But in the same breath, they'll agree that, done the right way, incentives can play a large role in keeping employees inspired and motivated. In just one example, 78% of employees surveyed by Globoforce.com said that being recognised motivates them in their jobs.
(A caveat is that done the wrong way, incentives can be a powerful force for disengagement.)
Some of the attributes of effective incentive systems include:
The system should offer multiple communication channels to employees:
Immediacy is critical to effective rewards systems and includes:
Choosing a reward is fun; fun is an aspect of an incentive system that shouldn't be underestimated. Incentive systems often use points as a rewards currency that can be exchanged for tangible items such as airtime, vouchers or even cash.
Some systems cater for non-tangible rewards such as "coffee with the CEO", while allowing such rewards to be swapped for donations to charity!
To achieve tax neutrality, the system must report the rand value of rewards assigned during the month.
The payroll system then increments the employees' salaries an amount sufficient to pay the tax that is due as a consequence of the rewards.
We know of a company that implemented a manual incentives scheme; managers were allocated a budget for cash-incentives, but were required to email confirmation of awards to HR and payroll.
Not unexpectedly there were cases where they forgot to do so and the unlucky employees were obliged to go back to their managers awkwardly having to remind them.
Incentives can form a significant portion of employee costs. Whatever system is chosen, it should have:
While the most important source of recognition is one's boss, a significant number of surveyed employees emphasise the importance of recognition by their peers.