How to Create an Employee Incentive Program

Increase team productivity, participation, and workplace happiness by creatively rewarding a job well done.

Shift work can be tiresome and repetitive when you’re doing the same type of thing month after month. This is why real career advancement opportunities for restaurant staff are so important to keeping them around. But the underlying structure of front-of-house work is built on external motivation. Tips alone are a huge monetary incentive, obviously, but a workplace incentive program can also motivate your staff to want to shine, even on the slowest shift.

What is an employee incentive program? An employee incentive program motivates staff to work towards either personal or company goals by being rewarded with some type of prize. A well-thought-out employee incentive program has the potential to improve your restaurant’s sales, profit margins, and overall guest experience. It’s a powerful thing when done right.

Josh Sapienza, from Hospitality Helpline, says, “An intelligently and equitably designed incentive program inexorably ties staff to (controllable) financials and operational performance while creating a fun reward system.”

In this guide to creating employee incentive programs for restaurants, you’ll hear from other restaurant professionals like Josh and learn things like:

  • What an employee incentive program is and does for your restaurant
  • Examples of restaurant employee contests and games that boost productivity
  • Ideas for incentive program prizes to reward winning staff

What Are the Benefits of Employee Incentive Programs?

The best thing about an incentive program is that while you’re engaging your staff in their work, you’re also coaching them on business operations and profitability strategies. Through this extra level of transparency into the business, they’ll learn new skills and build ownership over the success of your restaurant.

Creating an employee incentive program is a win-win for you and your staff: You enjoy the added attention to an important business goal or objective while your staff gets to spice up their shifts with a little healthy competition and rewards. Engaging your restaurant employees with contests, challenges, and games not only helps the hours go by quicker but promotes a culture where people are excited to come into work each day.

Here are some examples of short- and long-term goals you can shoot for by engaging your staff with an employee incentive program.

  • Increase overall check size through upselling and suggestive selling
  • Refer high-quality candidates for open spots on staff
  • Drive sales for a specific menu item
  • Expand your staff’s product knowledge
  • Drive sign-ups to your loyalty or rewards program
  • Increase gift card sales
  • Drive RSVPs to an event
  • Improve table turn time

One quick thing: An employee benefits program and an employee incentive program are different things, though they’re closely related. An employee benefits program provides your staff with non-performance-based perks for working at a company; employee incentives are typically performance-based perks rewarded for doing a good job, accomplishing a goal, or going above and beyond.

How to Set Up an Employee Incentive Program

When creating a custom incentive program for the employees in your restaurant, there are four main things to consider:

  • The benefit of participating (the prizes)
  • The program itself — how will staff earn said prizes?
  • Whether the contest, challenge, or game is team-driven or individual-based
  • The duration of the contest, challenge, or game

The challenge of the contest or game must match the value of the prize. Your staff needs to want to win it, and if the level of effort required doesn’t match the potential prize, you won’t get your desired engagement.

Your employee incentive program should be unique to your restaurant’s goals and whatever your restaurant staff finds to be an engaging prize or reward.

Here’s a helpful exercise to plan your employee incentive program. Create a spreadsheet and add the following.

Column A: Restaurant goals

Put together a list of goals you have for your restaurant, like increasing sales, getting more applications for open job postings, or increasing sign ups to your customer loyalty program.

Column B: Initiatives

Here, you’ll brainstorm specific ways your team could move you closer to accomplishing the goals outlined in column A. If you’re trying to increase sales, you’d likely add things like “increase check sizes through upselling,” “improve table turn times,” or “increase online orders through social media.”

Column C: Contests, challenges, and games

This will take some creative thinking. Take the ideas you recorded in column B and turn them into a contest, challenge, or game that’s either individual or team-based. Improving table turn times could turn into a table turn time challenge to see who on your staff can decrease their table turn time the most over the next month while maintaining an average tip percentage of 18 or higher. If you’d like to focus on reducing food waste in the back of house, have your back-of-house team weigh a bag filled with discarded food scraps each night for a month to see how much they can collectively reduce.

Column D: Duration

Some employee incentive programs are nightly while others might run for a week or even a quarter, so the prizes should align with the length and effort.

Column E: Team or individual

Here, record whether the contest, game, or challenge you’ve come up with is team-wide or for staff vs. staff.

Column F: Prizes

This part will require some feedback from your team. Ask a handful of your employees for their thoughts on prizes for each of the contests, challenges, and games you outlined in column C. Make sure the prize matches the level of effort required to accomplish the task. If budget is a concern, there’s almost no greater incentive than honest recognition and genuine praise. In fact, McKinsey found praise and commendation from managers was rated the top motivator for performance, beating out other non-cash and financial incentives for a majority of workers (67%).

