Business incentive programs could be the best way to maximize employee productivity and efficiency, but will it work for your company? It’s understandable if you’re on the fence about choosing large, medium, or small business employee incentives programs, but these pros and cons could make your choice easier to make.
Pros
Increases Productivity: Business incentive programs can help push employees to achieve great things by increasing productivity—especially if the incentive is monetary. In addition to individual incentives, group productivity can increase through team incentives. Rewarding teams inspires coworkers to help one another and hold each other to a higher standard—the high performers understand the only way to earn the incentive is to encourage low performers.
Decrease Employee Turnover: According to CNBC, small business employee incentive programs may help you retain employees and have a lower turnover rate. A lucrative incentive program makes employees feel as though they are recognized for their hard work—which encourages them to stay with the company for a longer period of time. Additionally, an employee who takes pride in their work is less bored and burned out, meaning they’ll stay with the company longer.
Enhances Performance: Employees who have been working for a company for several years may become burned out and feel bored with their job. An incentive program, which promises bonuses or another type of compensation urges employees to boost their performance. Someone is going to work harder for bonus holiday pay or other types of rewards (such as more days off).
Small Incentives Work: An incentive doesn’t need to be a giant vacation. Employees love bonuses of many forms. One way to get all team members to cooperate is by creating an environment that rewards employees with smaller incentives—such as taking a longer lunch than usual for offering a great idea or product that is useful for the company.
Cons
De-Motivates Employees: On the flip side, employees that don’t receive incentives may feel as though they aren’t being recognized. Individual incentives can make employees feel as though they weren’t able to meet their goals, and therefore didn’t receive a bonus. While it can benefit some and encourage healthy competition, others may be de-motivated due to their low performance.
Creates Conflict: Another drawback of business incentive programs is that it can create conflict between top performers who do more for team goals and low performers that contribute less. A small business employee incentives program is more at risk for this due to the size of the company when compared to a larger company that has over 200 employees.
Decrease Effective Teamwork: A healthy amount of competitiveness is good for a company, but sometimes it can get out of hand. Small business employee incentives programs and business incentive programs can create an environment of extreme competitiveness. This can be an issue in offices where most of the jobs are done in teams. Competitiveness can create resentment and affect the relationship between team members. Overall, this can decrease productivity.
