Professor Kirk Chang: Are incentives outdated?

Professor Kirk Chang

There are thousands of types of incentives, but they usually fall into three main category bases: holiday, finance and workshop or training.

These have been used around the world in various types of organisations, and they all have their positives and negatives. No reward system is perfect, but, in general, they can be used to improve morale among staff. Different systems of reward can be used in combination, and some are more appropriate for different organisation sizes and employee seniority level.

Examples of holiday-based incentives include performance schemes and holiday vouchers. These can be popular with employees, and do not require a lot of admin. However, they can make under-staffing situations worse, and can be expensive if jobs need to be reassigned.

Financial incentives include things like shop vouchers or a monetary bonus. These can have an immediate effect on morale, but it usually does not last long. These can also be an extra burden on already tight budgets, and can be hard to monitor.

Workshop-based incentives can include training sessions, gym memberships or health club memberships. These can take time to generate rewards, but once they have, both the employee and the organisation can see good benefits. This is likely to be the most expensive of all the options, but it could potentially be tax efficient, depending on the set-up. Not all organisations can afford incentives such as workshops.

Despite all of the potential positives from incentives, many of these seem somewhat outdated. There are arguably better ways for managers to be reducing stress levels in their staff. For example, some organisations have started to offer more freedom, such as flexible working and the ability to work from home, which can have a positive effect on employee wellbeing.

Professor Kirk Chang is professor of organisational behaviour research, convenor of law and people management at the Salford Business School, University of Salford