Says benefits consulting practice Twenty Twenty, employee incentives form an important part of overall employee satisfaction. So, incentivising employees is smart. Here’s why:
- Employee incentives attract, and help retain, quality staff
- Reduced staff churn (employee turnover) means reduced costs associated with recruiting and training new staff
- Improved employee morale, a result of feelings of satisfaction through recognition of efforts, boosts organisational performance.
Employee incentives can be monetary – like staff bonuses – or non-monetary – like offering flexible work arrangements. For ideas on how you can incentivise your workforce, read on…
1. Pay a Market-related Basic Salary
As the saying goes, if you pay peanuts, you get monkeys. In other words, lesser wages will attract lesser workers. Always pay staff members a fair, going rate for their services. Not paying a market-related wage will leave staff feeling undervalued, which may develop into resentment and disgruntlement and, ultimately, high staff turnover. To assess how the wages or salaries you’re offering compare against industry standards, consult a salary survey such as:
2. Employee Health Insurance (Medical Aid)
Health Insurance is one of the most sought-after employee incentives in South Africa, with all the major medical aid schemes offering Group Plans for companies. The employer can choose to pay the employee’s full medical aid subscription or a percentage contribution, with the rest being deducted from the employee’s salary.
- For more information on medical schemes in South Africa, visit the Council for Medical Schemes website.
3. Pension Scheme, Provident Fund or Staff Retirement
Group retirement plans are also very attractive employee incentives, and their purpose is to provide employees and their dependants with an income after retirement. There are three general types of retirement savings schemes:
- Pension fund – up to a third of the retirement benefit may be taken as cash upon retirement, with the remaining two thirds to be paid out monthly. Pension funds are tax deductible (up to 20% of the contributions made for the employee). Both employers and employees make contributions towards the fund.
- Provident Fund – the entire retirement benefit may be taken as cash upon retirement, or when leaving the employ of the firm. Provident funds are not tax deductible. Both employers and employees make contributions towards the fund.
- Retirement Annuity Fund – this is a retirement savings fund used by the self-employed, or by companies who wish to supplement their staff’s pension or provident funds. Contributions are tax deductible, up to a limit.
4. Thirteenth Cheque
A thirteenth cheque is an attractive incentive for workers. Traditionally paid at the end-of-the year, a thirteenth cheque is a gratuity for hard work during the year. While many companies offer thirteenth cheques via inclusion into conditions of employment, others offer discretionary bonuses (i.e. at the discretion of the business owner or manager, and not part of a contract of employment) comprising a certain percentage of the annual salary, paid either at the end of the year, or during the employee’s birthday month. Staggered bonuses – whereby a bonus is split into two-four payments throughout the year – are increasingly popular.
5. Individual Performance Bonus
Individual performance bonuses are discretionary and are related to an individual’s performance – awarded to staff members whose performance consistently exceeds company standards. Individual performance bonuses are a good way to spur on high-achievers, who enjoy working independently.
6. Group Performance Bonus
A group performance bonus is related to the performance of a group, whether it’s a department or the company as a whole. So, for example, if your company exceeds x amount of turnover, you may reward each member of your team with a cut of the takings. Group performance bonuses encourage staff members to work together, as a team.
7. Production Bonus
Rather than benchmarking performance to company standards, you might like to incentivise production teams for exceeding production targets. This employee incentive works particularly well in a manufacturing or production environment.
8. Staff Training
The annual Careers24 Salary Survey highlights trends in the South African labour market. One of the issues the survey cites is the failure of companies to invest in skills development, even though employees themselves regard training as a key motivator. Providing career development opportunities and ongoing training is crucial in incentivising employees to invest their futures in your organisation.
9. Corporate Wellness Programmes
It’s plain common sense – a well workforce is more productive than one which is unhealthy, unwell or diseased. Corporate wellness programmes aim to promote health and wellness in the workplace through interventions like health risk assessments, biometric screenings (such as cholesterol, blood pressure, blood sugar and body mass index), vaccinations and lifestyle management programmes (help with quitting smoking, nutrition, exercise and weight management). An attractive employee incentive is a subsidised gym membership.
10. Flexible Work Arrangements
If you can’t afford to attract top talent by offering a top-notch pay package, try offering flexible work arrangements instead. For some workers, being able to work flexitime – or even telecommute (work from home) – can prove to be an even greater incentive than cash. These employees enjoy having a greater degree of flexibility which allows them to achieve a better work-life balance. Not everyone functions well as a flexitime worker or telecommuter, though – these privileges work best amongst disciplined, self-motivated and independent workers.
11. Staff-centric Working Environment
As a small business owner, perhaps you don’t have the funds to compete with the pay packages bigger companies can offer their employees. According to Business Link, the UK Government’s online resource for businesses, pay and financial benefits are not the only motivators. Catering for the needs of your staff and recognising their achievements can go a long way in keeping employees happy and motivated. Consider implementing these low-cost staff incentives at your workplace:
- Offer staff discounts on your products and/or services
- Provide free food – like pizza or cake – on random days
- Send employees handwritten thank-you notes for jobs well done
- Implement a casual dress code on Fridays
- Award VIP parking privileges for a month to outstanding employees
- Reward employee achievements with small tokens of appreciation, like movie tickets or spa vouchers
- Give half-days off on birthdays
- Go on employee field trips – close the office for an afternoon and do something fun together, like watching a movie, going ten-pin bowling or having a braai
- When there’s an important sports match on during office hours, organise access to a television so that staff (who are up to date with their work) can watch the big game.