Productivity is like a river stream – it ebbs and flows.

It is impossible to maintain the same level of productivity all the time; there are too many factors that influence our mindset and ability to work.

From the level of sleep we get to the magnitude of stress we’re under, we work under a dynamic environment, which can have both productive and destructive effects on our psyche.

The same goes for the working of an organization, where individual employees or an entire department may struggle to be productive.

If you’re thinking about effective methods to motivate your workforce, giving monetary incentives is one such approach.

But is it always effective? Or are there any pitfalls concealed under this concept that you need to address?

Let’s find out.

Do Monetary Incentives drive productivity?

The answer is yes, and no.

As per a survey, 85% of employees acknowledged that they were motivated by monetary incentives.

While on the surface, monetary incentives seem to work wonders for an organization. If we go deeper, we’ll find that there are specific pros and cons attached to this approach too.

The fact is that any motivation program can only have a time-bound effect on your employees. If you’re overdoing it, then your workforce will stop getting motivated and become slackers once again.

As incentive programs only work for the short term, they can encourage unhealthy competition within your organization – making a group of customers feel hopeless and resentful.

Ergo, it’s essential that you only use incentive programs creatively to increase employee engagement for a specific period.

Ensure Employee Engagement with Monetary Incentive Program

Understanding that many factors can increase employee engagement is the primary step to implement an effective employee incentive program.

At the fundamental level, there are two main factors:

• Positive reinforcement or incentives
• Negative reinforcement or disincentives

The traditional wisdom is to give your workforce the right combination of incentives and disincentives, to get the most out of them.

Famous author and motivational speaker, Stephen R. Covey expressed this view: “The great jackass theory of human motivation – carrot and stick.”

The quote reflects that if you treat your workforce as animals, it works only temporarily. Even if it pushes them to complete an objective, they will do it only to evade a situation instead of doing it to achieve business growth.

The quote is on point as success in the modern economy requires a workforce with creative freedom and decision-making skills.

In today’s scenario, where unemployment rates are falling, your employees can readily find places that reward their diligent work in the way they want.

A monetary incentive program conveys to your employees that your firm understands what truly motivates them and is willing to provide it.

What makes Monetary Incentive Programs successful?

Certain workplace conditions minimize dissatisfaction, while some factors build on a foundation and enhance satisfaction.

If you meet your employees’ basic needs, it will reduce dissatisfaction. It can include:

• Adequate compensation
• Workplace safety
• Benefits

To increase employee satisfaction, you need to consider factors such as work-life balance, workplace diversity, and a healthy work environment.

By understanding the difference between satisfaction and dissatisfaction, you can pinpoint the requirements for developing a successful monetary incentive program for your employees.

What are the types of Monetary Incentives you can use?

When creating an incentive program to drive employee engagement, remember that rewards alone can’t guarantee loyalty or quality work.

Here are the types of monetary incentives you can use:

Bonuses
Bonuses are a common way to reward your employees. It can include individual bonuses for completing sales objectives or team bonuses for completing a project on time.

Contests
You can offer an additional prize or reward to a person or team with the highest level of production. Otherwise, you can also provide cash prizes for your employees to give valuable suggestions.

Profit-Sharing
It includes giving a portion of the profit to your employees based on their position, time, and role in the company. Profit-sharing is a practical approach to give your employees a sense of ownership in the success of your firm.

Piece Rates
To reward your employees in production positions, you can reward them with a certain amount of money for every piece they produce. It will drive them to work quickly to earn more rewards.

Pay Raises
You can also offer pay raises to your employees to reach a certain production level, or to complete a training program, or for staying loyal to your company for a long time. Such raises motivate your workforce to enhance their performance levels and become loyal to your company.

Takeaway

Your monetary incentive programs can achieve success when they support business objectives. Check out the employee incentive programs by NextBee, and work alongside our stellar team to ensure success.