Impacts of Incentives on Employee Performance

By Alex
December 2, 2021

If you are a business owner in this current environment of 2021, you have to make sure that you put employee performance at the forefront of your mind always. There are no ifs or buts about it, it really is that simple. You need to realize something and that is the fact that your employees are what is driving your business forward. They are almost like the fuel of the company and they help keep the furnace running properly. 

On the flip side of that is the scenario when the fuel is not running the business properly or it may have managed somehow to get wet again, then what you have is the equivalent of a blackout. If there is one thing that we can all unanimously agree on then it is the fact that blackouts, literal or metaphorical, are expensive. They can not only sap motivation but can also interrupt proper progress. 

In this article, we will be looking at both incentives and the roles they play in making sure your workforce is properly engaged and motivated. So, to help the reader, we have outlined this particular article as such.:


  • Do Incentives Have an Impact on the Performance of Your Employees?
  • The conditions that need to be met to properly implement a rewards and recognition program.

Do Incentives Have an Impact on the Performance of Your Employees?

This may not exactly shock you but the answer to this very simple question is a resounding YES. You probably saw that coming but just note that while the answer to the question is yes, some other things need to be considered to make the program effective. 

A lot of studies have been conducted on this matter throughout a period. However, one common misconception that still remains to this day is the fact that many business owners are still not sure whether investing in incentive programs actually brings ROI. A lot of them, without knowing much about the subject, will say that money spent on incentive programs is simply money down the drain. 

However, very recently that misconception has started to change quite a bit. This may be because of the fact that a newer study pointed out that a properly implemented incentive program can easily bring in an increase in performance by as much as 44%. However, they were also able to find out how exactly this happens. The main idea here is that you have to implement some sort of incentive program that will trigger their motivation. This will need to be applied very carefully and according to the company’s culture, values, and ethos. 

Another very common thing that contributes to an improper incentive program is a deficit of knowledge on the part of the business owners on how to effectively execute these programs. Just know that when it is done properly, incentive programs can improve employee performance, boost employee innovation, engagement among employees, and also, become more attractive to top talent. 

The Conditions That Need to be Met

Certain conditions need to be met to successfully implement an employee recognition and rewards program. For your incentive program to be successful, you need to make sure that the following are being done properly:

  • The main reason for poor performance amongst your employees is probably down to low motivation levels. There are several reasons as to how and why motivation levels are so low and why employees are underperforming in general. Just as an example, it could be that they do not have access to proper resources. If that is the case, then the necessary resources have to be acquired.

Your employees may also be just drained from the responsibilities associated with their roles. If this is the case, then additional training or assistance can really help. What we are trying to get at is that incentive programs will simply not work if the main reason for underperformance is a lack of motivation. 

  • The performance of your employees needs to be measured. The best forms of employee recognition programs are the ones that are measurable and are challenging but, with a little bit of effort, achievable. This is one of the primary reasons why it is important to make sure that the goals you set for your employees are actually attainable. They should not be something that is completely beyond the scope of your employees.

If you just set goals that cannot be achieved and are not realistic, then you really do need to evaluate your employee incentive programs. As a business owner, you need to get it right. This will be for your own good and for the benefit of your business. If the business grows, everyone involved with the business will be benefited.


Related Post's

Copyright 2022 | All Rights Reserved

  • error: Content is protected !!