101 Incentives Examples (Workplaces, Economics & Classrooms)

incentives examples types and definition, explained below

Incentives are rewards or inducements offered with the intention of encouraging certain behaviors or outcomes.

The concept originates from behavioral psychology and economics (Bowles, 2016) but has found extensive application in fields ranging from economics to business management to classroom practice.

An incentive embodies the principle of cause-and-effect in human decision-making processes (Brown & Greggs, 2018). In behavioral psychology, we use the language of ‘reinforcements‘ which, when strategically provided, increase the likelihood of a desired behavior being repeated (Akpan, 2020; Skinner, 1958).

  • In the workplace, employers will regularly use motivational incentives tactically to align individual behaviors with the collective goals of the organization, improving productivity and job satisfaction in the process (Kuvaas et al., 2017).
  • In economics, behavioral economists will create motivational incentives such as targeted tax breaks, interest rates, and infrastructure that will encourage desired economic behaviors (Bowles, 2016).
  • In the classroom, teachers will deploy them as an external motivator, which encourages on-task behaviors and stimulates learning (Holder et al., 2016).

Types of Incentives

The most common framework for conceptualizing motivational incentives is to divide them into tangibles and intangibles.

Tangible incentives are physical rewards or outcomes that are directly discernible to the senses.

These often include financial rewards, gifts, bonuses, or company merchandise (Hammermann & Mohnen, 2014; Yoon et al., 2015). Businesses frequently use tangible incentives to motivate employees, recognizing efforts and boosting productivity. For instance, a sales representative might receive a monetary bonus for exceeding their sales targets (Kuvaas et al., 2017).

Intangible incentives, on the other hand, are non-material rewards that are nonetheless desirable and desired by employees or students, and tied directly to the target behavior (Parida, Rao & Boopathy, 2023).

Typically, these take the form of recognition or experiences that foster personal development or a sense of accomplishment. For example, an employer might offer an employee the opportunity to lead a high-profile project as an incentive for high performance. Such incentives tap into individuals’ intrinsic motivation, not just external or material rewards, and can often lead to improved job satisfaction and increased loyalty to the organization (Yoon et al., 2015).

Incentives Examples

Examples of Economic Incentives

Tangible economic incentives encapsulate every visible and material benefit that may influence an individual’s, business’s, or institution’s economic decisions. Here are some common ones:

  • Tax credits for renewable energy installations.
  • Direct subsidies for farmers.
  • Homeowner tax deductions for mortgage interest.
  • College scholarship for top performing students.
  • Tax rebates for hybrid or electric vehicles.
  • Microloans for small businesses.
  • Startup grants for entrepreneurs.
  • Discount coupons for customers.
  • Sales promotions in retail stores.
  • Low-interest loans for homebuyers.
  • Cash back offers on credit card purchases.
  • Government grants for research and development.
  • Incentive-based pricing in utility services.
  • Cash rewards for credit card referrals.
  • Tax incentives for charitable donations.
  • Tax break for retirement contributions.
  • Direct financial aid for disadvantaged students.

Intangible economic incentives include non-monetary benefits that impact the behavior and decision-making of individuals and businesses in economic contexts. Here are some examples:

  • Market exclusivity rights for manufacturers of essential goods and services.
  • Reputation improvements from corporate social responsibility initiatives.
  • Increased customer loyalty due to superior customer service.
  • Brand recognition for first movers in a new market.
  • Knowledge and skills gained from job training programs.
  • Professional networking opportunities at industry conferences.
  • Access to new markets due to international trade agreements.
  • Increased employee morale from enjoyable working conditions.
  • Favorable public relations from sustainable business practices.
  • Increased employee retention due to flexible working hours.
  • New customer acquisition through positive word-of-mouth.
  • Enhanced corporate image through philanthropic efforts.
  • Securing a patent to protect an invention.
  • Enhanced trust and credibility with clients through transparency about processes.
  • Higher productivity due to improvements in workplace safety.
  • Competitive advantage from adopting cleaner technologies.
  • Faster decision-making by embracing digital transformation.

Examples of Workplace Incentives

Tangible workplace incentives are physical rewards given by employers to influence employee behavior and performance. Employers might leverage the following tangible workplace incentives:

  • Salary increments for stellar performers.
  • Performance-based bonuses.
  • Stock options for key employees.
  • Physical awards or trophies for special achievement.
  • Paid sabbaticals as rewards for long service tenure.
  • Gift vouchers for exceptional worker contributions.
  • Paid vacation or travel packages for meeting targets.
  • Employee discount programs.
  • Transportation allowances for commuting.
  • Free meals or subsidized food in the cafeteria.
  • Health and wellness benefits, like gym memberships.
  • Company cars for senior employees.
  • Provision of high-end work equipment such as laptops or smartphones.
  • Increased responsibility, like leading a project or team.
  • High-quality office space or locations.
  • Further education opportunities, such as sponsored workshops or certification courses.
  • Housing allowances or company-provided housing.

