Working Life > Income > Incentives

Incentives and Incentive Programmes

Definition, Explanation

Besides income, performance-related bonuses, company cars, or advancement, the ways of companies to incite their employees to special performance include incentive programmes.

Kinds of incentives:

• Money bonuses
• Bonuses-in-kind
• Incentive events and travels
• Special education or further education (e.g. involving theatre, performers, clowns)
• Participation in congresses, meetings, where special personnages can be met
• Counting learning as working time, or granting special leave

Purposes of incentive programmes:

• Increasing motivation
• Fostering team spirit
• Identification with the company, creation of we-feeling
• Private acquaintances
• Conveying of knowledge and information

Tax and incentive programmes:

• Incentive travelling activities are a form of payment-in-kind
• Expenses for incentives exceeding 110 Euros per year and person are taxed as regular working remuneration

Tips, Checklist

For employers:

• Money bonuses are not really perceived, they will just be money on the account. In-kind bonuses might have the disadvantage that they are often of no use or do not meet the taste of the individual employee. Events and travelling activities, in contrast, often create a lasting experience. One or the other will perform at his best in order to be able to participate in such an event again
• Involve a professional event-managing company
• Make sure the event is in line with your kind of company
• Make sure that all employees who contributed to the success will be provided the chance to participate
• To decorate individual employees for special successes, some special further education might make sense. Here, it is important for you to know in how far you are supporting a personal desire. You might consider sharing some costs of an MBA or of a language course abroad. Also consider special leave

For employees:

• Decently point out to your employer that you are less interested in money- and in-kind-bonuses
• Suggest alternatives, or tell your boss how other companies or departments celebrate their achievements

Last update: 01/18/2010