Back to Blog
Company Culture

Want to Keep Your Employees Motivated and Engaged? The Answer Is Incentivization!

In times of a shortage of skilled workers, in order to present a company as particularly attractive and stand out from the competition, a promising salary alone is no longer enough.

More and more applicants are more interested in the overall performance of a company, and for this reason many companies rely on so-called incentives.

We show you which incentives are really in demand among applicants and how you can score points with qualified talents.

What Do We Mean by Incentivization?

The word originally comes from English and describes various incentives for employees. In other words, they are additional benefits provided by the employer in addition to the monthly salary.

Employers can score points with incentive programs in many ways, because they not only increase the motivation of their employees, but also attract new talents.

Satisfied employees are known to perform better work and stay with the company longer.

Your company can thus retain workers while filling vacant positions faster.

What Are the Categories of Incentives?

Incentives can be targeted at different groups, and are not only for the employees themselves, but for the company as a whole and the customers.

Incentives for Employees

With reward systems including monetary compensation and other benefits, productivity is increased and employees have no reason to look for a new job.

For companies, this means that employee turnover can be kept consistently low.

Likewise, it ensures that your employer branding is strengthened and that your company receives more attention on the job market.

Incentives for The Company

Better motivation increases productivity and strengthens the economic position of your company.

Incentives can be used after reaching a certain goal or to increase competitiveness.

However, be careful not to create hostile competition between employees.

Incentives for Customers

Customers also like to benefit from incentives that a company provides.

For example, many companies rely on loyalty points and discount promotions, to retain existing customers and attract new ones in the long run.

Advantages and Disadvantages of Incentive Programs

As described earlier, incentives are good ways to satisfy employees, increase productivity, retain them over the long term, and attract new employees.

However, there are also negative consequences if incentives are not fairly used.

For example, there may be competition between employees and some employees may feel left out if their performance is not considered incentivized.

This can increase pressure on the workforce and lead to stress. Additionally, always keep in mind the taxation of monetary compensation and how much of it actually reaches employees.

Promising Incentivization Methods

Besides the classic employee benefits such as bonuses and allowances, there are a number of other measures that a company can take to increase employee motivation.

Here are the most popular incentives:

  • Flexible working hours
  • The possibility to work in a home office
  • Company-organized trips, company events and parties
  • Vouchers and staff discount
  • Company pension plan
  • Provision of drinks and snacks
  • Childcare support
  • Further education opportunities
  • Company laptop, cell phone or company car
  • Fuel vouchers
  • Gym vouchers

Taxation of Incentives? Which Ones Are Tax-Free?

In addition to tax-free incentives, there are of course those that must be tax-deductible.

Tax-free incentives include flexible work hours, home office, meals with drinks and snacks, company laptop and cell phone, continuing education courses, and co-pays for child care.

If you want to provide your employees with benefit cards for public transportation, these are tax-free up to 50 euros per month. Meal vouchers are tax-free up to 3.10 euros per working day. Company events are tax-free up to 110 euros per person.

As a company, it is definitely advantageous for you to offer tax-free incentives instead of taxable ones, so that employees can enjoy them to the full extent, and you do not only benefit from a fraction.

Incentives as a Success Factor

Incentives are tax-free or taxable incentives for your employees to increase their motivation and ensure that they stay with your company for as long as possible.

At the same time, reward systems strengthen your company's employer branding, and you are perceived in a particularly positive light by new applicants.

This saves you time and resources in the recruitment process. You can also retain customers with certain incentives. So, clever incentives benefit your employees, your customers, and your company.

If your company is also looking for new talent, we at TieTalent will be happy to assist you in developing a promising program as well.

Our recruitment process is extremely fast and efficient so that your company does not lose valuable time. You can easily create a free profile at any time.

Back to Blog
We use cookies in order to enhance your user experience. Learn more