Employee Incentives: How to Motivate Employees to Go the Extra Mile 

Use these employee incentives best practices to make sure your employees feel recognized for their achievements.

May 15, 2020 By Martin Angjelkoski Share on Twitter! Share on Facebook! Share on LinkedIn!
employee recognition
employee incentives

Employee incentives come in many forms, but they all have one common goal: to motivate your employees to go the extra mile. In today’s competitive world, it is important to know what drives your employees. 

When you know what inspires your employees to do their best, you can facilitate both your employees’ career advancement and your company’s success. Read this article to find out the what, why and how of employee incentives. 

🎁 Since employee recognition is a powerful tool for driving productivity, get these templates to show appreciation to your employees. 

What are Employee Incentives 

First of all, let’s define employee incentives.  

employee incentives quote

In general, HR professionals want to spark their employees’ productivity and improve their company’s business results. However, you can motivate your employees for all kinds of behavior that are leading to an ultimate goal of better performance.  

🎁 In addition, employee incentives can take many forms – from simple “Thank you” to monetary rewards such as bonuses. Take a look at our ideas for employee recognition rewards. 

12 Best Incentives for Employees

There are numerous ways you can incentivize your employees’ behavior, actions and overall work. The prerequisite of implementing an employee recognition program is knowing how your employees want to be recognized for their work. 

For example, 54% of employees prefer verbal “Thank you”, and 31% a written one for their day-to-day accomplishments. On the other hand, 47% of employees prefer to be recognized with a growth opportunity for a significant accomplishment, while 23% would prefer a salary increase. 

employee recognition preference

Furthermore, there is a difference across age groups among your employees. Millennials and Gen Z are especially keen to be rewarded with career advancement opportunities. Therefore, get to know your employees’ preferences and match them with your goals to adjust your employee incentives for best outcomes. 

Here are some of our employee incentives ideas. 

1. Bonuses 

Employee bonuses have proven to be a successful incentive. Not surprising, 65% of employees prefer bonuses to be based on personal performance. The hard cash remains one of the most popular incentive for employees, however, it is also becoming a part of the norm.  

Ideally, you want your employee incentives to go above and beyond. Employees have many options to choose from these days, so bonuses for hitting performance goals should be a part of your standard compensation package. 

2. Student loan repayment plan 

A student loan repayment plan is an excellent opportunity to attract and retain younger workforce. 49% of Millennials and Gen Z workers would quit their jobs within 2 years. Therefore, try setting up a student loan repayment plan that will take off a significant financial burden off your employees’ back, but also ensure they stay with your company longer.  

millennials retention

3. Stock options 

Stock options are a great way to offer indirect monetary reward to your employees. Not only will your employees feel more included in your company’s future plans, they will also work harder for a company they partly own. This is a great employee incentive for smaller and larger businesses alike. 

4. Paid family leave 

Paid family leave is considered to be norm in some countries, while in others it is still yet to be recognized as a necessity. In the US, paid maternity leave is offered by 34% of organizations, while paid paternity leave is offered by 30% of organizations. 

Use this as an opportunity to attract young workforce to your company. Employee incentives that facilitate a good work-life balance are increasingly popular. Show your employees that you care for wellbeing of them and their families – it is an incentive that can hardly be replaced by a monetary reward. 

🎁 Find out what are some other employee perks that you could be great incentives for employees to work better.

5. Extra paid time off 

A generous amount of paid time off was considered a top non-insurance benefit for 40% of US workers in 2019. Again, this is one of the work-life balance benefits packages that is proving very effective in attracting and retaining employees. 

6. Paid vacation 

Along with student loan repayment, paid vacation can be a powerful employee recognition reward for your Millennial and Gen Z workforce. Younger generations love to travel and will be motivated to work for companies that facilitate the travel lifestyle they want. 

7. Flexibility 

Flexibility or the option to work remotely is becoming an absolutely crucial employee incentive. It was being introduced as a great way to cut back on commute, improve work-life balance and have an opportunity to work from attractive location. 

However, with the COVID-19 outbreak, remote work became reality for 61% of US employees. This is why flexible work options are now viewed more as a part of standard employee incentives package in the upcoming years. 

🎁 Read all about how to provide a great remote work experience to your employees. 

8. Growth opportunity 

As explained before, opportunities for career advancement are highly valued by younger workforce. Since Millennials tend to change workplaces more often than other employees, giving them a clear career plan and creating employee development opportunities will result in higher employee retention. 

milennials in the workplace

9. Fitness incentives 

Gym memberships or group fitness incentives are a great way to recognize your employees. Moreover, this type of employee incentives can improve overall employee wellbeing and company culture. 

🎁 Pro tip: Use employee wellbeing platform Healthain to create friendly competition and inspire team spirit while improving your employees’ health. 

10. Personal gifts 

If you want to show your employees’ recognition, try finding out their interests and hobbies. Show your employees how well you know them and how ingrained they are in the company culture by giving them tickets to their favorite show, a book they always wanted to read or a class you think they want to take.  

You will probably need help from your colleagues in choosing such gifts, but you will spark deep emotions that will tie your employees to your company forever. 

🎁 Get more employee rewards ideas you can use as incentives for employees. 

11. Events 

Dinner with the CEO, office parties or group activities are fun employee rewards that you cannot make a mistake with. These events can be held on various occasions such as employee milestones, but they can also be an inspiring way to recognize your employees hard work. 

12. “Thank you” 

A simple “Thank you” never goes out of style. Besides being a courtesy for everyday work your employees perform, “Thank you” notes or emails can make employees feel proud of their accomplishments and motivated for more of such achievements. 

