Incentive programs are a great concept. Give employees something to work for, then watch their productivity soar! If only it were that simple. While many incentive programs are successful, many others fall short of their goal. The question, then, is what separates the two. What makes an incentive program succeed? We’ve found seven traits of incentive programs that actually work—developing these traits is crucial if you want to succeed.
Vision
Every incentive program must have a clearly defined vision. There are many different reasons to implement an incentive program. Many companies aim to increase productivity by a certain percentage or achieve a specific sales target. Other businesses look to increase employee loyalty or reduce employee turnover. Whatever it is, you must establish your vision before you can choose the right incentive program. The details of your program, the rewards you choose, and the requirements for winning will all be shaped by your end goal.
Attainability
For employees to be motivated, they must feel that their goals are attainable. Why would anyone try to win if they feel they don’t have a chance? To use an example outside of the business world, consider a student trying to improve their GPA. If they’re sitting at a solid 2.5 with two weeks left in their semester, it won’t do much good to try incentivizing a 4.0. They won’t be able to attain a GPA of 4.0, and the unattainability of the goal will be counterproductive. They will be discouraged rather than motivated. Similarly, an unattainable goal in incentive programs will only create frustration and discouragement. Employees need to feel that hard work could pay off. Select goals that are realistic enough to attain, but hard enough to make someone work to get them.
Clarity
Confusion is always an enemy of success. An incentive program is bound to fail if participants don’t understand the reward or requirements. A hazy, undefined goal won’t motivate anyone. Every employee needs to know exactly what they have to do to be eligible for participation. They must also have a clear vision of what the reward is and when they’ll receive it. The need for clarity also makes consistency important: don’t go changing up the requirements or rewards halfway through the year! And it’s not just employees who are eligible that need clarity, either. Management from senior level through to department managers needs to be able to articulate clearly what the program is as well as how their team is progressing toward that goal to keep motivation high.
Work-Based Reward
The flip side of an attainable goal is that it must also be based on skill and hard work. Incentive programs do not give out participation trophies! On the contrary, they encourage and reward hard work. Your reward must be one that will be received only by those who put in sufficient time and effort. Similarly, there should not be an element based on luck. Random drawings, for example, do not encourage hard work. If someone knows they can win whether or not they try their best, they may not feel the need to work very hard. The best incentive programs must be earned through hard work.
Trackable Progress
Successful incentive programs keep participants motivated throughout the entire process. One meaningful way to maintain motivation is by ensuring participants can track their progress. Employees should be able to see where they stand in the competition and monitor their progress toward the goal. This way, they’ll be encouraged by any progress and driven to step it up if they’re falling behind.
Micro-incentives
While a reward incentive is generally a bigger prize, such as travel to a new or interesting destination, small incentives can be baked into the program as a whole. For example, rewarding a monthly top producer with box seats to a sporting event can also sustain longer-term incentive programs. These micro-incentives help build momentum, boost motivation, and foster healthy competition.
Desirability
This is a critical element of any successful incentive program: there must be a desirable reward if participants don’t actually want the reward, good luck getting them to try their best! The most effective incentive programs are tailored to the specific needs and desires of the participants. Employee demographics will play a significant role in this: a workplace full of Millennials will likely require different incentives than one with a Gen X workforce. Employees will give their all if they are working toward something they truly want.
Conclusion
Incentive programs can be a great asset to your workplace. Done well, they can increase productivity, loyalty, and overall morale. If you develop these seven traits of successful incentive programs, you’ll be amazed at how effective your program can be.
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This article was last updated on June 12, 2025
