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How To Start An Effective Employee Incentive Program In Your Restaurant

Posted by Ryan Ransom on 7/11/18 5:00 PM in Restaurant Management

13 minute read Print

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Employee incentive programs have the potential to make a huge impact on your restaurant’s sales, costs, and service.

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.”

Restaurants with employee incentive programs have reported a 64% increase in the level of employee engagement then those without one.

An employee incentive program is a great way to reinforce positive behavior or training. It motivates staff to:

  • sell more through upselling and suggestive selling.
  • refer quality potential team members.
  • push a certain product or item.
  • increase your staff members’ quality of service.
  • expand your restaurant staffs’ product knowledge.

When incentives are properly used, you don’t have to force the information down your staff members’ throats; they will proactively seek it out and want to improve themselves.     

What Are The Characteristics Of A Great Employee Incentive Program?

Employee incentive programs break up the monotony of the dining room repetition, excite and motivate your staff to want to excel, and reinforce training and policy compliance. 

Just remember that none of this means anything unless it has been communicated and outlined clearly. Although 75% of organizations have an incentive program, only 58% of employees know about it, according to Bersin.

When looking at effective employee incentive programs, whether team-driven or individual, there are two key aspects to consider:

  1. The benefit of participating – the prizes
  2. The program itself – how do you earn said prizes?

Remember: the program and the prize must match.

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 or effort.

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.  

I have personally found there is 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, by a majority of workers (67%).  

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Make sure that with any of the prizes, whether they are games or contests, you are always dishing out a heavy heaping of recognition. And not just to the winner, but to everyone who is putting out effort; make sure you are both privately and publicly recognizing both, effort and performance.   

Effective, Creative, Employee Incentive Program Ideas

Here are a few of my favorite, effective, employee incentive programs:

1. Server Bingo

The most popular game used as part of an employee incentive program has to be "Server Bingo."

Server bingo is great shift game you can play almost any night of the week.

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 and Publick House in Massachusetts, adds a twist. “On the back of the bingo card are a list of different incentives, like $10 restaurant cash for two bottles of wine in a shift or $5 restaurant cash to pick up a hole.”

2. Server Poker

Next, is another fun game: "Server Poker."

This game is played like a poker run: each time you sell a certain menu item, particular upsell, or perform in an exemplary manner that the manager deems reward-worthy, the employee gets to choose a card (face down) 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 key focuses or achievements.

One aspect of server poker that I really enjoy is that there is a touch of luck involved, so it’s an easier game for new team members to win.

3. Caught Doing Good Buck

One of my personal favorites is the "Caught Doing Good Buck."

I first started using this at Saddle Ranch Chop House in Hollywood.

Here’s the gist: each "buck" equals $1 off any in-house food, beverage or merchandise; the bucks could be saved and used together all at once.

All managers carried bucks with them, and any time exemplary performance was observed, the manager would first verbally reinforce the positive action and then quantify that reinforcement by giving them a buck.

4. Review Site Praise

Here’s an employee incentive that kicks back to both your staff and your business: positive review content.

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 name 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 good behavior, it's powering positive marketing. Additionally, make sure you’re posting the reviews up on the employee board for all to see.

5. Sales Contests

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

For example, if it’s the second to last week of the month and you notice you’re cutting it close with regard 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 through 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 use 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.”

6. Referral Bonus

Next is a "Referral Bonus" for referring a new, quality member to your restaurants team.

CareerBuilder found losing a good hire opportunity costs the business on average $30,00.

How much do you pay for recruitment? What is 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.

This referral bonus activates 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.

What Restaurant Employee Incentive Prizes Work? 

Now for the fun stuff: let’s talk about prizes.

Before we get into prizes that actually incentivize, let’s quickly touch on the do-not’s. If the incentive prize is weak, your staff will feel unmotivated to work any harder and may potentially be offended that you’d even offer something so worthless.  

Like swag: stop rewarding your staff with the free promotional materials you get from distributors and vendors.

Your staff doesn’t care about key chains, 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 sitting are in a cardboard box in your dry storage.

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

So now the real question, what employee incentive prizes actually work?

1. Gift Cards 

Gift cards are a great incentive.

Again, choose wisely; your safest bets are practical gift cards, like one for gas, Target, Starbucks, or a cash value card from Visa or MasterCard. Only offer gift cards that are universally used. Stay away from any genre-specific gift cards.  

2. Free Food or Meals 

Free food or meals is always an easy prize – everyone needs to eat.

Giving an employee food 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.

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 and grown tired of your offerings.

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

So, try doing a gift card exchange with other local restaurants to establish stronger relationships with other leaders in your restaurant community and expand your own staff’s culinary horizons.

Trade the same amount of gift cards – say five – 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.  

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 pick which holidays are up for consideration. The employee (with stated length for prior notice) is able to be guaranteed to be off for their choice of Thanksgiving, Christmas, or New Year's. 

5. In-House Shift Coupons

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

  • choice of a section
  • no side work
  • first let go on a given 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.

6. Run A Co-Branded Contest With A Rep or Distributor

The last prize is hosting a co-branded contest with one of your distributors or vendors; having two brands contributing to the pot will yield a more substantial prize.

Talk to your reps, ask them, what brands do they have marketing dollars for? Then tell them you are interested in doing a sales contest to drive volume on that product.  Ask them, is their marketing budget willing to contribute towards incentivizing the sales contest? Getting things like local sports team or concert tickets I have found to be pretty effortless.  

As a young bartender, I was involved in a month-long Anheuser-Busch sales contest; the top ten finishers got to attend a Lakers games in the private Anheuser-Busch box, including complimentary food, beverage, and limo ride.

I remember being extremely motivated to sell and still, now almost two decades later, have fond memories of that experience.

Motivate, Incentivize, Whatever You Call It: Just Do It

American philosopher, Henry David Thoreau once told a story that perfectly paints the picture of exactly why employee incentive programs work.

He told about how he and his father were trying to get a calf out of a barn that didn’t want to go. Thoreau's  father was pushing on the calf while he pulled yet the more force the two men used and the harder they pushed, the more the young cow would resist and lower its haunches.  

Does this sound familiar? Does your staff resist when you push a strategy to increase sales or give better service? Have you found that the more you try to force a policy, the more pushback and resistance you get?   

Thoreau went on to explain how the housemaid who had been watching lent them her expertise; gently sticking her thumb in the calf’s mouth, the calf began to suckle. Then, all she has to do was slowly lead the way and the calf followed.

The principle she understood was that you can’t force a person to do anything that they don’t want to do. They have to want to do it; it must be their idea.

This parable is why employee incentive programs are so successful: the employee incentive program becomes the suckling thumb, and your restaurant staff the calf. They'll go anywhere you want if you give them the right motivation.

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Written by: Ryan Ransom

Ryan Ransom, quick to smile and offer an amuse bouche is a restauranteur and consultant from Los Angeles, CA. Sharpening his teeth on the front lines, Ryan developed a practical, hands-on, and empathetic approach to hospitality. This attitude allowed for Ryan's repeat success operating many large and well-known restaurants in Southern California. Currently, with Ryse Hospitality, Ryan consults and partners on many ongoing hospitality projects along the West Coast, as well as, creating hospitality content, training material, and runs a popular hospitality support and advice group/forum found at ryseabove.com.


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