1 Align incentives and rewards with your strategy

Before you decide what kind of incentives and rewards to offer, you need to clarify your strategic objectives and how they relate to your workforce's performance. What are the key results and behaviors you want to encourage and recognize? How do they align with your mission, vision, and values? How do they support your competitive advantage and differentiation? By aligning your incentives and rewards with your strategy, you can ensure that they are relevant, meaningful, and consistent for your workforce.

2 Know your workforce's preferences

Not all incentives and rewards are equally appealing to everyone. Different employees may have different preferences, motivations, and expectations when it comes to recognition and appreciation. Some may prefer monetary rewards, such as bonuses, commissions, or stock options. Others may value non-monetary rewards, such as flexible work arrangements, career development opportunities, or public recognition. To know what your workforce wants and needs, you need to ask them. You can use surveys, focus groups, interviews, or feedback tools to gather their opinions and preferences. You can also segment your workforce by demographics, roles, skills, or performance levels to tailor your incentives and rewards accordingly.

3 Offer a variety of incentives and rewards

One size does not fit all when it comes to incentives and rewards. You need to offer a variety of options that cater to different preferences, motivations, and situations. For example, you can offer a mix of individual and team incentives, short-term and long-term incentives, financial and non-financial rewards, and formal and informal recognition. You can also use different criteria to determine who gets rewarded, such as results, behaviors, skills, or values. By offering a variety of incentives and rewards, you can increase the chances of satisfying and engaging your workforce.

4 Communicate clearly and frequently

Communication is key to making your incentives and rewards effective and transparent. You need to communicate clearly and frequently what the incentives and rewards are, how they are determined, who is eligible, and how they are delivered. You also need to communicate the purpose and value of the incentives and rewards, how they relate to your strategy and goals, and how they benefit your workforce and your organization. By communicating clearly and frequently, you can ensure that your workforce understands, trusts, and appreciates your incentives and rewards.

5 Evaluate and improve your incentives and rewards

Incentives and rewards are not static. They need to be evaluated and improved regularly to ensure that they are still relevant, effective, and fair. You need to measure and monitor the impact of your incentives and rewards on your workforce's performance, engagement, satisfaction, and retention. You also need to solicit and act on feedback from your workforce, managers, customers, and stakeholders. You need to identify what works well and what needs improvement, and make adjustments accordingly. By evaluating and improving your incentives and rewards, you can ensure that they are always aligned with your changing needs and expectations.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?