X icon white, transparent background.
X icon white, transparent background.
Surveys & Engagement

10 employee incentive programs to engage people & unlock their potential

Leapsome Team
10 employee incentive programs to engage people & unlock their potential
Build a high-performing and resilient organization with Leapsome
Request a Demo

If your organization has implemented less-than-successful incentive programs in the past, don’t think of it as a sign that incentives don’t work. A couple of issues could have been at play:

  1. You didn’t have the correct goals or metrics in place to measure the success of your incentives.
  2. You didn’t offer the right incentives.

For instance, many companies focus too much on providing short-term monetary incentive programs to increase productivity. However, these kinds of rewards can actually have the opposite effect and make work feel more transactional than inherently meaningful and valuable.*

Organizations that aim for more long-term results should be deliberate about identifying the incentives their employees really want and making sure to offer various options. To provide some inspiration for your own incentive programs, we’ve assembled a list of ten innovative and effective benefits you can provide for your team to make them feel appreciated and empower them to grow. 

*SHRM, 2023

What is an employee incentive program?

An employee incentive program is a structured, strategic plan that companies put in place to encourage team members to perform at their best and motivate them to meet specific targets, objectives, or milestones. However, as organizations around the world adopt hybrid and remote work models, incentive programs can also serve to spur productivity, combat isolation, and reinforce a healthy workplace culture for dispersed teams. 

Similar to rewards and recognition programs, employee incentive programs often include:

  • Monetary rewards, such as raises, bonuses, profit-sharing schemes, or stock options.
  • Non-monetary rewards, such as flexible work hours, professional development opportunities, peer-to-peer recognition, and events or retreats. 
  • Performance-based rewards, which may include incentive compensation. That’s defined as a kind of pay that’s connected to a specific employee achievement, like spot bonuses and sales commissions. Performance-based rewards can also encompass non-monetary rewards like company trips or career training.
An infographic that showcases a selection of six incentive program ideas.
Organizations should use a combination of monetary and non-monetary incentives and ensure they’re relevant to employees’ roles and interests

The importance of employee incentive programs

52% of the employees we surveyed in our 2023 State of People Enablement report said they’d stay in a position if the culture prioritized feedback, goal-setting, and learning. Therefore, it’s vital for organizations to realize how significant incentive programs can be in terms of holding onto top talent and staying resilient amidst economic changes.

A people-centric employee incentive program that takes team members’ needs and interests seriously can yield:

  • Increased retention rates — According to recent Gallup research, 59% of employees said they were attracted to new roles that significantly increase their income and benefits package. This suggests that connecting incentives to company benefits could be a powerful way to reduce churn and attract the best candidates to your organization.

  • Higher levels of engagement and satisfaction — Proper incentives allow you to develop a culture of recognition and make team members feel valued. According to a study from Gallup and Workhuman, when employees receive adequate recognition, they’re four times more likely to be engaged.
  • Enhanced productivity — Alongside the tangible rewards that team members receive as part of incentive programs, the feelings of appreciation that accompany them can also yield positive business outcomes. Deloitte research shows that productivity and performance are 14% higher in organizations that prioritize employee recognition. 
🔥 Fire teams up with powerful incentives

Leapsome’s Compensation module helps managers make data-driven decisions so they can offer the right incentives at the right times.

Learn more

Choosing employee incentives that suit your business

Like most other long-term organizational strategies, effective incentive programs should be ongoing, dynamic processes that get refined continuously. When considering the incentives you want to implement within your company, keep these four things in mind:

  • Employee feedbackEngagement and satisfaction surveys are great tools for discovering what incentives team members would appreciate, especially if you keep participant identities confidential to spur candid responses. Still, there are a few other methods you can use to collect team member input, such as manager-led one-on-one meetings or an anonymous Q&A board where people can ask challenging questions and receive honest answers from leadership.
A screenshot of Leapsome’s Q&A board feature within the Instant Feedback module.
Leapsome’s Q&A board feature allows employees to ask the more difficult questions anonymously and get answers from leaders
  • Company goals — What specific results are you hoping to see from your program? For example, the particular objectives that inform your retention incentives might be to reduce your turnover rate, increase engagement, and enhance employee satisfaction.
  • Budget — As a best practice, review your company budget first to determine how you can best distribute resources for monetary incentives like bonuses and raises. Also, consider the return on investment you’re hoping for when deciding how to approach your incentives strategy.
  • Monitoring — Continuous tracking can help determine where incentives are ineffective. Be sure to measure performance and engagement results before and after you implement your incentive program so you can assess what’s going well and where you need to improve. 

