Motivate Your Workforce with the Power of Performance-Linked Incentives

Unlocking employee potential is key to a thriving business. Organisations with engaged and motivated team members are 21% more profitable and 17% more productive. 

A strategic way to increase engagement is through performance-linked incentives. 

When executed well, performance-linked incentives motivate employees to remain focused and accomplish objectives. Learn what these incentives encompass and how to build your own performance incentive programme with Awardco.

What Are Performance Incentives?

Performance incentives (also known as performance-linked incentives or employee incentives) are rewards that are directly linked to a specific action, behaviour, or achievement. 

Popular examples of performance incentives include:

• Cash bonuses: A classic incentive directly tied to performance
• Recognition: Publicly acknowledging top performers with gift cards or personalised items
• Experience-based rewards: Offering unique experiences like weekend getaways
• Profit sharing: Giving employees a portion of the organisation’s profits
• Professional development opportunities: Offering training or tuition assistance for further education

The Impact of Performance Incentives on Employee Performance

Effective performance incentives impact employee performance by:

• Increasing motivation: When employees know their hard work will be recognised and rewarded, they’re more likely to go the extra mile. Research suggests incentives in the form of performance bonuses motivate team members to work harder to meet objectives.
  
  
• Boosting performance: Incentives solidify the link between effort and results. By rewarding desired behaviours and achievements, companies can reinforce strong performance and encourage employees to consistently strive for improvement.
  
  
• Enhancing job satisfaction: Recognition for accomplishing goals contributes to a positive work environment. Gallup notes well-recognised workforce members are 45% less likely to leave the company after two years.
  ‍

Getting Started with Your Performance Incentive Plan: 3 Ideas & Examples

Here are a few ideas for performance incentive plans to implement in your organisation. Feel free to select one or a few of these plans that work with your budget and organisational objectives. 

1. Quarterly Goals

Quarterly goals are a common type of performance incentive plan. Team members or leaders establish a quarterly goal, and if employees achieve that goal, they are rewarded with an incentive.

Examples

• A team’s quarterly goal is to increase customer satisfaction from a score of 3.5 out of 5 to 4.5. The incentive is a team cash bonus. At the end of the quarter, you can calculate the average rating from customer surveys to assess the score. 

Alternatively, you can offer an individual incentive for the team member with the highest customer satisfaction score. 

• For sales teams, you can incentivise high performance with increased commissions for the team with the highest lead-to-customer conversion rate within the quarter.

2. Wellness Goals

Incentive plans can also include a wellness focus. This can be an excellent strategy for organisations looking to improve work-life balance or foster a more health-centred culture. 

Examples

• You implement a team step challenge. The top prize, which includes an extra three days of holiday leave, will be given to the team that walks the most steps within a month.
  
  
• The top three team members with the most mindfulness session participation points receive additional funds in their lifestyle spending accounts.

3. Sales Goals

If you have a sales team, offering sales incentives is a strategic way to earn more business opportunities and revenue. 

Examples

• You offer bonuses for achieving individual or team sales targets, such as exceeding a specific revenue goal or closing a certain number of deals. 

• Top performers on the sales team earn entries to a business workshop where they can acquire additional certifications. These incentives are given to those who acquire new customers or win new business opportunities via existing clients.
  

Important Considerations for Incentive Programme Implementation

The following are some things you should keep in mind when putting your performance incentive plan together: 

• Alignment with company values: Make sure your incentive plan aligns with your company’s overall values and mission.
• Measurable and achievable goals: Set specific, measurable, achievable, relevant and time-bound (SMART) goals for your incentive plan.
• Fair and transparent: Ensure the incentive plan is fair, transparent and understood by all employees.
• Regular communication: Regularly communicate the progress of the incentive plan to keep employees motivated and engaged. 
• Budget constraints: Consider your budget constraints when designing and implementing your incentive plan.
• Recognise when goals are achieved: Share accomplishments through a companywide employee of the month shoutout or a peer-to-peer recognition programme that encourages a culture of appreciation. 

For more insights, learn the five ways you can leverage incentives to retain top talent and encourage a culture of excellence in the workplace.

Manage Performance Incentives Easily 

Cash bonuses, recognition awards and exciting experiences are all popular incentive options. But how do organisations efficiently keep track of incentives and performance? 

We have you covered—Awardco’s incentive programme platform helps organisations streamline and organise performance incentive programmes all in one place. 

Awardco’s platform simplifies incentive management and tracking, ensuring your team members, HR department, and admin team can access the data they need. Our tool aims to make incentives a smooth and rewarding experience for all.

Ignite Your Incentives with Awardco

Performance-linked incentives are vital for driving UK employee engagement and productivity. 

Ready to enjoy the results for yourself? Explore our performance incentive solution and try out a demo.