Do Employee Rewards Programs Work?
Let's face it, employees love to hear the occasional "thank you" or "great job." from the boss. The warm and fuzzies come rushing in, and who doesn't love that feeling? It shows employees that their efforts are valued and appreciated. But what if you took that encouragement to the next level?
A big question employers have is, "Do employee rewards programs work?" and "Will my employees stay motivated afterward?". Many studies have shown that employee rewards programs play an essential role in a company’s culture. They create a positive atmosphere, motivating employees to continuously improve performance and increase productivity. In addition, recent research by Bersin & Associates shows that 31% of companies with employee rewards programs have a lower turnover rate.
If something as simple as verbal recognition can have such a profound effect, imagine the benefits of implementing an entire initiative program revolving around it. Let's take a closer look at exactly how employee rewards programs can motivate and promote employee engagement in your business.
Do Employee Rewards Programs Work: The Benefits of Rewards Programs
Recognition initiatives send employees a clear message that what they’re doing matters, and happy employees always make for a dynamic workplace. The following criteria show just how beneficial employee rewards programs are.
Increased Motivation and Performance
Offering rewards for employee performance will boost motivation and innovation, so workers will stay on track and maintain a positive attitude. These programs promote teamwork and give employees something to work towards. Being rewarded for outstanding performance naturally motivates employees to improve upon themselves and maintain that recognition continuously.
Increased Engagement and Productivity
When success is recognized, employees are more engaged. Being more invested in the tasks at hand translates to more goals achieved, thus resulting in increased productivity. They will also be more committed to producing high-quality work with a little friendly competition.
Improved Employee Retention
Satisfied employees are more likely to stay loyal to a company. In addition, incentives create a sense of security about their future and quality of life when you remind them that they're an integral part of the company's success.
The common denominator in these benefits is simple—a positive environment. By fostering cultural change, employees will be happy, daily operations will improve, and employers will see increased productivity and a reduced turnover rate. This all sounds pretty good, doesn’t it?
Different Types of Rewards
There are various types of employee rewards programs you can offer, and not all of them require you to make a significant investment. In fact, 82% of employees think it's better to give praise than a gift. Although, we will never turn down a gift, especially if that gift is lunch. However, it's also critical to understand that one program may not be suitable for all employees.
To create the appropriate rewards programs, start by asking these four questions.
- What am I trying to accomplish? (or what problem am I trying to resolve?)
- Who can help me implement this program?
- What are the characteristics of effective recognition? (i.e., specific, timely, values-based, etc.)
- What are the program objectives and criteria? (what's being rewarded and why)
Once you've answered these questions, you'll be able to define specific types of rewards for each objective.
Recognizing an employee's efforts in front of peers is the most popular way to show your appreciation (and we know a thing or two about being popular). Something as simple as an award certificate (One way we like to do it is the KICKBOX certificate, check it out on LinkedIn) to something as big as organizing a surprise party can go a long way. Not only will it show the employee they are valued, but it will also demonstrate to others that hard work pays off.
Like any other type of reward, public recognition may not be suitable for everyone. Certain employees might not like being in the public eye, so to speak, and may feel very uncomfortable. Be sure to note which employees prefer a different type of recognition. Innovation managers need to be hyper-aware of their employees as this can be difficult if certain employees start to feel jealous or underappreciated.
Private recognition can help show your appreciation without subjecting them to an uncomfortable environment for more conservative employees. These individuals don't require a turn in the spotlight to be productive. For example, a simple handwritten letter from management or home delivery of chocolates can boost their self-esteem.
As exciting as public encouragement can be for many, internally-focused employees may not respond well. However, they still want to be recognized for their efforts just as much as their extroverted coworkers.
Promotions or Similar Recognition
The most traditional form of recognition is through promotions. Companies are naturally expected to promote deserving employees to more prominent positions after excellent long-term performance. While you may not always be able to promote employees to a higher title, similar promotional recognition can include:
- Asking them to represent your company as an ambassador at an event.
- Including them in executive meetings.
- Giving them the opportunity to work on special projects that exceed their regular responsibilities.
Financial awards given to employees for meeting their goals are always a great motivator. It's a practical, tangible way of reflecting their contribution and dedication to the company. Consider giving bonuses, a raise, or even an educational opportunity such as a paid training program.
However, cash doesn't always exceed the value of other rewards. In fact, a study shows that "65% of employees prefer non-monetary rewards instead of monetary rewards." So while Jerry Mcquire might want to see the money, most employees would prefer a gift or lunch.
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So, to answer the question "Do employee rewards programs work?" Yes, an employee rewards program can have a profound, positive impact on your business. Employee rewards programs are a great way to boost engagement and motivation, drive productivity, and increase sales. By showing your employees that you value their time and contributions, your work environment can flourish.
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