10 employee incentive programs to energize your teams

While creativity is indispensable to the process of incentivizing people, there are so many options that have been tried, tested, and studied by organizations that want to recognize their employees and drive performance and engagement. Here are ten of our favorite examples.

1. Transparent career growth frameworks

When we surveyed employees about engagement for our 2023 report, 53% of them said transparent compensation and promotion frameworks made them feel motivated about their work. That’s likely because career road mapping gives team members a clear picture of the skills they need to hone before progressing professionally. It also allows them to identify available growth opportunities, so they won’t need to worry about stagnating or looking for roles elsewhere.

Creating a career growth framework involves defining responsibilities and skills for every position within your company. It’s also an important tool for combating bias and unfair compensation based on factors like gender, race, or sexual orientation, especially if, like 16% of employers, you currently lack confidence in your salary data. Committing to pay equity is a strong signal to staff and candidates that the company takes this matter seriously. To implement a framework at your organization:

  • Evaluate the success of your current growth framework if you have one. Do employees understand how it works and know what’s expected of them to advance?

  • Determine what’ll make your new framework successful. For example, do you want to see a decrease in turnover and higher engagement rates?

  • Create a roadmap for different types of roles. Independent contributors who aren’t interested in becoming managers should also have the option to move into more specialized roles.
  • Make the connection between growth and compensation clear — Use a tool like Leapsome’s Compensation module to make this effortless. Our module can sync with your career frameworks and allow you to keep track of all team members’ salaries, so you can easily compare and analyze that data internally.
A screenshot of an interface from Leapsome’s Compensation module.
Leapsome’s Compensation module empowers leaders to make unbiased decisions around promotions and pay

2. Special professional development opportunities

Development opportunities help build employees’ confidence in their skill sets, are intellectually enriching, and strengthen people’s ability to withstand turbulent and changing job markets. Investing in relevant learning opportunities can also allow you to create a more skilled employee base and better position your organization to promote from within, which is both beneficial for company culture and cost-effective.

With the right tools, you can even generate special development opportunities in-house and make courses and training materials laser-focused on your organization’s top needs and priorities. To identify needs gaps and create more individualized opportunities for employee growth, you can:

  • Review data from exit interviews to see how previous development opportunities may have fallen short.
  • Conduct stay interviews to get honest feedback about current employee development needs.
  • Ask managers about competency gaps. What soft or hard skills would make teams more effective?
  • Examine previous performance data to identify widespread trends or patterns throughout your organization.
A screenshot of an interface from Leapsome’s Learning module.
Leapsome’s Learning module is ideal for companies that want to customize their own interactive, multimedia employee training opportunities

3. Performance bonuses

Respondents to a WorldatWork survey revealed that, in 2021, 38% of organizations were utilizing some form of performance bonus to stay competitive in an increasingly tough labor market. That’s not surprising when you consider how valuable performance bonuses can be in helping teams meet specific goals. Common types of performance bonuses include:

  • Spot bonuses — Businesses usually award these unexpectedly after employees meet an objective.
  • Profit-sharing bonuses — Companies award team members a specific percentage of their profits within a given period.
  • Annual bonuses — Employees typically receive these for accomplishing performance goals throughout the year.
  • Task or mission bonuses — Teams or individuals may obtain these after completing a large project or attaining a significant milestone.
🔎 While bonuses can be powerful motivators, they can also have the reverse effect if companies fail to be transparent about the criteria employees need to meet to receive them. That’s why it’s important to use performance review software and goal-management solutions like Leapsome to connect bonuses and rewards with clear assessment metrics.
A screenshot of a competency profile from Leapsome’s Reviews module.
Leapsome’s Competency Profile encapsulates 360-degree feedback from Reviews for fairer compensation decisions

4. Employee recognition programs

While tangible monetary and non-monetary rewards can encourage team members to stay with your organization and deliver great results, employee recognition allows team leaders and colleagues to specify why individuals stand out and make an impact.

It’s worth asking what makes recognition such a powerful strategy for enhancing staff motivation. Based on 2016 Gallup research, recognition matters most to employees when it’s honest, authentic, and individualized. That means team members should:

  • Make feedback relevant to people’s roles and objectives — Consult performance review data or competency frameworks to discover what skills or competencies they’re trying to build. Then, structure your positive feedback around that information.

  • Use all the communication channels at your disposal — Instead of waiting for an annual awards ceremony, celebrate employee wins on social media platforms and in internal Slack chats or regular newsletters.

  • Promote peer-to-peer recognition — Team members need to consistently exchange praise and perspectives with their colleagues to uphold an authentic feedback culture, as well as boost collaboration and teamwork.

