Hit the Mark with Customized Incentives

Unless you work on Wall Street, you probably didn’t get a year-end bonus checks last year. Forty-three percent of companies don’t give out year-end bonuses according to outplacement firm Challenger Gray and Christmas. And at half of the bonus-giving companies, employees receive either a non-monetary gift or a nominal monetary award valued at less than $100. Frozen turkeys, anyone?

Compared to 2010, 75 percent said they’re gave the same size bonuses in 2011, 17 percent said bonuses are getting bigger and eight percent said bonuses are shrinking compared to the previous year.

So, is the bad economy still to blame? Partly, but companies are also looking for new ways to motivate and reward top performers, after finding that annual bonuses weren’t all that effective. The problem is, unless employers offer a quick and effective alternative, they risk losing top performers.

Some companies are trying to motivate employees throughout the year by offering milestone bonuses or interim performance-based incentives. Still others are letting employees stockpile reward dollars in the hopes of boosting retention rates.

Do your research to see what other companies are doing and consider letting employees choose their rewards instead of offering one-size-fits all bonuses that may fail to hit the mark. Perhaps your employees would like more time off or reduced workloads or the ability to work from home, instead of cash, but you’ll never know unless you ask them.

You may find that it’s possible to increase the motivational value of rewards and spend even less, by offering employees customized incentives.