Employee incentive programs are a huge part of U.S. industries, but still a great number of businesspeople doubt their effectiveness. Spending $100 billion annually for incentives in the workplace is a huge deal, so how do you get actual results?

A study by the International Society for Performance Improvement (ISPI) says that a workplace incentive program's success and return on investment depends on how well it's operated. More than just perks, more than just the incentives themselves, there are things to consider when starting an incentive program. Otherwise, it'll be nothing more than just giving out promotional gifts for business.

The ISPI study outlines eight things for a successful workplace incentive program, but we can also look at it in three steps:

1. Assess and select. A need for an incentive program arises when current employee performance becomes inadequate. In this situation, any means to motivate employees to perform better is welcome. Study the situation; know more about what's going on. Figure out what and where and who needs improvement, then decide the best way to address these concerns via an incentive program.

The study points out that quota-based incentive programs work best for most business situations. Receiving rewards for meeting and/or exceeding work goals has a positive effect. Giving everyone a chance to succeed at receiving incentives produces motivation to perform better. Set attainable performance goals to encourage employees. As for the incentives themselves, the study also says that businesses may actually be able to have more motivational impact at less cost if employees can choose their own performance incentives.

2. Communicate and engage. In order to make the incentive system actually work for you and return your investment, you need to follow it through with the proper training and communication. Rewards give employees reason to commit to their work goals, causing them to add more value their work. Fostering this sense of value together with an active system of training will not just improve work dynamics, but will also boost employee self-esteem - knowing that you're contributing something and that you're contributing well is a strong additional motivation. And to go along well with this emotional appeal, rewards should be carefully and promptly given, and should be clearly distinguished from regular compensation.

3. Measure, analyze, and give feedback. The criteria by which rewards are based on should be clear and realistic, practical, achievable. Make it so that employees would find the measure for productivity as something they can live up to, something they'd be consistently willing to rise to the occasion for. The IPSI study states these measure for motivation in three simple key terms: a) active choice, where one chooses to do the work goal in the manner intended; b) commitment, which is the persistence to achieve the work goal over time, and c) mental effort, where one thinks clearly to perform well and achieve the set goals.

It takes more than just rewards to get a good incentive program going - it involves a system, each part of which addresses a particular need to be able to motivate, educate, and engage employees.