Not sure where to start or how to improve your employee rewards and recognition programmes? You’re not alone. According to our study with HR.com, 57% of HR leaders say finding rewards that their team members will value is a big challenge. However, successful employee rewards programmes have a powerful ROI—and they're worth the investment. Rewards help employees feel appreciated and recognition and appreciation increase engagement 2X. When employees are engaged turnover goes down by as much as 31% productivity increases by as much as 17% and your culture will thrive.
We want to help your organisation be more successful and we've created this guide to walk you through the who, what, how and why of employee rewards. Let’s start with the basics and remember: you can always skip ahead to other sections if you like.
What Are Employee Rewards?
An employee reward is anything that makes an employee feel valued, appreciated and seen.
Employee Rewards and Incentives
An employee reward is anything that makes an employee feel valued, appreciated and seen. It's no secret that pretty much everyone loves to feel appreciated and that the work they do matters—and that's precisely why rewards at work are so important.
When you reward someone for doing something that increases productivity (or any other positive action), they’re likely to repeat that action. Productivity continues to go up, and you will want to reward your employees again and again. Other employees will see this cycle of rewards and recognition and will have a clear picture of what they can do to be rewarded too. Rewards and recognition drive behaviour, reinforce company values and create a positive culture the likes of which most HR professionals only dream of. Rewards and recognition are the engine that powers a productive, efficient, positive workplace.
While they're not the ONLY part of employee engagement, rewards are a critical piece of your employee recognition programme to foster engagement and drive behaviour. Rewards are often given when an employee exhibits a positive behaviour or produces an amazing result. Rewarding employees reinforces behaviour—and the great thing is that rewards can be used as incentives too.
Incentives are rewards that have a previously announced set of requirements and are earned by meeting those requirements. For example, establishing a sales quota incentive with rewards is a great way to motivate employees to achieve certain goals. It doesn't have to be only about sales quotas either. Here are some ideas for incentive programmes in your own organisation:
- Sales incentives (we know we mentioned this already but we didn't want to leave it out!)
- Customer satisfaction ratings
- Personal and professional goal achievement
- Safety trainings
- Programme participation
- Community involvement
- Professional growth
- Internal company surveys
- Health programmes
- Leadership trainings
- New software trainings
- New policy trainings
- And more!
Incentives and rewards give employees a focus for their efforts. One study showed that incentive programmes increase performance by an average of 22%, while team incentives can increase performance by 44%. That's a finding HR leaders simply can't afford to ignore.
Pro tip: Incentivising employees is easily automated with Awardco Earn programmes. You can set up goals or tasks in your Awardco platform and employees can redeem points after they meet the qualifications you set. You get to choose the tasks or goals and the amount of points that get awarded—in other words you're in the captain's chair with all the controls at your fingertips, and you can incentivise whatever is important to your organisation.
How Do Employers Typically Reward Employees?
Traditionally, rewards in the workplace have been similar to trophies (let's be real: sometimes they've been ACTUAL trophies). Employers would hand out items like a plaque, a pin or a certificate for recognition of achievement. They might look nice and be symbolic of effort and results, but they're often left behind when the employee moves on. One of our clients mentioned that before they had Awardco 50% of the service anniversary awards they gave out were left behind when employees left or retired. That's a lot of plaques, pins, certificates and pointy acrylic awards that go in the dumpster. Yikes.
We're not saying rewards like that don't have a place. It's important to note that 71% of HR leaders say their organisation has at least a service award program, but 81% of those surveyed feel like their recognition programmes in general are ineffective. Could it be that traditional service awards and rewards programmes don’t work because they aren’t as valuable or meaningful to the recipient? What do you need to consider when rewarding employees? Let's dive in.
How Should You Reward Your Employees?
There are seven key traits for an effective reward. Make sure your rewards are:
Meaningful.
As we discussed before, a gift that isn’t what the recipient wants isn’t going to be as valued. You can make a reward meaningful when you know what your employees like and dislike. Give them choices for how they’d like to be rewarded. Providing choice is a great way to convey value, because when your employees have those choices they'll feel cared for, and subsequently will care more. It's a win win.
