Manini Dubey, a software engineer at one of the top Indian IT firms, feels it is high time she starts looking for a new job. Having worked in her current firm for nearly three years, she wants to move over to a new firm, just for the change. But, here is what holds employees like Manini from moving to a different firm: Incentives.
From project completion lunches to holiday sponsorship, companies around the world dole out several innovative incentives to employees, in a bid to retain them. Siliconindia lists out the ten most popular incentives that employers offer, and employees enjoy today.
Cash Bonuses – According to a recent Accountemps survey, 46 percent of (1,400) CFOs cite cash bonuses as the most effective way to acknowledge a job well done by the accounting team after a major project. Be it an IT firm, or a non-IT firm, cash bonuses based on performance has always been a favourite among employees and employers alike. The satisfaction that comes from being recognized as an important and valued associate is an extremely powerful motivator for employees.
“This is a very popular incentive that employees look forward to. It is enough to motivate an employee to turn a dream project into a growing, profitable business. Besides, if you don’t reward your employee on time, some other savvy businessperson will make them an offer that they can’t refuse,” says Srikant M, a software engineer working at a mid tier IT firm.
A similar bonus is the Employee Stock Option Plans (Esops). ESOPs enable workers to earn a retirement nest egg, which will grow as the company’s business prospers. This also allowed employees to help the company succeed. An ESOP can also be a great deal for the owner of a business. The owner can sell some of his stock in the company to the ESOP, reinvest the proceeds in publicly-held securities, and not pay any tax on the gain until the stock is sold. Hence, it is a win-win situation.
Project completion lunch – This is another popular incentive that employees look forward to. Today project completion lunches have become the norm in most mid tier and top IT firms. According to Prashant Honnavar, HR Manager at NextBit Computing, “These days project teams, work hard to meet the deadlines to release a particular product without any delays. During this phase, the team members put all their efforts for which they need some kind of relaxation. Having a lunch together with the team will enhance the team rapport, refresh them, and will get the team to be more cohesive and will reduce the personal clashes within them.”
Joining bonus – This is a great incentive that works well in employing the right candidate in a short amount of time. It allows an employer in attracting and retaining a talent that is critical for niche areas of technology, and hence not losing out to rival firms. Many candidates are lured by this incentive in a bid to make some extra bucks. The bonus depends on the size of the firm, and can range from Rs.30, 000 to Rs.50, 000 in India. However, a lot of big IT firms also practice awarding bonuses on special occasions. For instance, on the occasion of the silver jubilee of Infosys, the IT giant offered a princely sum of Rs. 126 crore to be distributed among its 58,000 employees.
Tax Saving Incentives – Tax saving incentives that include food coupons, HRA (Health Reimbursement Account), transportation allowance, are some of the most popular and sought after incentives. Additionally, companies allow employees to reimburse their children’s education bill and telephone bills, which are non taxable and hence allows maximum savings. This becomes a big boost for an employee to join a company.
Corporate discounts – Company products and services offered at a discount to staff or negotiated corporate discounts with certain retailers, recreational facilities or hotels/airlines. Today employees around the world can benefit from substantial discounts at nearly all the top retailers, when purchasing holidays, household appliances or everyday items like CDs or magazines, whether it is online, over the phone or in-store
Rewards and Recognition – One of the most valued of all employee incentives includes the peer programs, or in other words awarding performance through recognition. In 2008, one of India’s top IT firms, Infosys doled out iPods and Xbox players to its top performers as an incentive.
“I can remember one policy that I had rolled out at one of my previous organizations. It was called Peer Program. This is basically a recognition program where the awards were scattered in different phases. Some of the awards that were covered in this program included, on the spot award, best debutant award, best team player award (quarterly award), and best employee of the year award,” says Honnavar. These awards are given to employees who are nominated by the team manager under specific criteria. Nominations of course had to be justified along with proof of work. The awards were shoppers stop vouchers of various denominations of Rs. 250, 500, 750 and so on, along with certificates.
Holiday Sponsorship – “But it is the ‘Employee of the Year Award’ that is the most sought after incentive – A two nights and three days package tour to Dubai,” adds Honnavar. This serves not only as a reward for the good performers, but also becomes a motivation for others to perform well and get rewarded. One can also offer staff members flexible scheduling for the holidays, if feasible. If work coverage is critical, companies can post a calendar so that people can balance their time off with that of their coworkers.
Point System – This is especially for hourly employees, who can be offered a point system that is tied to prizes. This re-energizes the first-tier employees, and creates a more competitive working environment. For workers on salary, several companies offer large prizes based on a ‘points lottery’ or simply allow for extra days off or an extra 15-minute break or two.
Insurance – Whether it is health insurance or life insurance, this is an incentive that most employees look for when joining an organization. According to a survey by Hewitt Associates, a human resources consulting and outsourcing company, of nearly 600 large U.S. companies representing more than 10 million employees, almost two-thirds (65 percent) say that they currently invest in long-term solutions to improve the overall health and productivity of their workforce.
Motivational employee recognition – “Informal recognition, like saying thank you or please, can make a huge difference,” says Abhay Kumar Dubey, a software engineer working with a startup in Delhi. Supervisors, have enough opportunity to praise and encourage best efforts daily. These help in providing recognition that is valued by the employee and also a motivational factor.
With time, incentives have gained importance, and are now the prime motivational weapon used by employers around the world. According to most experts, incentives can push performance and productivity far beyond what you expect. Do let us know, what are the most popular incentives that your firm offers, or you would like your firm to offer?