- Employee incentive programs are any kind of system put in place by employers that reward workers for increasing or improving business according to set guidelines. Most commonly, they are ways of increasing sales. Employee incentive programs have existed for a long time in sales-based jobs, such as telemarketing, but they are becoming increasingly popular in other sectors, such as retail. Electronics stores and cellular phone stores and kiosks often utilize such programs for their workers.
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For almost all employees (except those working as food servers), employers are required to offer a base salary of at least minimum wage. A few exceptions include many phone sales jobs, which often pay entirely on commission.
Beyond base wage, incentive programs work by paying employees according to how many sales they make, meaning the number of times they guide a customer to buy. Incentives may be as little as small, set monetary gifts (sometimes as little as $5) given to encourage the sale of one particularly lucrative item in a store, or commissioned sales may make up a large part of an employee's compensation and daily work. - Many employers who are trying to move to a business model heavy on employee incentives will offer a wide variety of options in their programs. This gives employees the flexibility to be able to succeed with incentives that suit their particular talents and situation while encouraging them to use diversified sales tactics and always meet the needs of the customer. For example, the same company may give incentives that reward employees with a percentage of sales profit but also give a bonus based on the total number of sales made of small products. This not only gives employees two avenues for success, it encourages them to focus on both large and small items.
- The advantage to businesses of employee incentive programs is that they encourage employees to have a personal stake in the success of the business and to work to improve the number of sales and satisfied customers. Employees working on an incentive program will generally be much happier to see customers and experience busy days than employees who get a flat wage. It also increases the job satisfaction of employees who are talented in sales, because they get to see direct rewards for their abilities and efforts. This helps to decrease turnover of talented employees.