Value-driven.
Are you giving a reward that reflects your company values? First start with establishing your company values so everyone knows what they are, then recognise and reward the people who exemplify your values. Tying your values to rewards and recognition is a great way to reinforce and drive the behaviour you'd love to see in your employees.
Timely.
Reward behaviour as it happens. Studies show that giving rewards earlier, or immediately after a positive behaviour, has a bigger benefit than rewards that are delayed. Think about it: if you went above and beyond in Q1, but weren't recognised for it until the holiday party in December... that feels a little lacklustre, doesn't it?
Consistent.
Reward consistently across the organisation, and make sure the right things (i.e. your values) are being rewarded. Communicate the recognition and reward strategy throughout the organisation so everyone is on the same page—and be sure you follow through with that strategy so employees can depend on it.
Frequent.
Rewards should be for special occasions and extra effort, but it should still happen often. You can build automated rewards into your rewards programmes to ensure reward frequency and celebrate things such as birthdays, service awards, holidays, quarterly rewards, etc. The more you reward, the more your employees will appreciate it.
Pro tip: Give managers and employees a rewards budget so more people are able to give out rewards.
Special.
The best rewards evoke emotion. Try not to just dump a reward on someone’s desk without any thought, but connect that reward with sincere recognition. Highlight the reasons for the reward with sincere appreciation and specific callouts to what the employee is being rewarded for. Rewards and recognition should go hand-in-hand, and will have much more weight when they do.
Specific.
If you don’t specifically highlight why the person is being rewarded they may not know how to keep being awesome. The more specific your rewards & recognition are the more meaning they have. Specificity is key!
Why Rewards?
Rewards (and recognition) are some of the best ways to improve employee satisfaction and engagement. Without rewards, employees may feel invisible or undervalued. Rewards with meaningful recognition have been proven to increase engagement by nearly 2X. Increased engagement can reduce turnover by 31%, increase productivity by as much as 17%, and even decrease the amount of defects in your products.
Furthermore, rewards & recognition power your company culture. Your culture will improve as your rewards and recognition programmes improve. It's as simple as that. As you reward positive behaviour you’ll see more of it. You can also get peers involved in recognising and rewarding each other, which will only stoke the fire. When you have a company full of people who appreciate each other and express gratitude you’ll have happier employees. We know first hand, because we practice this in our own organisation.
Also, when considering the impact of rewards, it's important to note that not every reward has to be earned, per se. You can also give out rewards that apply to everyone in your company and include everyone in celebrations such as company parties, company birthdays, national employee appreciation day (it's the first Friday in March, just FYI), and more. Just because someone isn’t hitting huge goals or breaking records doesn’t mean they are contributing to your organisation, so be sure you reward everyone as often as you can. And if that's a daunting task, remember that automation can make it a breeze.
In Summary
Rewards in the workplace lead to increased engagement and happy employees. This will create a snowball effect that influences every part of your company—including the bottom line. Considering the powerful ROI that comes from well-designed rewards programmes you may want to start implementing these ideas as soon as you can. We get into how to set up programmes in the next section.
Employee Reward Programmes
Now that you know why employee rewards are so important (if you need a refresher check out the "Basics" tab above!) let’s talk about the what and the how. Employee rewards programmes are any internal initiatives that are designed to reward employees outside of their normal compensation. This reward can consist of a tangible item an experience or the opportunity to select a reward from a set catalogue.
What Are Employee Reward Programmes?
Employee reward programmes are any internal initiatives that are designed to reward employees outside of their normal compensation.
How do you reward employees? This might seem like a straightforward question, but when you have thousands of employees it can be quite the task. Setting up rewards & recognition programmes doesn't have to be a huge headache, though—and putting in that effort will pay dividends.
