Rewards and recognition are powerful ways to inspire employees, but choosing the right rewards isn’t always easy. You have to consider the specific value of the employee’s contribution, and you have to determine which rewards best illustrate your gratitude while meeting the personal needs of the employee. There are numerous types of rewards you can give, and the most popular ones aren’t the ones you might be thinking.
Why Employee Rewards Are So Important
If your employees don’t feel valued, they’re not going to give 100%—and they might even start shopping around for other career opportunities. According to a survey from the Society for Human Resource Management (SHRM), 79% of employees work harder when they feel valued in the workplace.
The recruitment marketplace is more competitive than ever, and the cost of turnover is high (about 20% of the departing employee’s salary, according to some estimates). It’s in your best interest to ensure that your employees feel valued. It’s a simple thing, but it can reduce turnover, increase engagement, boost productivity, and maximize morale. It can have a ripple effect that benefits your entire company culture.
When to Reward Employees
Certain occasions call for employee recognition. While there’s never a bad time to express your appreciation for someone’s hard work, there are certain milestones and achievements that you would be remiss to overlook.
If an employee consistently hits the mark, exceeds expectations, and proves themselves an asset to the organization, they should be recognized whether through performance bonuses, verbal recognition, or other rewards. You can track and honor this type of excellent performance using a company culture platform with a built-in employee reward system.
Not to be confused with general good performance, a special achievement can be a one-time event that deserves recognition. Examples may include hitting a new sales record, staying late to finish an important project, or helping out a new employee in a time of need.
In today’s corporate culture where “job hopping” has become the norm, an employee anniversary is a big deal. It demonstrates loyalty and commitment to the organization. The higher the anniversary, the bigger the deserved reward.
The Christmas bonus or holiday bonus is one of the longest-standing corporate traditions for expressing appreciation. These annual bonuses are a simple way of saying, “Thank you for the hard work you’ve contributed all year long.” Even a small or modest holiday bonus can make a big impression, and it doesn’t have to be a monetary reward.
Just to Say Thank You
Research shows that employees appreciate spontaneous rewards. In fact, the unexpected rewards are some of the most welcome. They demonstrate genuine appreciation without a hidden agenda or appeal to tradition. If you do offer spontaneous rewards, make sure to do it regularly, recognizing different employees each time. You don’t want to give the impression of favoritism.
Types of Employee Rewards
There’s a lot of debate about the best type of employee reward. Monetary or non-monetary? Intrinsic rewards or extrinsic rewards (in other words, basic recognition or tangible rewards)? Practical or sentimental? There is no single right answer because different people value different types of validation. But any type of genuine reward can hold enormous meaning to the recipient.
Monetary rewards can include raises, bonuses, cash gifts, stock options, gift cards, or anything with a set dollar amount that the employee can use as they desire. Some companies will offer monetary rewards in the form of quarterly bonuses (sometimes contingent on the results of quarterly performance reviews), and other companies will offer these rewards on a case-by-case or as-needed basis.
A Gym Membership or Other Lifestyle Perks
Gym memberships have become popular incentives in corporate culture. For the employee, it’s a great way to relieve stress and remain on track with personal goals outside of the workplace. For the employer, it’s a great way to encourage team-building and promote your company wellness initiatives. If you choose a program that offers gym access, fitness classes, yoga classes, and online classes, you can be sure that you’re appealing to all of the varied fitness needs of your team members.
While a monetary reward might seem like the ultimate prize for a hard-working team member, research shows that 65% of employees actually prefer non-cash incentives. This is especially true of millennial workers. One of the simplest and most effective rewards you can offer is positive feedback—the acknowledgement of a job well done. Verbal praise clearly demonstrates that you notice and appreciate a team member’s hard work. Global studies have found recognition of hard work to be more motivating than higher compensation, autonomy, and even promotions.
We’ve already established that genuine recognition in the workplace is one of the most motivating rewards you can offer. But not all recognition is verbal. Written praise can have even more of an immediate and lasting impact than verbal praise. But while written praise can be as simple as an email or Slack message saying “Great job!”, it carries much more significance when the message is personal and specific. A formal letter of praise and acknowledgment can go a long way.
A Peer-to-Peer Recognition System
Peer-to-peer recognition is verbal or written praise that comes not from the leadership but from an employee’s colleagues. To encourage this type of recognition in the workplace, you need to create an outlet for it. For instance, you might establish a Slack channel for “Thanks and Shout-Outs” or send a monthly company-wide email encouraging employees to share how their fellow team members have helped them in the past 30 days. When your employees recognize each other’s contributions, it makes it easier for you as the leader to determine when other rewards are warranted. Often, employees will highlight valuable team member contributions that you didn’t even know about.
Plaques and Awards
Speaking of written praise, personalized awards can also be invaluable. These may be given out during performance reviews, at an annual company awards ceremony, or on an impromptu basis. They’re an effective form of written praise that employees are proud to display. They also make great resume builders (but hopefully your employees are so engaged that they’re not even thinking of taking their talents elsewhere).
If an employee demonstrates the ability to work productively with minimal oversight, more autonomy may be granted. But it’s not enough to simply scale back the level of supervision. The employee needs to know that their newfound autonomy is the direct result of a job well done. So tell them, but also reinforce the notion that with greater freedom comes greater responsibility.
Flex days afford employees the opportunity to take flexible hours, either on a specific day or on a regular basis. If it doesn’t interfere with your business operations, this can be an excellent motivator. You might also consider rewarding team members by letting them work from home on a specific day (or days).
Promotions & New Opportunities
If an employee consistently demonstrates excellence in their work, it may be time to promote them to the next level of authority or responsibility, assuming such a role is available. Career growth is a key driving factor for ambitious team members, and a promotion (often coupled with a pay raise) demonstrates to them that their hard work is paying off. There’s also an additional benefit for you, the employer. You gain a new higher-level team member to help keep the operation flowing smoothly.
An Employee Reward System
Employee recognition platforms are changing the game for company culture. Your employees sign up as members of your organization, and you assign them points based on their contributions. The employees can then trade those points for gift cards, apparel, meal kits, fitness memberships, or whatever else is available in the rewards marketplace. It’s a great way to enhance their quality of life while promoting greater engagement in the workplace.
How to Build a Successful Employee Rewards & Recognition Program
Rewarding and recognizing employees will increase your company’s productivity, maximize employee engagement, and promote the kind of excellent company culture that breeds loyalty and commitment. But if you want to be successful, there are a few important rules to keep in mind:
- Be consistent. You can’t just intermittently reward employees when you’re thinking about it or when morale is decreasing. It needs to be a consistent, ongoing process.
- Set up a system for quantifying people’s achievements. For instance, you might establish specific career goals for each employee and create an internal web form for peer-to-peer recognition. Little things like this will make it much easier for you to identify when a reward is in order.
- Recognize team members publicly when appropriate. Don’t make it a strictly private thing.
- Use an employee reward platform to equip team members with valuable perks that they can control according to their lifestyle needs.
The most important thing is to just do it. Reward your employees, make them feel appreciated, and discover the enormous benefits that come from establishing a culture of recognition.