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One of the best feelings in the world is to be recognized and rewarded for your hard work—the same holds true in school, sports, competitions, and, of course, the workplace. When people do an exemplary job with their work, they should be rewarded.
Rewarding employees is essential for retaining them and keeping them motivated. And while 40% of Americans have said they’d work harder if they were recognized more, a staggering 82% of them don’t feel recognized or rewarded for their contributions.
When employees feel recognized and are rewarded, they are more productive, more happy, and more loyal to the company. But the “how” of performance rewards is vital—the wrong reward given in the wrong way can do more harm than good.
Here’s what you need to know about the why and the how of rewarding employee performance.
- Performance rewards build motivation, commitment, satisfaction, and retention
- Rewards should be personalized and meaningful to each employee
- Monetary, non-monetary, and career growth rewards are all viable
Benefits of Rewarding Employee Performance
Every measure of employee morale, productivity, performance, and retention go up when leaders regularly recognize employees’ work. These benefits should be enough to show why regularly rewarding performance needs to be a priority. Here are a few other benefits to add icing on the cake:
- Makes employees feel more valued
- Increases motivation and commitment to job responsibilities
- Positively impacts job satisfaction
- Creates role models for employees to look up to
- Incentivizes teamwork and collaboration
- Creates a company culture of appreciation
Let’s simplify these benefits—when an employee does good work and the company rewards them, they feel valued and appreciated. Those feelings raise their satisfaction and loyalty, which cuts down on turnover or disengagement. This leads to greater productivity and repeated high performance, which leads to more rewards. Pretty cool cycle, right?
Now let’s take a look at how you start this cycle from square one. Remember, employee performance rewards need to be done right in order to enjoy these awesome benefits.
How to Reward Employee Performance
Rewards are amazing when they’re done right—so let’s look at some ways to make your employee performance rewards as effective as possible.
1. Offer Personalized Rewards
First things first, you have to learn how each employee wants to be rewarded. A pizza party might be fun for some but anxiety-inducing in others. A lunch with the CEO could be rewarding for one person but feel generic for another. A handwritten note of gratitude may feel genuine for some but feel cheap for others.
In order for an employee reward to really work, it needs to communicate your understanding of that person. After all, if you really value and appreciate them, you’ll know how they want to be rewarded. And if you don’t know what your employees will like—don’t be afraid to ask! People will appreciate getting a say in how they’re rewarded.
Bonus tip: Awardco lets employees choose the reward that is most meaningful to them, taking the pressure off your shoulders and making rewards easier than ever.
2. Mix Monetary and Non-Monetary Rewards
While there are mixed feelings on how effective monetary vs non-monetary rewards are, the fact remains that gift cards or cash are great for some people. (See tip number one—simply ask your employees what they want!)
Incentives and bonuses are traditional ways to reward high performance, and they can be very effective. However, they can also foster unhealthy competition, be perceived as unfair, and achieve only temporary results.
By mixing in non-monetary rewards, such as public/private recognition, professional development opportunities, extra PTO, and even a simple “thank you,” you can make rewards more far-reaching and, well, rewarding than ever before (without breaking your budget).
3. Provide More Responsibility
Employee responsibility should correlate with how capable they are—and when employees have stellar performance, they are likely prepared to handle more responsibility. And by rewarding employees who excel with more opportunities to excel, you show your confidence in their abilities.
Once again, don’t be afraid to ask them. Don’t give an employee the lead role on a project without making sure it’s something they’re interested in. Rewards shouldn’t be overwhelming; they should be rewarding!
4. Invest in Their Growth
Similarly to providing more responsibility, you can reward employees with professional development opportunities. For those employees who go above and beyond, professional development can help them gain new skills, get promotions, and feel more invested in the work they do.
Professional development can help employees build confidence, hire from within, and close skill gaps. Plus, professional development raises job satisfaction, retention levels, and attracts better talent. As you reward high performers with opportunities to build their skills and gain more confidence, they’ll know you care about their contributions.
The Role of Employee Incentives
Incentives are a great way to drive behavior and reward results. What you have to remember when setting up incentives is make them far-reaching and inclusive for all employees. They should reward everyone who tries their best, not just the few top performers.
Bonus tip: Awardco is all about flexible rewards and recognition, and that includes incentives. You can customize your incentives for sales goals, wellness initiatives, performance, and even safety program participation.
Summary of Employee Performance Rewards
The key to remember is when employees do a good job, they should be rewarded. The reward itself doesn’t have to be physical or monetary, abstract or non-monetary—there are no set rules on how to offer the perfect rewards. What’s important is showing gratitude with rewards, gifts, and opportunities that are meaningful for each employee.