It is especially useful to encourage peer-to-peer recognition and culture of saying “Thank you” among employees, since it is 35.7% more likely to have a positive impact on financial results than manager-only recognition. 

retention improvement

Why IIImportant to Incentivize Your Employees 

The importance of employee recognition has been proven many times. Usually, HR professionals that oversee employee recognition programs measure their results in order to justify their benefits to superiors. HR Business Partners often instigate employee incentives programs that result in desired business outcomes. 

Luckily, there is a staggering amount of data you can find to convince your executives in benefits of employee recognitionIt’s important to notice that 70% of organizations with an employee recognition program tie recognition to organizational values, while 59% integrate recognition into their talent strategy. 

employee recognition effect

Incentives for employees boost employee engagement 

Disengaged employees cost US businesses $500 billion annually. By increasing employee engagement, you will positively affect other aspects of employee experiencetoo. 

Employee engagement itself has been a popular topic among HR professionals for decadesand benefits of highly engaged workplaces have been proven by many organizations. For example, read how this company has increased their employee engagement by 175% with a Recognition and Rewards Platform JobPts. 

Employee incentives improve employee retention 

In today’s competitive market, companies must be the best employers out there in order to retain employeesThat does not mean only monetary compensation – it means creating a work culture your employees will want to stay and flourish in. 

According to research, 68% of HR Professionals say that their recognition program positively affects employee retention in their company. Employee incentives can help you save up to 9 monthly salaries that would take to replace an employee in your company. 

employee retention

Incentives for employees enhance company culture 

Are you looking to strengthen relationships between employees and their managers? Employees say that ongoing recognition of their effort would most improve the relationship with their direct manager.  

If you want to drive any kind of cultural change in your company, you must start motivating people for behaviors and actions you want to see more of. For example, JTI was able to drive complete cultural transformation by incentivizing their employees with simple non-monetary recognition. 

Employee incentives foster innovation 

88% of employees that receive strong performance recognition are proactively innovating and are generating approximately 4 ideas in a month to improve their company’s products, services or systems.  

employee incentives impact innovation

These numbers speak volumes! You are probably aware how important it is to stay on top of new trends in most industries today. Imagine how fast your company would grow if all the employees were proactively innovative! 

Employee incentives contribute to great employee experience 

Employee experience considers everything an employee encounters in a workplaceThe way you recognize your employees’ hard work makes a huge part of your employees experience, making their job satisfaction higher and possibility of turnover lower. 

Employee incentives raise employee productivity 

When a strong employee recognition program is implemented, 46% of employees work at 80% of their capacity or higher. It is as simple as that – employees work harder when their efforts are appreciated! 

🎁 Find out more about employee recognition’s crucial effect on business results.

employee recognition ebook

When Should You Give out Incentives for Employees 

The reasons for recognizing your employees should be determined in coordination with your leadership. Think of the goals you want your company to achieve, and then deconstruct themIdentify which behavior or actions will lead to greater results.  

You want to give the best employee incentives on the market, thus attracting and retaining the high-quality talent in your company. Here is our list of reasons to incentivize your employees for. 

Individual accomplishments 

If your employees achieve their performance goals, you should recognize their accomplishments. For example, your sales rep closing a big deal or your customer rep improving the number of resolved cases are good reasons to reward your employees. 

🎁 See how you can motivate and appreciate your employees with our Recognition and Rewards Platform JobPts. 

Employee milestones 

There are multiple moments that matter during employees’ journey with your company, such as work anniversariesThis way, you are marking your employees’ commitment to your company, and this is an established practice already. Use your employees’ service anniversaries for informal office gatherings. 


If you want to motivate your employees to come up with ideas to advance your products or services, give employee incentives for out-of-the-box thinking and innovative suggestions. This will inspire a vibrant, entrepreneurial culture that will be hard to ignore! 


Good leadership can make or break a team. Therefore, encourage your leaders to be the best they can by recognizing their positive behavior. 


Did you know 86% of employees think that workplace failures are caused by lack of collaboration or ineffective communication? Therefore, reward your employees for showing good teamwork skills. Better yet, award the entire team for successfully collaborating on a project. 

ineffective communication effect


High-quality hires don’t just happen – they come from referrals most of the time. Incentivize your employees to give you referrals and thank them for great candidates they recommended. 


Continuous effort should definitely be recognized – even if the results are sometimes not instantly visible. The last thing you want is your employee giving up. Instead, appreciate your employees’ input and motivate them to continue working hard.

How to Build a Successful Employee Recognition Program 

If you want to give employee incentives on regular basis and track the success of your initiative, take a look at these steps. Employee Recognition Programs have to be well-designed in order to give the best results. 

A good Employee Recognition Program can improve your whole company culture and enhance your business results. Do not miss a chance to introduce positive changes in your company!  

employee recognition steps

Important Facts to Know About Employee Incentives

In this blog, you have learnt about the importance of incentivizing and recognizing your employees’ work. It has a direct impact on employee morale, wellbeing, satisfaction, motivation and, therefore, business success.

When trying to prove the ROI of your employee incentives program, the best way to go is to show statistics from an existing research. This way, it is much easier to get the executives’ buy-in regarding the importance of employee incentives.

Take a look now at some of the most important facts and statistics about employee rewards and recognition.

If you are looking for a detailed step-to-step guide that can help you build a successful employee recognition program, look no further! Get our Employee Recognition Playbook and start the positive changes in your company.