Pro-Tip: If you're struggling to work rewards into your existing budget, think of them as part of your overall compensation plan and budget accordingly. When you include rewards in the budget from the get-go, it suddenly becomes much easier. Think about salary as a baseline, bonuses as something nice and then rewards as something extra special—all included in compensation.
How Do Employee Rewards Programmes Work?
The most effective employee rewards programmes cater to what your organisation values most, and help drive that desired behaviour. Here are some questions to consider while creating your rewards programmes:
What company values do you want to reinforce?
If you have overarching values that focus on the mission of your company, make those the focus of your rewards programmes, too. Rewards aren't just about numbers and hitting quotas, they're about building a positive company culture and driving the behaviour you'd like to encourage in your organisation.
What specific behaviours do you want to encourage?
Outside of reinforcing company values, rewards can incentivise specific behaviours like hitting goals, completing surveys, going through trainings and more. Make sure you communicate clearly to your employees that certain behaviours will help them get rewarded—and see participation skyrocket.
How will you measure behaviour?
Making sure an initiative is measurable is key to communicating value to executives and company leadership. Mark a few waypoints and have some specific measurements in mind to make sure that you can show the effectiveness of your programme. Some metrics you might consider include participation, amount rewarded, amount redeemed (if you use a points system) or even overall organisational retention.
What budget do you have for rewards?
Make sure you're operating within existing budget parameters. There's no better way to alienate leadership than to be uncommunicative and go over budget. Furthermore, over-promising and under-delivering on rewards will alienate your employees, too. Be sure to get an approved budget and consider delegating budget to different managers. Communicate and follow through!
What will the rewards be?
Will you reward with a specific item, a catalogue of items, experiences, or perhaps give employees the power to choose from millions of options?
Pro tip: Awardco has a unique partnership with Amazon Business that allows us to provide hundreds of millions of options for rewards. The most powerful rewards network on the planet at your fingertips!
Who will you reward?
Setting the parameters for rewards is imperative. Will you recognise group effort or individual accomplishments? Accomplishments of specific goals or participation in certain programmes? And don't forget, when you reward your team as a whole everyone can celebrate together, and that will have a positive impact on your work environment.
How will management buy-in?
This is important throughout all stages of the process. Engagement for programmes goes up when management is involved. Plus, as we discussed above, getting budgetary approval before you move forward is key, and management will be more likely to approve if you have a solid plan and clear measurements of success.
How will we promote the programme?
Make sure all team members know what the rewards programmes are and how they can participate. Also, remember that you’ll have to communicate often and likely repeat yourself to get good engagement in these programmes. Consider communicating in different ways such as emails, company meetings, T.V. graphics, team announcements, and more.
The Benefits of Employee Rewards
Do employee reward programmes actually work? Yep, they definitely do. Here's why:
Rewards feel less transactional.
Rewards are special and come outside of normal compensation. They're not just another direct deposit into your bank account. They're unexpected—and as such they have the potential to truly delight.
Rewards ignite the imagination.
Rewards are special. If it's monetary many people consider it "fun money," and feel more free to spend it on something they want rather than something they need. The possibilities provided by an unexpected windfall can ignite the imagination as people plan for what they'll do with the reward. Will they go on a trip? Get that sweet pair of headphones? Try a new restaurant?
Rewards give permission.
All too often many people feel guilty about spending money on themselves, but rewards are a gift to be used for something special. They afford that freedom to get that T.V., or that one item that's always been just out of reach.
Rewards are easy to share on social media.
“Look what my company gave me!” or “Look what I used my rewards points for” make for great social media posts or water cooler conversations. No one is really going to take a picture of a bonus cheque (at least not anyone we know), but they will take photos of their holiday, their new shoes, their awesome new laptop, or anything else they might receive.
Rewards create positive association.
Every time your employees lace up the shoes they got or sit down to enjoy a nice cup of tea from their new tea press, they'll remember where they got it. Instead of a generic gift that might end up in a landfill, your employees will have positive feelings every time they use or remember the reward they received. Positive association has a lot of power—real, tangible power in building employee loyalty.