Intangible workplace incentives are non-material benefits employers offer to encourage employee satisfaction, engagement, and productivity. Here are some examples:

  • Recognition for a job well done.
  • Public acknowledgment in company meetings.
  • Positive feedback from supervisors and peers.
  • Opportunity for career advancement.
  • Increased responsibility and autonomy.
  • Supportive management and leadership.
  • Positive and healthy work environment.
  • Work-life balance initiatives, like flexible working hours.
  • Job security.
  • Opportunities for personal growth and learning.
  • Constructive and regular performance reviews.
  • Succession planning and the prospect of promotion.
  • Team-building activities and retreats.
  • Leadership or mentorship roles.
  • Transparency and open communication.
  • Inclusion in decision-making processes.

Examples of Classroom Incentives

Tangible classroom incentives are material rewards or penalties that educators use to encourage or discourage particular student behaviors. They tend to work best for younger children, and might include:

  • Stickers for completed assignments.
  • Candy or small treats for participating.
  • Certificates for academic achievement.
  • Trophies or medals for exceptional performance.
  • Books or educational materials as prizes.
  • Access to games or toys for positive behavior.
  • Extra recess time for following rules.
  • Special pencils or other supplies for neat homework.
  • Class pizza party for reaching a collective goal.
  • Unique badges or pins for meeting reading targets.
  • Golden tickets or prize draw entries for good behavior.
  • Extra credit points for additional work.
  • Special privileges, like being the line leader for a day.
  • Physical tokens or tickets exchanged for rewards.
  • Movie time for the class after a challenging project.
  • A new class pet for maintaining a clean classroom.
  • Field trips as a reward for consistent attendance.

Intangible classroom incentives are non-material rewards or forms of recognition that educators use to acknowledge or inspire particular student behaviors or performance (see also: intrinsic rewards examples). Some might be:

  • Praise for a job well done.
  • Public recognition in front of peers.
  • Positive feedback on assignments.
  • Increased autonomy or leadership roles in class activities.
  • Opportunities for peer tutoring.
  • Personalized learning opportunities catering to the student’s interests.
  • Choice in assignment topics or formats.
  • Encouragement to share opinions in class discussions.
  • Constructive feedback for improvement.
  • Opportunity to lead a class discussion or activity.
  • Sustained focus or attention from the teacher.
  • Public posting of student’s work in the classroom or school.
  • Increased responsibility, such as being a class helper.
  • Assignments that align with student’s talents or passions.
  • Celebrating individual progress, no matter how small.
  • Offering various roles in group work.
  • Letting students set their learning goals.


Well-targeted incentives can quickly stimulate desired behaviors, providing a measurable and immediate reward for the accomplishment of a desired task. However, these mechanisms are not without their limitations. Primarily, overreliance on tangible rewards may reduce intrinsic motivation, leading to a decline in performance when the rewards are removed.

Therefore, finding the right balance and mix of incentives is essential for long-term success, whether in the workplace, classroom, or policy-making for large-scale economic incentives.


Akpan, B. (2020). Classical and Operant Conditioning—Ivan Pavlov; Burrhus Skinner. Science Education in Theory and Practice: An Introductory Guide to Learning Theory, 71-84. doi: https://doi.org/10.1007/978-3-030-43620-9_6

Brown, D., & Greggs, A. (2018). Philosophy of religion for OCR. Polity.

Bowles, S. (2016). The moral economy: Why good incentives are no substitute for good citizens. Connecticut: Yale University Press.

Hammermann, A., & Mohnen, A. (2014). Who benefits from benefits? Empirical research on tangible incentives. Review of Managerial Science8, 327-350. doi: https://doi.org/10.1007/s11846-013-0107-3

Holder, K., Mateer, G. D., Rousu, M. C., & Tierney, J. (2016). Beyond Grades: Using Incentives to Motivate Students. SSRN.

Kuvaas, B., Buch, R., Weibel, A., Dysvik, A., & Nerstad, C. G. (2017). Do intrinsic and extrinsic motivation relate differently to employee outcomes?. Journal of Economic Psychology61, 244-258. doi: https://doi.org/10.1016/j.joep.2017.05.004

Parida, B., Rao, V. R., & Boopathy, C. (2023). Role of Intangible Ways in Motivating and Appreciating Employees: An Empirical InvestigationRivista Italiana di Filosofia Analitica Junior14(1), 1055-1060.

Skinner, B. F. (1958). Reinforcement today. American Psychologist13(3), 94.

Yoon, H. J., Sung, S. Y., Choi, J. N., Lee, K., & Kim, S. (2015). Tangible and intangible rewards and employee creativity: The mediating role of situational extrinsic motivation. Creativity Research Journal27(4), 383-393. doi: https://doi.org/10.1080/10400419.2015.1088283

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Dr. Chris Drew is the founder of the Helpful Professor. He holds a PhD in education and has published over 20 articles in scholarly journals. He is the former editor of the Journal of Learning Development in Higher Education. [Image Descriptor: Photo of Chris]

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