How To Incentivize Employees For Better Performance


For any company to succeed, it is important that employees are completing all their tasks with both efficiency and quality. One way that organizations can do this is by giving incentives to promote better performance.

This can be a great way to do so as research from Frontiers in Psychology found a positive correlation between the two. Workers who were given incentives for quality work had an increase in performance and productivity.

Having a reward system also became motivation for other employees, boosting morale and even encouraging better management from organization leaders. It is important to note, however, that a good strategy should be set in place so workers are given what they are due and don’t feel like they are being forced to exceed expectations.

Companies should be able to strike a balance between giving rewards to hard workers, without alienating those that are still working on improving.

Here are what organizations can do to incentivize employees to boost performance:

Foster A Sense Of Intrinsic Reward

Firstly, a good foundation for incentivization is helping employees feel fulfilled in all areas of their work. Even if they are not exceeding goals, they should still feel like they did a good job. One way to do this is by fostering a sense of intrinsic reward. 

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LHH’s article on rewarding employees notes how these intrinsic rewards, or the good feelings people get from doing the work, manifest as enjoyment associated with completing tasks, excitement about new opportunities, and immense satisfaction in doing a good job.

Reminding workers that they are valuable and that their work is worthwhile can do a world of good in helping foster satisfaction. If they are still working on getting better within their roles, providing encouragement will build a sense of security, motivating them to continue honing their skills.

If employees feel like the work they do matters and find fulfillment in their roles, they will continue to try and increase their performance.

Recognize Effort And Progress

It is clear that no worker is good right off the bat. When employees are underperforming, they need guidance from management on how they can do their work better. But after a while, this can get demotivating if their effort goes unnoticed.

Our past write-up on “how to hold someone accountable” explains that companies should give these workers feedback and set clear expectations. Over time, they will be able to set visible milestones toward becoming a top performer within their organization.

It is important for companies to recognize this effort as a way to motivate their employees. Simple words of affirmation such as “good job” or “you’re doing so much better” can serve as a validating reward for employees who are striving to do their best. This ties in with fostering a sense of intrinsic reward, as workers will feel happier with the effort they put in to become better performers within their organization.

Give Performance-based Bonuses

One of the most common incentives given by organizations are performance-based bonuses. These are monetary rewards offered to employees for meeting certain criteria outside of what is already expected from their roles.

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One study from Administrative Sciences, a peer-reviewed journal on organizational studies, found that bonuses can become a motivation for employees to work hard in their roles, as well as become more responsive to the comments of management.

An example of these rewards can be a marketing professional generating more leads than the target quota, or a salesperson making more sales than they needed to. Organizations can set goals of what an employee should meet and what merits a reward.

This way, workers will have a clear view of what it means to perform well and how they can meet this standard.

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Update Reward System As Needed

While performance-based bonuses are certainly an effective incentive to boost employee performance, many workers might want to be rewarded in other ways. This is why it is important for an organization to update its reward system as needed.

It will not only meet the needs of their workers, but also show that they are listening to what their employees want. Instead of bonuses, some workers may want increased days of paid time off.

Others might instead prefer more engaging activities such as company-sponsored trips for top performers. By adapting their reward system to their employees, companies will be able to see greater willingness to exceed goals, without losing morale and motivation.

This can also provide a concrete way to incentivize different amounts of effort being put into exceeding performance goals.

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