  • Use software to make recognition easier — The Praise Wall feature within Leapsome’s Instant Feedback module allows team members to publicly celebrate each other’s accomplishments and connect them with specific values and competencies.
A screenshot of the Praise Wall feature within Leapsome’s Instant Feedback module.
Leapsome’s Praise Wall feature is one tool you can use to build a culture of appreciation and recognition

5. Flexible work hours & schedules

The ability to control their schedules is so important to employees that almost one-fourth — 22% of respondents in one study — agreed they’d consider looking for other opportunities if their companies stopped offering flexible working arrangements. This suggests that flexible work hours are steadily becoming less of a fringe benefit and more of an essential incentive.

However, if your organization follows a fully remote model, how do you position flexible schedules as an incentive? To start, ensure that all team members understand what flexibility means. For some companies, it means that employees can create their own schedules as long as they accomplish their tasks. For others, it means that staff can slightly adjust their hours as long as they’re online for certain periods of the day. 

Keep in mind: Flexible work hours won’t inhibit teamwork if you use the right technology. For example, our Goals module helps you create clear priorities and expectations and assign ownership to stakeholders for better collaboration. Additionally, our Meetings module allows you to create structured meeting agendas, take notes, designate action items, and receive automated reminders so you get the most out of the time your dispersed team has to work together. 

A screenshot of an interface from Leapsome’s Meetings module.
Leapsome’s Goals and Meetings module helps organizations align on their key initiatives and cooperate more effectively

6. Extra time to recharge

While paid time off (PTO) is a basic necessity for all working people, thinking outside the PTO box can help you avoid burnout, decrease turnover, and stay competitive in the job market. For example, while unlimited PTO is becoming an increasingly popular approach in modern workplaces, only 8% of companies offer it, according to a 2023 SHRM study.

However, unlimited PTO isn’t the only option. You can experiment with offering extra “floating” vacation days on top of the regular allotment or allowing team members to take Friday afternoons off during the slower summer months.

Before you update your policy to make PTO more of an incentive, review your leave data to see how many days off employees take on average. If it’s less than 50% of the allotted time, for instance, extra PTO may not be a strong motivator for your current team. In that case, managers should first nudge their reports to take a vacation or book some personal time and investigate why people aren’t taking sufficient time off. 

7. Personal & professional development stipends

As an alternative to providing development opportunities in-house, companies can also offer professional development stipends and empower employees to seek out resources on their own. At Leapsome, for instance, we offer team members an annual professional development budget for personal coaches, conferences, and expert resources, and there are a few ways your organization can implement something similar. For instance:

  • Fund college tuition or continuing education programs
  • Provide an annual stipend that can only be used for training courses, conferences, learning materials, and seminars
  • Give reimbursements for skills development courses up to a certain amount per year
  • Offer a learning budget with a tool like Learnerbly, which lets leadership allocate a certain amount for every team member to spend on resources within the platform

8. Profit-sharing schemes & stock options

While these two types of compensatory rewards can encourage employees to meet certain business outcomes and stay with the company, profit-sharing and stock options have distinct features.

In a profit-sharing scheme, an organization distributes a portion of its profits based on a specific allocation formula. Many employers use the comp-to-comp formula, in which they divide a single employee’s compensation by the sum total of all employees’ compensation. Then, they multiply this percentage by the total profit amount to determine what cut each team member should receive.

With stock options, companies offer employees the choice to buy shares at a pre-set price. If team members decide to purchase them, the stock options act as another incentive to move the business forward and gradually raise the price of company stock. 

9. Referral bonuses

A referral bonus is a cash reward that organizations offer to employees who help fill an open position with a recommended applicant. To receive the bonus, candidates typically have to get hired and work for the company for a certain time. 

If you’re thinking of starting a referral program, proceed with caution — they can help you find great new hires, but you need to design them carefully. According to a 2014 Social Science Research Network study, people have a tendency to refer candidates who are similar to them, which could harm a company’s efforts to build a more diverse and inclusive workplace. This reveals how important it is for your people ops team to create a set of diversity, equity, and inclusion goals and objectives for recruitment.

10. Annual company retreats

Many companies hold annual retreats in order to connect employees who are separated due to virtual work, create a sense of camaraderie, and stimulate creativity in a fresh setting. To make your retreat memorable as well as useful for ideation and collaboration:

  • Get employees involved. If you forget to include team members in the planning process, your event may end up not suiting the mood and requirements of your team. For example, if the company is predominantly made up of people that are non-drinkers, a retreat that is focused on drinking and partying might make many people feel uncomfortable and have the opposite effect you were hoping for. A great way to measure sentiment and preferences is by running a survey before you start planning.