Managing Employee Rewards
96% of organisations have some kind of recognition programme, but 81% of HR leaders don't feel like it's very effective. Why don’t they work? The people we talk to say that most often the complaint is frequency and inclusion—that rewards aren't frequent enough, nor do they include as many people as possible. All too often rewards seem reserved for those high-performing sales reps rather than the quiet workhorses of the organisation.
Here's how to introduce greater frequency and inclusion with your rewards and recognition programmes:
Set up a “recognise often” programme.
Get everyone involved! Encourage peer-to-peer recognition, manager to peer recognition or even incentive programmes that anyone can participate in as they complete certain tasks. Including employees in their own recognition is a powerful tool in any HR leader's kit.
Automate annual rewards.
Remembering every workiversary, birthday, or holiday bonus is a challenge no matter the size of your company, but there are ways to automate this process. Consider rewarding on the following dates:
- Service Anniversaries
- Birthdays
- Company Birthday
- Employee Appreciation Day (it's the first Friday in March)
If you add the above holidays to your programmes you can be sure your employees are rewarded at least four times a year, which in our experience is nearly 300% more than most companies. Think about that for a second: even if you did ONE more programme than the normal service anniversary you're already way above average in how you reward employees.
Pro Tip: Use employee rewards & recognition software like Awardco to help you automate and manage your rewards so that you never miss a birthday or service anniversary.
Automate incentives with Earn programmes.
Awardco’s Earn programmes allow you to set up goals or tasks you want to incentivise. Once an employee completes the task they can claim the points they’ve earned. Not only will they feel more rewarded, they'll feel like they have more control over their own rewards.
Automate even more.
In addition to automating programmes, you can also automate reminder emails, rewards, anniversary celebrations, onboarding and more. Starting to get the picture? We're all about reducing your workload through automation.
Give employees more choices.
The power to choose cannot be overstated. If you were forced to eat something, even if you liked it, you wouldn't like it as much as if you chose it, right? The same goes for employee rewards. With Awardco you can give your employees access to the world’s largest reward network or you can narrow down catalogues for specific themes. We're here to empower you to give more back to your employees. Simple as that.
Employee Rewards and Recognition Catalogues
With Awardco you get access to world’s largest reward network, including the following categories:
- Amazon Business. You can find just about anything you want on Amazon Business, from iPads to sweets to massage chairs to burrito blankets.
- Charities. Employees can use their points to donate to certain charities. Not everyone wants stuff, but they can feel good knowing their reward is making a difference.
- Travel and hotels. The perfect reward for the person who loves experiences over things.
- Event tickets. Tickets to a show or theme park are a great way to make some memories.
- Local deals. Get discounts on specific things in your area (will vary depending on location).
- Gift cards. Between restaurants and popular stores, there is a gift card for everyone.
In addition to the largest reward network on the planet, Awardco’s technology automates your processes to ensure a consistent experience across your organisation, no matter if they're in Dallas or Dubai. More choices for employees and an easier experience for admins. It's a win-win.
Want to see for yourself? Get a Demo.
In Summary
Employee rewards are best served within cohesive strategic programmes that answer key questions for your organisation. When done correctly, employee reward programmes are far more powerful than cash or gift cards alone. The last box to check when creating your employee reward programme is to add a little creativity and we'll cover that next!
Employee Reward Ideas
A brilliant reward is memorable and meaningful. It will make any employee feel valued and appreciated. Keep that in mind as you consider these specific ideas. You know what will work for your team members, but more importantly, your team members know what will be rewarding to them! Go ahead and ask them what they would find rewarding. When in doubt, giving them the power to choose their own reward is invaluable.
When to Use Rewards
Don’t forget these opportunities for rewards:
Service anniversaries.
Anniversaries are important both in life and in work. As humans we mark the passage of time with anniversaries and work anniversaries (we like to call them workiversaries) are a great way to mark and celebrate the contributions of each employee. As you celebrate and reward people for staying with you retention, engagement and productivity will all go up. Also, keep in mind that the longer someone stays with you the more meaningful the reward should be.
