Look at the recently compiled 50 Best Companies to Work for in Ireland list and you will see that the majority of companies have some sort of incentives package in place.

While the organisers of the event stress that fostering good communications is much more important than offering extras, a good incentives package can help attract and retain staff.

Irish companies are now becoming more American in their approach to staff satisfaction. In fact, according to a survey carried out by Mercer Human Resource Consulting last year, the total benefits cost in Ireland is approximately 27pc of the national pay average. While this figure includes PRSI, it also includes voluntary benefits like retirement, death, disability and medical plans as well as other incentives that are not typically provided for employees.

"We certainly find that, as the business environment becomes more competitive, companies are increasingly looking to make their workforce more competitive. And so many companies have a bonus scheme in place. These are really geared towards improving performance, " says Brian Duncan, head of human capital business for Mercer in Ireland.

But how can employees distinguish between a good incentives package and candy floss attractions? "I think employees need to look at the total package they're getting.

It mightn't necessarily be in the employee's best interest to join a company that doesn't offer something like professional development, for example, " says Duncan.

"It depends on what level you're coming in at. If you're coming in as a young person, you need to make sure the salary is competitive. One of the things to look at is what personal development you're going to get. It's far more important a company gives you help with professional advancement. Does it help with fees? Does it give study leave? Quite often companies that provide these things are modern companies. It's not the yoga per se that's attractive; it's the fact the company thinks it's important."

Duncan agrees that more than a bonus scheme is needed for companies to be successful. "Making it clear to employees what's expected of them, setting clear objectives and coaching and mentoring staff is vital.

Increasingly, companies are beginning to realise if you only have the bonuses and don't have the other elements in place, it's not going to work."

While incentives packages may not be the entire solution to employment productivity, they can go a long way in nurturing good relations between staff and management. Set up in 1998, Win Win offers discount and reward programmes to businesses across Ireland. The company provides discounts with several retail, accommodation and leisure outlets.

Motivation and recognition are two key reasons behind offering rewards and incentives to employees, says James Lenehan, managing director of Win Win.

"Recognition tends to be based on making sure your employees are happy, " he adds. "You have to look at your staff, see what the demographic is and see what kind of things stimulate them."

Win Win sees employee benefits as providing the chance to build team spirit and morale within an organisation, while also increasing employee retention.

Companies looking to motivate staff should also use an incentives scheme, says Lenehan. "Introducing something like loyalty points will incentivise and motivate staff to perform better and increase sales. Offering things such as luxury hotel breaks, holiday vouchers and iPods should boost performance."

However, he concedes that incentives are only part of the solution.

"Good management, good communication and feeling they're appreciated will lead to satisfied employees, which will lead to greater profits. Motivated and incentivised people sell more , , end of story."

Companies considering offering some sort of benefit-in-kind should be aware that the Government has brought in an exemption whereby the employer can give out 250 free of charge to an individual. For this, Win Win could provide a holiday voucher worth about 400, says Lenehan. By coming in under the threshold and not involving cash, both the employer and employee can avoid paying PRSI. A holiday or shopping voucher is also more socially acceptable, according to Lenehan.