR as well as other groups involved, or through outsourcing to develop and implement a sound incentive program that can really work inside a specific company. There are companies today that specialize in designing incentive programs, including custom-made reward and recognition programs suitable to the personality of the company.