While incentive schemes are most often based on performance-related payments, there are other non-monetary approaches that can also work well, and we will look at some of these shortly.

First, we need to look at what types of role and employee can be incentivized. The short answer is almost all of them. While it may not be practical to incentivize a temporary employee, it should be possible for any permanent (full-time or part-time) employee to benefit from inclusion in an incentive scheme. Incentive programs certainly should not be for professional and executive staff only.

Monetary Incentivization

Monetary incentive schemes are perhaps the most widespread and popular way to implement performance-based reward schemes for employees. There is no debate about the value of the incentive, and the same type of reward can be appropriately offered to all levels of staff.

Most performance-related pay schemes are either target-driven, profit-sharing or both. Targets can be applied at individual, team, department and company or division level, and it is fairly common for both individual and department or division achievements to be taken into account when calculating reward payments.

Profit-sharing is another popular method of providing an incentive – given a suitable level of profit-sharing, employees should feel motivated to improve their and their organization's performance to help improve the overall profitability of their business in the short and long-term.

Stakeholder Schemes

Another way of providing a longer-term incentive to improve performance is to give your employees a stake in the ownership of the company. The most common methods for doing this are through stock options and through employee share ownership schemes. Both of these schemes are designed not only to reward employees, but to help foster long-term loyalty and motivation in employees – to receive financial benefit from such schemes typically takes several years from their award. These schemes tend to work well in industrial organizations with large numbers of long-term staff, for whom such schemes can form part of a savings strategy, and who will have an interest in the long-term success of their company.

Non-Monetary Reward Schemes

Some companies choose not to offer monetary incentive schemes, and instead offer a range of other options. Some of the most popular alternative incentives are:

·        Time-in-lieu;

·        Additional benefits;

·        Discounted goods or services.

Schemes like this are based on the understanding that monetary rewards are not the most attractive options for everyone. Some workers may appreciate a few extra days paid leave per year, others might benefit from discounted gym or childcare facilities, or additional pension payments. Another alternative that might be appropriate for some companies is to offer discounted or free access to the goods or services of that company. For example, a domestic furniture manufacturer may be able to offer heavily-discounted furniture to its employees as part of a points-based reward program.

How Do You Choose The Right Scheme?

Each business is unique, and there is no formula that will determine the most effective incentive program for your employees. When seeking to implement such a scheme, the best approach is to start by identifying your objectives for the scheme, and then looking at the target employees and considering what type of rewards might be appropriate – a survey of your employees might work well, allowing them to share in the process of designing the reward scheme. There are also specialist companies that will analyze your business and design a scheme for your business.

Don't be discouraged by the number of different possibilities – well-designed employee incentive schemes are proven to be effective in improving productivity and profitability and as such can pay back the effort that goes into them many times over.