How Incentive Plans Play a Role in Motivating Employees

Incentive plans form part of employee compensation that rewards employees for achieving targets set by the company. Long-term incentive plans go beyond a monthly paycheck – they’re a valuable form of recognition and appreciation for an employee’s contribution to the company’s growth and success.

The psychology behind granting incentives to employees

Incentive plans motivate participants to achieve targets and feel a sense of responsibility and worth within their company. One of the reasons we work is to be remunerated; however, if employers expect their employees to go the extra mile, it’s important to ensure they are rewarded appropriately. After all, an employee’s favourite part of the incentive plan is the compensation they receive, primarily driving employees to pursue their targets.

Employee incentives not only motivate employees but also have a positive psychological impact by conveying that their employer has a vested interest in their performance – this plays a significant role in retaining top talent. The attitude of employees towards themselves, their organisation, and their position within their company is vital for their drive and self-confidence.

Read Harvard Business Review’s blog on Compensation Packages That Actually Drive Performance.

How incentive plans drive performance

One of the main advantages of providing incentives is to stimulate higher productivity and foster a culture of excellence. By implementing an effective employee compensation program, organisations can motivate their employees to become more committed to the growth and success of their companies.

Motivating employees is crucial for enhancing their engagement and productivity in their roles. By supporting their personal and professional goals, companies empower their staff to achieve both their own financial and career aspirations as well as company objectives. This approach ensures that employees seize every opportunity and maximise their potential at work.

Aligning the goals of the company with employee’s professional goals

Goals are crucial in many ways – they effectively convey what truly matters while empowering individuals to efficiently strategise and accomplish their tasks. Not only does goal-setting provide a sense of purpose, but it also enhances commitment to achieving desired outcomes.

Aligning incentives to corporate and personal goals can further strengthen the connection between employees and the companies they work for. Incentive plans offer employees the chance to reap the rewards of achieving performance targets; however, in order for them to be effective, these plans should establish clear, identifiable goals.

Creating alignment between employee goals and company objectives is vital in fostering a culture of accountability and inspiring continuous progress.

Transparency in goal setting and awards

Researchers have found that employee incentives are the secret ingredient that keeps employees energised and passionate about their work. However, a company’s incentive plan needs to be communicated in plain and simple language so that the targets, objectives and related benefits are clear and transparent.

Providing regular feedback to employees is key in helping them recognise the impact of their work on the company’s overall success. This requires effective communication and the utilisation of tools to ensure valuable and transparent feedback is received, leading to successful goal attainment.

ShareForce’s role in motivating employees

ShareForce enables companies to effectively motivate their employees with a personalised participant portal. This portal not only communicates the goals necessary to maximise incentive awards but also encourages engagement and boosts performance. With ShareForce, participants can easily track their targets and the value of their awards and actively engage with their employers on their incentives. Designed to align seamlessly with a company’s corporate identity, the ShareForce employee portal enhances participant engagement and drives organisational success.

To view a demo or get more details on the ShareForce platform, fill in the contact form below or visit the ShareForce website at


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