How To Run A Good Incentive Program

Incentive plans are formalized approaches to offering rewards and recognition to employees for meeting pre-aligned objectives. Incentives could be in any form like cash, vacation, gift cards or any other product or service. To be effective, incentives must be clearly defined and considered a viable and valuable reward for the required work.

Importance of incentive plan:

  • Motivational Tool: Incentive programs motivate employees to push and challenge themselves to achieve higher degrees of productivity. This ultimately translates to increased revenues and thus profits for our company. When incentive plans are in place, employees recognize that, that extra effort on their behalf will be acknowledged and rewarded.
  • Morale Booster: Incentive plans have the potential to raise morale and increase job satisfaction in a company. Employees see a direct correlation between their effort and their earning potential. Higher workplace morale lead to decreased employee turnover, which saves us money associated with recruiting, hiring and training new employees.
  • Increased Service Levels: Employees striving to meet the stretch goals of an incentive plan may provide higher degrees of service to our customers. This can encourage repeat business and improved customer satisfaction.

Essentials of incentive plan:

For an incentive program to be effective, goals and objectives should be clearly defined for our employees. While these are extremely important topics, we tend to miss one key element – how to market the program to employees a.k.a. “internal customers”. If we want our incentive program to run smoothly, our participants need a clear understanding of the details. The last thing we want to hear is that “I have got some extra money this month, but don’t know what this is for”.


Tips to sharing the incentive program with the participants:

  • Launch It: We can look at launching it in critical meetings like National Sales Meet or Annual Kick Off Meet and include the messages from the top management showcasing their commitment or support towards the program.
  • Generate Quality Communication: If we want to be understood, we have to make sure that our communication is top quality. There should be open discussions on targets, timelines, incentive criterions, amongst others. We need to build excitement behind it making it inclusive for the employees.
  • KISS (Keep It Super Simple): We should make it easy for everyone to understand and stick to communicating the essentials without any ambiguity. There should be nothing left for them to imagine and comprehend in the way they want.
  • Make Clear and Measurable Expectations: We need to explain the new guidelines, how the progress will be measured, the available support systems such as training or resources, and other necessities. The communication tools could be Apps, website link, SMS, WhatsApp amongst others. We need to be clear about “What’s In It For Them”. If everyone understands the ways your program benefits them, whether through recognition, a prize or reward, they will be much more likely to act.
  • Periodic Reviews: We need to keep the conversations going through periodic reviews and updates. Leader boards helps foster competition and push people to want to win and enhances engagement.
  • Final Award Presentation: The final award presentation / recognition should also happen in an aspiring way. Again using all internal communication tools like Teams, Whats app groups, Company website among others should be used to announce the winners. This helps in motivating not only the current winners but also paves the way for future programs participation. Extremely critical are the points like timeliness of pay-outs and comprehensiveness of achievements, which eventually leads to demonstrate not only the transparency of the management but also reinforces the management’s commitment.
  • Get Feedback: Most of the time, we miss on this last but critical step. We can use surveys or anonymous feedback forms or any other form of collecting the feedback of the concluded program. This will help us refine our future roll outs.



Internal communication is vital for an effective and successful incentive program. Without it, confusion and apathy will run rampant, participants will lack motivation, and the program will be prone to failure. Generating quality communication by involving participants and offering a simple and refined message makes a big difference. If we want a good incentive program, clear internal communication is vital.


Topics: Sales Staffing & Management

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