Create a culture that means business™
Effective rewards are more than just token gestures; they are the fuel that ignites passion and dedication among employees. The right personalized rewards motivate people to exceed their goals and helps them feel seen and valued at work.
Every employee wants to feel known as an individual, and the right rewards help get them closer to that illusive feeling. The Achievers Workforce Institute State of Recognition research shows that two-thirds of employees want to receive personalized rewards rather than a generic option.
Why do employee rewards matter?
Employee rewards are an important part of an effective recognition program to retain and engage your workforce. When people are able to choose a reward that resonates with them, they are more likely to feel valued and will be motivated to work harder — and drive business results.
We all have different hobbies and habits. From books to the latest laptop, kitchen gadgets to hotel stays, the right reward will encourage us to put in the discretionary effort required to drive results. The 2023 State of Recognition research found that 39% of employees with recognition platforms say they like to save their points for a big purchase. Maybe that’s you: treasuring every recognition you receive as it gets you one step closer to your goal.
How employees use their recognition points:
1. I like to save them for a big purchase
2. I regularly spend them on small things I want
3. I look for something meaningful that will remind me of the recognition I received
*Source: 2023 State of Recognition research
Historically, work rewards have meant a watch at retirement or an end-of-year bonus. Then it evolved to a limited catalogue — choose from four watches, a laptop bag, or three pieces of jewelry. These options were uninspiring and unlikely to increase motivation.
Instead of these tired approaches, organizations should offer a marketplace with rewards of varying values where employees can browse and add items to their wish list. These tailored options act as the carrot, drawing employees ever forward towards their objectives. This is especially effective if your recognition categories align to your company values. Employees who live your values will be recognized more often, reinforcing those positive behaviors throughout the organization.
What is the most effective type of employee reward?
Tangible non-cash rewards are the most effective at driving performance, according to recent academic research. These incentives, which include gift cards, merchandise, experiences and more, lead to greater performance than a cash reward. This is partly because cash disappears into an employee’s budget — it often goes towards “needs” instead of “wants”.
The role of a comprehensive marketplace in your recognition and reward program
Employees who report having a wide range of options for using their points are 48% more likely than those with few marketplace options to say they feel meaningfully recognized at work. A comprehensive marketplace also correlates positively with engagement and productivity.
What makes a comprehensive marketplace?
Achievers Workforce Institute identified six key elements that make up a comprehensive marketplace:
· Virtual and physical gift cards in a range of amounts
· Wide range of merchandise from recognizable brands
· Branded company swag
· Experiences and travel
· Charitable donations to local charities
· Concierge service for bespoke rewards
*Source: 2023 State of Recognition research
HR leaders agree: a comprehensive marketplace drives results
On average, less than half (44%) of HR leaders with an average marketplace say their recognition program is effective at meeting their objectives. However, more than two-thirds (69%) HR leaders who have a comprehensive marketplace, like the one described above, say their program is effective. That’s a 53% increase when an organization can offer personalized rewards to its employees.
What can you do today to personalize rewards?
Driving results with personalized rewards takes more effort than the old school catalog, but it is highly impactful.
The first step is to be proactive and assess your current program. What rewards are available and how are employees interacting with the marketplace? Low usage of points may indicate that the marketplace is too limited. In addition, nudges to redeem points can be helpful with 5% of employees saying they often forget they have points to spend.
If you think a limited marketplace is the culprit, start by getting feedback from your employees on what they would like to see in the program. What would inspire them to use the platform more? Achievers Workforce Institute recommends surveying employees as well as gathering feedback through focus groups and manager conversations to ensure a wide range of workers can share their insights. HR doesn’t have a monopoly on good ideas — let your workforce co-create their own recognition program.
When you know what you need, look at which vendors offer all six of the reward categories listed above to offer employees a truly tailored reward experience.
Now you’re an expert on rewards, learn about the role monetary recognition plays in creating a culture of recognition at your company. Read the 2023 State of Recognition Report today.