The 3 types of incentives and when you should use them

Thursday, 17 November 2011 05:04

Incentives can help to keep workers happy

Incentives can help to keep workers happy

Keeping your employees motivated is one of the keys to running a successful business, but can be difficult to achieve. Running some kind of staff incentives programme can help, particularly if it focuses workers on the company's goals.

The term incentives could cover a wide range of things, but academics have attempted to define it. According to organisational experts Peter B Clark and James Q Wilson, there are three distinct types of incentives available to employers – material, solidarity and purposive.

Material refers to tangible rewards, including wages and benefits, while solidarity incentives are intangible, such as social status and the ability for people to identify themselves with a cause. The former are usually prominent motivators within businesses, but the latter are more often seen in voluntary groups.

Purposive incentives are also intangible, but their use is desirable in both commercial and non-commercial environments, as they are things that help to focus workers on the organisation's goals.

In an ideal world, your business would be able to rely on the simplest type of material incentives and offer employees salary and benefits packages that are high enough to keep them happy and ensure they remain loyal.

The reality is likely to be very different. You will have strict budgets to stick to and output and profitability targets to achieve, so it is unrealistic to think you can just throw money at staffing issues. This is particularly true at a time when many company owners are concerned about tough trading conditions.

One option open to you is a staff rewards scheme, which recognises workers who do a good job or who have done something exceptional. You do not have to spend a lot on this and there are plenty of alternatives to handing over cash.

The incentives can be small items or gift vouchers that can be spent in a range of high street stores, or you could organise an online points scheme that allows staff members to save any rewards they earn and put them towards a bigger purchase.

You may want to run the incentives programme for a specific project, to help motivate staff in a particular department or even make it competitive between different parts of your business.

In addition to giving rewards to workers directly, such schemes can help by improving staff retention, as well as boosting morale and ensuring your employees are focused on achieving the company's overall goals.



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