Using Incentives And Recognition To Boost Productivity

Forbes

09-06-2025

No matter what industry you work in, one of the most important factors for driving results is having a productive and highly motivated workforce.
Unfortunately, having an engaged team doesn't always come easily. Gallup reports that just 31% of employees feel engaged at work — and that disengaged employees result in $1.9 trillion in lost productivity in the United States each year.
Part of the reason for this is because many employers overlook one of the basic tenets of work psychology. Using a carefully crafted incentive and recognition program can be a powerful tool for increasing engagement, productivity and other valuable employee metrics.
The concept of using incentives in the workforce comes from the psychological theory that our behavior is largely shaped by perceived consequences. Trying to achieve a reward motivates us to pursue a certain behavior, while fear of punishment acts as a deterrent. However, for those perceived consequences to have actual power, they need to be consistently reinforced.
Another important consideration is the inherent desire among most employees to feel valued, which is a powerful driver of workplace satisfaction and motivation. When employees don't feel valued, they are less likely to give their best effort, and are more likely to look for a job where they believe they will be more valued.
Unfortunately, many employers don't deliver on these basic needs. Workhuman reports that 46.4% of employees say they are only 'somewhat valued' by their employer, and an additional 10.7% don't feel 'valued at all.'
While many workplaces struggle to keep employees engaged or make them feel valued, the right incentives can completely transform the work environment—and the level of engagement.
So, how do incentives motivate desired behavior? First, there's the fact that behavior is shaped by perceived consequences. Incentives act as positive reinforcement for desired behavior. For example, Toyota's famous kaizen mindset, which encourages all employees to look for ways to make continual improvements to company processes, incentivizes idea sharing by offering monetary rewards and personal recognition for implemented ideas. Incentivizing this program results in over 250,000 suggestions per year.
Another example comes from a case study featuring a collaboration between Blueberry Pediatrics and Motivosity. As a fully remote company, Blueberry Pediatrics was struggling with engagement. They partnered with Motivosity to implement a centralized platform and realized an 89% increase in participation in employee programs. In addition, a peer-to-peer giving and recognition system led to a 30 times increase in employee recognitions, further driving engagement and deepening relationships among team members.
As these examples illustrate, incentives can provide a powerful motivation to improve performance at work. Whether in the form of a monetary reward or public recognition, incentives create psychological motivation for employees to do their best — and even go above and beyond what is expected of them.
Where recognition comes from can also make a difference. As one report from Gallup notes, 'Nearly one-quarter [of employees] said the most memorable recognition comes from a high-level leader or CEO. Employees will remember personal feedback from the CEO — even a small amount of time a high-ranking leader takes to show appreciation can yield a positive impression on an employee. In fact, acknowledgement from a CEO could become a career highlight.'
Which types of incentives work best? Academic studies into incentives reveal that in many cultures, monetary rewards tend to be more powerful motivators than other incentives — but in other cultures, a psychological incentive proves more effective. A bonus or significant performance-based incentive isn't the answer to every situation (especially for businesses on a tight budget).
Fortunately, money isn't the only way you can incentivize employees. And in fact, monetary rewards are often temporary, rather than permanent motivators. Employees who feel seen, valued and appreciated are more likely to remain loyal, engaged and productive in the long run. For many, consistently receiving public recognition and praise can go a long way in helping them this way.
Some organizations may link incentives to the results of a team's campaign, seeking greater buy-in and collaboration from a department or even across the entire company. Rewards like team outings, special meals or even extra time off or unique experiences can give teams an extra goal to work for as they strive to complete a project or hit KPIs.
Rewards can even be as simple as gift cards to a favorite retailer, restaurant or subscription service. Alternatively, some companies go in a different direction with rewards, like giving employees more autonomy with more flexible work arrangements.
Regardless of the specifics of your incentive program, it's important that you adapt it to the needs of your organization and the values of your employees. Incentives should always be linked with desired employee behavior or work outcomes, and appreciation should be expressed consistently. At the same time, the incentives should feel meaningful, relevant and (when possible) personalized to your employees based on their contributions and interests.
With the right incentive and recognition program, you can ensure that your employees feel valued and engaged at work. This will, in turn, make them more productive and less likely to look for jobs elsewhere.
And best of all, incentivizing engagement, innovation and performance doesn't have to always be monetary. By providing recognition for quality work and understanding what types of incentives are the most meaningful for your team, you can give them greater motivation to do their best — and then get the results you want for your business.