Column G: Notes

Just a space for observations or specific rules. After the competition has finished, add notes about how it moved you toward accomplishing your goals, whether your staff found it fun and engaging, if they found it difficult or confusing, and whether they’d be interested in doing it again in the future.

This planning doc will be great to refer back to in the future should an obstacle arise — like a sales slump or a low amount of applicants to an open job. Another tip here: Beware of winner-takes-all incentives. If the competition becomes a run-away win or the same three people are consistently winning employee incentive competitions, the rest of the staff will disengage and lose interest.

Make sure that with any of the prizes, whether they’re games or contests, you’re always dishing out a heavy heaping of recognition. And not just to the winner but to everyone who put out effort. Both privately and publicly recognize both effort and performance.

Employee Feedback Template
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Employee Feedback Template

Use this customizable Word doc to guide self, peer, and manager reviews with your employees.

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Restaurant Employee Contests to Boost Productivity

We spoke with restaurateurs about incentive contests they’ve run that have boosted productivity and performance for their teams.

1. Server bingo

The most popular game used as part of an employee incentive program has to be server bingo.

It's played just like regular bingo, but instead of numbers the squares are replaced with menu items or upsell opportunities. You can play by completing rows, four-corners or black-out style, meaning all the squares must be filled to win. Server bingo can be played competitively, where the first person to achieve a bingo or black-out board wins either the only prize or a grand prize, or individually, where any team member who achieves bingo during their shift wins a prize.

Lexi Kaye, manager of Stoneforge Tavern & Publick House in Massachusetts, adds a twist. “On the back of the bingo card is a list of different incentives, like $10 restaurant cash for two bottles of wine in a shift."

2. Server poker

Server poker is played like a poker run. Each time you sell a certain menu item, complete a particular upsell, or perform an exemplary action (like helping someone in the weeds) that the manager deems reward-worthy, the employee gets to choose a face-down card out of a deck.

At the end of the night (or week), the staff member with the best five-card poker hand wins the prize.

If a staff member has pulled more than five cards, they get to choose their best five cards to submit for play; you can also do a bonus two-card pull for certain focuses or achievements. One aspect of server poker that staff tend to enjoy is there’s a touch of luck involved, so it’s an easier game for new team members to win.

3. The “caught doing good” buck contest

Here’s how it works: Each “buck” equals $1 off any in-house food, beverage, or merchandise, and the bucks can be saved and used together, all at once.

All managers carry bucks with them, and any time exemplary performance is observed, the manager first verbally reinforces the positive action and then quantifies that reinforcement by giving the team member a buck. Pretty simple stuff.

There’s one caveat we’ll add to these manager-run competitions. For any games that require a manager to decide what’s rewarded and what’s not, there’s more subjectivity in what’s deemed “good behavior.” If staff get even one mixed message, they’ll get frustrated, so you need to make sure your management team is super aligned on what behavior to reward.

4. The positive review contest

Offer a prize to the staff member responsible for the most five-star reviews written on Tripadvisor or Yelp within a month's time. Staff should encourage customers to include their names in the review so that you and the rest of your restaurant’s management team can tell who’s responsible for which reviews.

When it comes to deciding on a prize, it’s best to think in these terms: If a magic Yelp fairy showed up and offered you genuine five-star reviews, how much would you pay for each review? $25, $50, $100? However much you’d be willing to pay is what the prize should be valued at.

This contest isn’t just rewarding your staff for delivering memorable dining experiences, it's powering positive marketing. Print out and post the positive reviews in the employee break area for a little motivation and appreciation year-round. Nothing gets you through a stressful or slow shift quite like direct feedback.

5. The good ol’ sales competition

Customize your sales contests to fit your restaurant’s revenue or budgetary needs.

If it’s the second-to-last week of the month and you notice you’re cutting it close to hitting your monthly sales goal, have a quick 10-day sales contest to get you over the hump.

If you have a surplus of kegs of particular beer and you want them gone, have a sales contest to see who can sell the most of that kind of beer to move the inventory more quickly.

Short-term sales contests are great for immediate results, whereas long-term sales contests are a great way to make incremental change over time; long-term sales contests are also where you offer those big, valuable, grand prizes.

Rita Imerson, a hospitality, training, and operational consultant for Synergy Consultants, said, “I like a team month-long contest with a big prize at the end, and we work with vendors to supply those. I did a month-long contest on increased liquor sales and made baskets for the winners with liquor or wine, gift cards, wine openers, and then some items I knew they would enjoy. It was a huge hit and the staff was really into it.”

I like a team month-long contest with a big prize at the end, and we work with vendors to supply those. I did a month-long contest on increased liquor sales and made baskets for the winners with liquor or wine, gift cards, wine openers, and then some items I knew they would enjoy. It was a huge hit and the staff was really into it.