  • Dedicate time to professional development. Mix fun with learning, and include workshops, guest speakers, or skill-enhancement sessions as part of the retreat.

  • Build in time for team bonding. While company retreats shouldn’t be all about forcing group activities, remember that employee interaction is one of the most important and valuable parts of getting the whole team together.
👂 Make employees feel heard 

Leapsome’s Surveys module makes it easy to get the data you need to provide the incentives employees actually want.

Learn more

Reward employees for a job well done

Considering the abundance of incentives that even companies with minimal budgets can implement, there’s no reason you can’t design a program that’ll engage and motivate your team members. A win-win scenario is possible for your business and your people as long as you regularly refer to employee feedback, revisit your goals, and track the success of your incentives. 

With Leapsome, this process doesn’t have to be overwhelming. Our Surveys module helps teams collect quantitative and qualitative data to design people-centric incentives. Then our Compensation module offers automated workflows and insights into performance review data that help employers make easier and better incentive decisions. Automated recommendations mean that our platform is ideal for teams that are new to setting up performance bonuses and incentive compensation.

🤝 Ensure all employees get a fair shake

Leapsome’s user-friendly Compensation module makes incentive decisions easier and more equitable with templates, workflows, and automated recommendations. 

Book a demo

FAQs about employee incentive programs

1. How do you structure an incentive program for employees?

To structure an effective incentive program for employees, you should:

  • Start by identifying your objectives. For example, are you looking to increase productivity or spur innovation? Your goals should inform the incentives you choose.

  • Determine the key performance indicators (KPIs) you’re going to use to measure the success of your incentive program. These could include metrics like retention rates, deadline completion rates, or sales revenue.

  • Narrow down reward criteria and share them with everyone. What do employees need to do to earn certain incentives?

  • Choose incentives that employees appreciate. Meaningful rewards include flexible working hours, extra paid time off (PTO), cash bonuses, or career development opportunities.

  • Continuously review and improve. Conduct surveys and ask for employee feedback on your incentive program. 

2. What are three types of incentives?

The three main types of incentives are monetary, non-monetary, and performance-based rewards. Here are some examples of each:

  • Monetary incentives — These may include raises, bonuses, profit sharing, and stock options. They might be connected to performance or included in an employee’s compensation package.

  • Non-monetary incentives — Flexible work hours, extra paid time off (PTO), learning and development opportunities, and employee recognition all fall into this category.

  • Performance-based incentives — These can be monetary or non-monetary, but their purpose is to motivate team members to meet specific objectives or targets. Examples include performance bonuses or incentive trips for high-performing teams. 

3. What is the difference between an incentive program and a bonus?

An incentive program is an ongoing strategic plan that companies put in place to keep employees motivated and engaged in the long term. They make use of monetary incentives like bonuses and raises along with non-monetary rewards like flexible hours and training opportunities. 

Bonuses themselves are only one tactic businesses implement as part of their strategic incentive programs. Depending on the objectives of your incentive program, bonuses may be effective motivators, but they shouldn't be the only component.

Written By

Leapsome Team

Written by the team at Leapsome — the all-in-one people enablement platform for driving employee engagement, performance, and learning.
See Leapsome in action
Take a quick tour

Ready to upgrade your people enablement strategy?

Exlpore our performance reviews, goals & OKRs, engagement surveys, onboarding and more.

Image of a woman in a circleRequest a Demo TodayImage of a man in a circleImage of a woman in a circle

The #1 rated HR platform for people enablement

Schedule a demo to find out why leading companies choose Leapsome, the intelligent HR platform that empowers managers to develop, align, and engage their teams.

  • Get AI-powered recommendations 🪄
  • Save countless hours with automations ⏱️
  • Learn from industry best-practices and benchmarks 📊

1,600+ forward-thinking companies choose Leapsome

Schedule a demo

Our friendly team will be in touch right away!


Mitarbeiter entwickeln mit Leapsome

Stärken Sie Mitarbeiter-Engagement und Erfolg Ihres Unternehmens - wie andere führende Marken.

Interesse an Leapsome?

Unsere Produktexperten zeigen Ihnen gerne unsere Plattform oder eröffnen einen Account.

Purple transparent inverted identification card icon.
Purple transparent inverted mail icon.
Light purple and inverted ringing phone icon.
Purple transparent inverted employees icon.
Oops! Something went wrong while submitting the form.
Erfahren Sie warum Leapsome mit
4.9 / 5 auf G2 und Capterra bewertet wird.