Top 6 Pitfalls to Avoid When Creating an Incentive Program
- Destree Godwin
- Mar 21
- 3 min read
Incentive programs are meant to drive performance, boost morale, and keep employees engaged. But when they go wrong? Well, let’s just say that what was meant to be a motivational tool can quickly turn into an office-wide eye-roll. (Looking at you, “Employee of the Month” parking spot.)
To help you avoid some common missteps, we’re breaking down the top six pitfalls in incentive program design—and what to do instead.
Focusing Only on Cash Rewards
💸 "Everyone loves money, right?" Well, yes… but also no. While 85% of employees say they feel more motivated when they receive non-monetary incentives (Incentive Research Foundation), too many companies still default to cash bonuses.
What to Do Instead:
Mix it up! Consider experiential rewards, professional development opportunities, or even extra time off. People remember experiences more than they remember an extra $200 on their paycheck.
One-Size-Fits-All Rewards
An Amazon gift card is great… unless you’re the one person who still prefers shopping in-store. Assuming everyone values the same type of reward is a quick way to make your incentive program feel out of touch.
What to Do Instead:
Offer choice! Give employees options, whether it’s flexible work arrangements, learning opportunities, or a selection of perks they can pick from. Personalization = motivation.
Ignoring the Power of Recognition
A study by Gallup found that employees who feel adequately recognized are 63% more likely to stay with their employer. Yet, so many incentive programs focus solely on tangible rewards, forgetting that a heartfelt "thank you" can go a long way.
What to Do Instead:
Make recognition a habit! Publicly acknowledge employees' efforts, celebrate small wins, and make appreciation part of your company culture—not just something that happens once a year at the holiday party.
Making It Too Complicated
If your incentive program requires an explainer video, a PowerPoint deck, and a PhD in data science to understand, it’s probably too complicated. If people don’t get how they earn rewards, they won’t bother trying.
What to Do Instead:
Keep it simple! Clear, transparent criteria make it easy for employees to understand how they can achieve rewards—and stay engaged in doing so.
Setting Unrealistic Goals
Nothing kills motivation faster than an unattainable target. If employees feel like the bar is impossibly high, they’ll check out before they even start.
What to Do Instead:
Set SMART goals (Specific, Measurable, Achievable, Relevant, and Time-bound). Ensure that employees have a realistic chance of hitting the targets—and that they have the tools and support to do so.
Forgetting to Measure Success
Throwing incentives into the wild and hoping for the best? Risky move. If you’re not tracking engagement, performance, and ROI, you might be wasting resources on a program that’s not working.
What to Do Instead:
Regularly assess your incentive program’s effectiveness. Survey employees, analyze performance data, and adjust based on what’s working—and what’s not.
A well-designed incentive program can be a game-changer for engagement and productivity. But it’s not just about handing out rewards—it’s about understanding what truly motivates your team. Keep it simple, flexible, and meaningful, and your employees will be actually excited to participate.
As business leader Mary Kay Ash once said: "People want to be appreciated, not just compensated.”
Looking to design an incentive program that actually works? Let’s chat! A&A Consulting helps businesses build strategic, motivating, and results-driven HR solutions.
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