Incentives.
Incentives are programmes that employees can participate in and earn rewards. Rewards for hitting quota, participating in trainings, completing professional development courses or wellness initiatives all can be incentivised with rewards.
Life events.
Birthdays, babies, graduations oh my! Pay attention to an employee’s life and find ways to support them. There's no better time to show you care and solidify how your employee feels about your organisation, than rewarding them for a life event.
Peer-to-peer rewards.
If you want to boost participation in rewards & recognition, get as many people involved as possible! Managers are often busy but they don’t have to do it alone. Engage your entire workforce with a peer recognition programme, even if it's non-monetary. As you engage more employees in rewards and recognition you’ll see a more positive impact.
Now that you have a baseline for rewards, let’s think outside the box a little.
Special occasions & the overlooked employee.
If you really want to make a splash in your company culture, consider how to reward jobs that often get overlooked. These oft-forgotten employees are so important to the entire process of your company.
Consider making a reward for the most floors mopped, most lines of data entered or most hours spent on the phone. These tasks often don’t feel important, even to the person doing them, but as you reward behaviour you'll convey true value. In a recent study it was shown that 74% of employees who receive praise often strongly agree that they feel that their work is valuable and useful. The bottom line there? Reward and recognise everyone, and do so often. Help each employee understand that even the most mundane tasks are an important part of the big picture.
Rewards Ideas to Get You Started
Awardco reward points.
Sure, we're a little biased, but this reward is foolproof. If you give your employees points in the Awardco platform they can redeem those points for anything they want. Choose from millions of items on Amazon Business, event tickets, charitable donations, company swag, local gift cards, local experiences and much more.
Bonus boxes.
Have you ever wanted to send a team member a custom care package full of awesome items? Well, now you can! Fill your bonus boxes with any reward you like, from fun and fresh to high-end and classy. Consider a themed experience like:
- Summer adventure with sunscreen, water bottles, outdoor games, a jacket etc.
- Winter themed with gourmet hot chocolate, fancy scarves, hats etc.
- Art night with paint kits, coloring books, clay etc.
- Game night with board games, snacks, a gift card for dinner etc.
- Educational experience with books, gift cards to a museum, subscriptions to online courses etc.
Pro tip: You can include gift cards and branded company swag with any of the themes and reinforce that company culture connection.
Time off.
PTO can be a great reward. Time off helps people rest and relax so they can come back refreshed. Plus it shows you value work-life balance, which can improve your company culture and help with recruiting top talent. Time off can even come in the form of an extended lunch break or afternoon off too.
Volunteer opportunities.
Give time for employees to get involved in the community and give back. Volunteering has been proven to make people happier and more grateful, and these benefits cannot be overstated when the employee comes back into work.
Charitable donations.
Some people might not want a reward for themselves, but may have causes they care about. Donations are a great way to let your employees have an easy way to give to their community and those in need.
Experiences.
Some studies suggest that the younger generations value experiences over things. This can be especially important if you've got a largely young workforce! Consider offering travel experiences, local excursions, concert tickets and more. Anything that creates an experience for your employees will be a win-win for your organisation.
Professional development and education.
Whether you pay for classes, give employees time to work on a new skill, or bring in people to speak on specific topics, there are many ways to use professional and individual development as a reward.
Gift cards.
The workhorse of employee rewards, gift cards have an important place in any rewards strategy. Some people love to eat out or go shopping, and a gift card is one of the best ways to help employees enjoy what they love.
A thoughtful recognition.
A handwritten note or an ecard can be one of the most meaningful rewards, especially when it is genuine and specific. Encourage these non-monetary rewards among peers as well as from managers.
In Summary
This guide is just the beginning. There are so many ways to recognise and reward employees and the only limit is your imagination. Remember this as you work to change your rewards strategy: as you improve your rewards programmes your employees will be happier and your company culture will thrive even with the smallest incremental changes for the better. Refer back to this guide as you set up new programmes and broaden the ones you already have.