"Employees are our greatest asset.”

If this well-worn management saying has any meaning at all, then it follows that a well-designed employee incentive program might be one of the best investments an organization could make. 

Strong reward-and-recognition programs can improve employee retention and keep workers positive and focused on organizational goals. They can serve as motivational tools to generate higher performance or as morale boosters in tougher times.

But instituting an employee rewards program isn’t just a nice thing to do - it can also be a profitable business strategy. Employees have a major influence over the behavior and attitudes of customers. It’s been demonstrated that companies with “engaged” employees tend to have more engaged customers who use their products or services more often. Other studies have shown that satisfied employees result in satisfied customers, even when those employees have no direct customer contact.

Rewarding employees on a budget

In times of belt-tightening, incentives are usually among the first budget line-items to get the ax. But when it comes to employee motivation, money isn’t everything. There are plenty of creative ways to maintain incentive programs or recognize achievements without breaking the bank.

Giving employees consistent, positive feedback on how their work contributes to the organization’s success is a common-sense place to start. All individuals want to feel appreciated, and small acts of recognition go a long way in inspiring employees to perform.

Handwritten thank-you notes, verbal praise in public, and inexpensive items like movie tickets, flowers, and lunch coupons are all meaningful gestures. Paid time off is also an inexpensive and highly valued reward for many employees.

Another cost-effective idea is to piggyback employee incentives on customer promotions. For instance, if a promotion awards a customer with a trip, give frequent flyer miles to the employee who demonstrates an exceptional level of performance during the promotion. Not only is this recognition inexpensive, but it can heighten employee excitement about the promotion. 

No matter the size of the reward, the key is to make every recognition occasion special.

Avoid the one-size-fits-all incentive

Selecting the perfect coffee mug isn’t always the answer. To be truly effective, rewards must be tailored to individual priorities and values. It’s equally important to recognize employees for work performance that’s important to them.

For example, employees that are motivated by being the best in their field may respond to the types of recognition that furthers their development. Companies can reward these individuals and inspire their performance by sending them to seminars and conferences.

Employees are usually happy to tell you what motivates them. A brief assessment can help determine what motivates each employee and how each individual views his or her work. This information is also helpful in adapting communication styles to fit the individual and inspire each one’s optimum performance.

Some organizations ask employees to draw up lists of rewards that matter to them, or allow them to choose their own rewards from a variety of incentives. In any event, every reward should be appropriate to the achievement, and the reasons for any recognition should be clearly communicated.

Keep in mind that the best reward programs are aligned with organizational goals. Traditional programs may recognize sales increases or customer satisfaction, but a better program for your company might be one that awards employees for creating ideas and achieving team initiatives. Instead of just rewarding best performers, consider structuring a program to also reward performance improvements.

Whatever the business strategy, design a recognition program that will motivate the kinds of skills and talents needed to achieve success.