36 Examples of Employee Incentives

John Spacey, March 15, 2023

Employee incentives are rewards, benefits, working conditions and opportunities that are offered to employees in order to improve recruiting, retention and performance. This includes any pay above base salary such as a performance bonus. Employee incentives can also include working conditions such as the ability to work from home and minor perks such as healthy snacks. Things like social status, position in a hierarchy, opportunity for advancement and growth can also be viewed as incentives. The following are common examples of employee incentives.

Annual performance bonus	Career advancement
Commission on referrals	Commission on sales
Convenience and comfort e.g. work from home	Customer satisfaction bonuses
Education support e.g. time off	Employee benefits
Employee discounts	Employee recognition
Employee referral bonus	Flexible schedule
Incentive pay	Industry opportunities e.g. speaking at conferences
Luxurious offices	Milestone bonuses
Office locations e.g. convenient or high status location	Onsite daycare
Paid time off	Performance-based pay
Perks e.g. free snacks	Power, authority and position
Profit sharing	Project completion bonuses
Quality bonuses	Retention bonuses
Retirement plan	Safety bonuses
Sales bonuses	Signing bonuses
Social status e.g. working for a high status firm	Spot bonuses
Team environment e.g. frequent team building events	Training programs
Travel opportunities and luxuries	Tuition reimbursement

What is an incentive to one employee may be a disincentive to another. While monetary rewards are universally popular, things such as team building events may greatly improve the job satisfaction of one employee but be a source of dissatisfaction for employees who would prefer to focus on their productivity and life.

There are many different types of paid time off and employee benefits.

Some employees will be strongly motivated by opportunities to take on responsibility, learn, grow, network and achieve high visibility in an industry. Others would find all of this terrifying.

Hygiene Factors

Hygiene factors are basic employee expectations that greatly decrease employee satisfaction if they aren't met but don't increase satisfaction when they are met. For example, free coffee in an office is so common that employees may simply expect it and not view it as a perk.

Perks

Perks are small rewards such as a free meal that are offered to employees. This can feel a little childish whereby adults are supposedly motivated by things such as free snacks. It might be tempting to think that minor perks encourage mediocrity in some way. This is depicted in the 2022 American science fiction television series Severance whereby employees have no life outside work, due to an element of the plot, but are obsessed with obtaining minor perks in an environment of complete mediocrity whereby employees don't understand the meaning of the work that they are completing.