Designing Effective Employee Reward & Incentive Programs


Sounds easy enough, right? Any time you hear that a company tried an incentive program and “it didn’t work”, it’s likely that the company managers tried to design the program on their own. Designing effective employee reward & incentive programs is not as easy as it sounds.

The Incentive Marketing Association offers a certification program for incentive professionals. This consists of a 100-question exam on a 300+ page curriculum that covers the theory behind reward and recognition programs, how they should be structured, the pitfalls that should be avoided, why they work and the return on investment and other benefits that companies can expect from an effective program.

It’s always advisable to contract with an Incentive Professional to help design your employee reward and incentive programs. Here are the steps that they’ll be guiding you through:

  1. Determine Objectives. The most successful programs start with just a few clear primary and secondary goals that are measurable.
  2. Analyze the Audience. In most cases, a performance improvement or incentive program will not involve 100% of your employees. This step determines which employee groups can impact the goals.
  3. Fact Finding and Audience Involvement. Your employees will be more engaged in the program if they play a role in planning. Invite input from key employee representatives but be sure to structure the questions properly and establish the boundaries so you don’t get and ineffective program design (one that awards with cash or gift cards as an example).
  4. Create Rule Structure & Develop Budget. An Incentive Professional will help ensure that your rules are “fair” for all employees and can help you to handicap or weight certain metrics to make sure that the program is fair. Using an Incentive Professional ensures that you’ll be learning from other’s mistakes rather than your own! Improperly designed programs are fraught with unintended consequences. Likewise, the incentive expert can guide you through the budget process, often informed by the program structure. Programs can be developed around a fixed budget or budgets based on incremental gains.
  5. Select Rewards. Left to their own devices, many internal program developers default to cash or cash like substitutes like gift cards.  There are definitive studies showing that tangible rewards are far more effective than cash in employee reward and incentive programs. This is an area where you don’t really want to get employee input as they will frequently request cash and gift cards. Those types of awards are not memorable and using them will prevent your program from reaching its goals.
  6. Communicate the Program. Not just at the kick-off and the end, but throughout the program.
  7. Operate & Track Results. An Incentive Professional can also either provide an operating system or help to adapt your current platforms to capture and track program data and results.
  8. Fulfill the Rewards. The more immediate, the better. An experienced expert can help you to select a rewards supplier that has a reliable system in place, understands the priorities of employee programs and will provide an excellent experience for your recipients.
  9. Evaluate & Measure. After the program is complete, you’ll want to evaluate whether the goals in Step 1 have been met, and whether the program results met expectations. This is also where you’ll determine whether any outside factors contributed to the program results and what could be done differently or better next time.
  10. Celebrate Success! Reward your achievers in a public ceremony or celebration if possible. Make sure results are shared with remote employees. It’s important that company leaders are involved in this process.

Employee reward and incentive programs provide a wealth of benefits for the companies that offer them – but only if they’re structured properly. Contract with an Incentive Professional to help you design your program and you’ll be among the many companies realizing higher productivity, larger market share, lower turnover, higher employee engagement levels and many more benefits!

Contact one of our Incentive Professionals today to get started!


In economic terms, the multiplier effect refers to the proportional increase or decrease in final income that results from an injection or withdrawal of capital. In terms of Safety Reward Programs, the multiplier effect might refer to the ROI² (Return on Incentive Investment). A properly structured program significantly impacts overall employee engagement and safety culture, where employees are attuned to safety-related issues, inspired to display “Above & Beyond” safe behaviors, willing to be safety ambassadors, and encouraged to promote learning and support continuous improvement. Such best-in-class programs are designed to promote group objectives and reward individual behavior, engaging, motivating, and rewarding the people behind your success.

Fortunately, there are thousands of companies in high-risk industries that have excellent safety programming, training, and coaching in place. Many include safety in their list of core values and have invested heavily in EHS (Environment, Health, and Safety) technology, training, telematics, and personnel. However, too many miss the opportunity to incentivize and recognize individual safety contributions, behaviors, and performance.

Programs featuring tangible and experiential awards as the reward currency can have a multiplying effect that pays dividends. Benefits include a more highly engaged workforce, fewer accidents and incidents, reduced claims and losses, lower turnover and absenteeism, better communication, increased productivity, visibility to leading and lagging indicators, incremental coaching and training opportunities, and improved profitability.

So, what’s the rub? Are engagement programs focused on employee safety, health, and wellness expensive to implement? Do they only make sense for companies with thousands of safety-sensitive workers? The answer to both questions is no. Properly structured programs can be cost-effective and right-sized for companies with as few as 100 safety-sensitive workers up to those with 10,000 or more. The ROI² of these programs can be expressed as a ratio (in this case, 4:1), with quantitative results showing a savings of $4.00 for every $1.00 invested and qualitative results revealing higher employee morale, which serves as a catalyst for productivity. Safety Reward Programs help to mitigate risk, elevate employee engagement, and improve overall safety culture. They also present an excellent opportunity for companies to simply say thank you to their employees for being safe, committed, and engaged.

People have an inherent need to know that their efforts do not go unnoticed. Safety Reward Programs provide the stimulus and energy that encourage employees to perform at their best and achieve new heights.

Heidi Chatfield


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