Rita Imerson

Hospitality, Training, and Operations Consultant

6. Referral bonuses for successful new hires

CareerBuilder found losing a good hire opportunity costs a business, on average, $3,000.

How much do you pay for recruitment? What’s a great employee worth to you? Instead of paying for ads and hoping they work out, incentivize your staff to personally invite the best people they know to join the team.

Referral bonuses should activate only after a successful hire, onboard, and three months of employment. This strategy encourages tenure and will save you big money: Roughly $11 billion is lost annually to employee turnover, according to Bloomberg.

7. A co-branded contest with a rep or distributor

Hosting a co-branded sales contest with one of your distributors or vendors is a great option for restaurants that have a strong relationship with one or more vendors.

Talk to your reps and tell them you’re interested in doing a sales contest to drive volume and see if they have any sales goals related to a specific product or brand that you carry. Both you and the distributor benefit from the uptick in sales, and with two companies contributing to the pot, your staff get the chance at winning a more substantial prize.

The Best Restaurant Employee Incentive Program Prizes

Before we get into prizes that actually incentivize, let’s talk about the dont’s. As we mentioned earlier, if the incentive prize is weak, your staff will feel unmotivated to work any harder.

Swag is a good example. Don’t reward your staff with the free promotional materials you get from distributors and vendors. Your staff doesn’t care about keychains, rope necklace shot glasses, or alcohol-branded t-shirts. These are fun things to give away during events at your restaurant, but don’t try to tie them to a request to increase performance or effort; everyone on your staff knows these items are sitting in a cardboard box in your dry storage collecting dust.

On the flip side, cash isn’t always king. The Incentive Marketing Association found that 65% of employees preferred non-cash incentives.

So which employee incentive prizes actually work? The ones your staff tells you are meaningful. As we mentioned above in the employee incentive program planning exercise, ask for your team’s input on prizes that would and would not motivate them.

Here are some employee incentive program prizes worth considering.

1. Gift cards

Gift cards are a great incentive. Practical gift cards — like ones for gas, Amazon, Target, Starbucks, or a cash value card from Visa or MasterCard — will be the most meaningful to your staff’s daily lives and therefore the most motivating. Only offer gift cards that are universally used. Stay away from any genre-specific gift cards.

2. Free food or meals

Your restaurant is already cooking up greatness, and everyone needs to eat. Giving an employee a meal as a reward is great because they’re trying the menu and becoming more familiar with your restaurant’s dishes. They’ll now be able to give customers menu recommendations based on their own taste buds, not just your handbook's description.

If you don't already do free staff meals for all staff, shift meals or free meals also make great non-performance based incentives.

Lakewood Brewing Company gives employees “a per diem per quarter to spend on in-house products. It's a really great way to boost team morale.” It also allows the owner to give something that has a higher perceived value than the actual cost.

3. Trade gift cards with a local restaurant

At some point, no matter how great your food is, veteran staff will have eaten everything on the menu a hundred times.

Sydney Smith Stopka, of Back Home Restaurant, in KY, says, “Everyone loves free food. But employees do get burnt out eating the same thing every day.”

Try doing a gift card exchange with other local restaurants to establish stronger relationships with other leaders in your community and expand your own staff’s culinary options.

Trade the same amount of gift cards with the same value preloaded.

Because you'll be getting staff from other restaurants coming in to your site, make sure to delight them with exemplary service. If you do a good job, this sharing program can create some new regular guests for you and maybe even new hires in the future.

4. Guaranteed holiday off

This one is a monster of an incentive that must be given out sparingly. Guaranteeing a major holiday off is a good prize for a long-term contest.

First choose which holidays are up for consideration. Your winning employee could be guaranteed to be off for their choice of Thanksgiving, Christmas, or New Year's, with enough notice.

5. In-house shift coupons

Another big hit in the employee incentive prize category is coupons for things like:

  • Choice of a section
  • No side work
  • First let-go on a specific shift

These make great prizes that servers and bartenders really value. If the coupon redemption involves prior scheduling, then the coupon can only be redeemed for use prior to that schedule being made.

Restaurant Scheduling Template
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Restaurant Scheduling Template

Use the restaurant scheduling template, a customizable Google Sheets template, to schedule your restaurant staff's shifts so employees can access it on the go.

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Motivate, Incentivize, Reward — Whatever You Call It, Do It

An effective employee incentive program is a great tool to have in your back pocket. Businesses across industries use incentive programs to increase productivity, reach their goals, and improve workplace satisfaction for their staff. They’re so popular there are even companies that create and manage employee incentives programs for other companies.

People love being appreciated for a job well done. Whether you’re running a specific challenge or it’s just your average day on the job, reward your staff for their time and effort and they’ll be a little more psyched to come back for the next shift.

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