Not sure where to start or how to improve your employee rewards and recognition programs? 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 programs 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 organization 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 behavior, 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 program to foster engagement and drive behavior. Rewards are often given when an employee exhibits a positive behavior or produces an amazing result. Rewarding employees reinforces behavior—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 programs in your own organization:
- 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
- Program participation
- Community involvement
- Professional growth
- Internal company surveys
- Health programs
- 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 programs 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: Incentivizing employees is easily automated with Awardco Earn programs. 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 incentivize whatever is important to your organization.
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 organization has at least a service award program, but 81% of those surveyed feel like their recognition programs in general are ineffective. Could it be that traditional service awards and rewards programs 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:
As we discussed before, a gift that isn’t what the receiver 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.
Are you giving a reward that reflects your company values? First start with establishing your company values so everyone knows what they are, then recognize and reward the people who exemplify your values. Tying your values to rewards and recognition is a great way to reinforce and drive the behavior you'd love to see in your employees.
Reward behavior as it happens. Studies show that giving rewards earlier, or immediately after a positive behavior, has a bigger benefit than rewards that are delayed. Think about it: if you went above and beyond in Q1, but weren't recognized for it until the holiday party in December... that feels a little lackluster, doesn't it?
Reward consistently across the organization, and make sure the right things (i.e. your values) are being rewarded. Communicate the recognition and reward strategy throughout the organization so everyone is on the same page—and be sure you follow through with that strategy so employees can depend on it.
Rewards should be for special occasions and extra effort, but it should still happen often. You can build automated rewards into your rewards programs 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.
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.
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!
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 programs improve. It's as simple as that. As you reward positive behavior you’ll see more of it. You can also get peers involved in recognizing 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 organization.
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, 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 organization, 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.
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 programs you may want to start implementing these ideas as soon as you can. We get into how to set up programs in the next section.
Employee Reward Programs
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 programs 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 catalog.
What Are Employee Reward Programs?
Employee reward programs 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 simple question, but when you have thousands of employees it can be quite the task. Setting up rewards & recognition programs 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 Programs Work?
The most effective employee rewards programs cater to what your organization values most, and help drive that desired behavior. Here are some questions to consider while creating your rewards programs:
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 programs, too. Rewards aren't just about numbers and hitting quotas, they're about building a positive company culture and driving the behavior you'd like to encourage in your organization.
What specific behaviors do you want to encourage?
Outside of reinforcing company values, rewards can incentivize specific behaviors like hitting goals, completing surveys, going through trainings, and more. Make sure you communicate clearly to your employees that certain behaviors will help them get rewarded—and see participation skyrocket.
How will you measure behavior?
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 program. Some metrics you might consider include participation, amount rewarded, amount redeemed (if you use a points system), or even overall organizational 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 catalog 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 recognize group effort or individual accomplishments? Accomplishments of specific goals or participation in certain programs? 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 programs 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 program?
Make sure all team members know what the rewards programs 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 programs. 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 programs 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 check (at least not anyone we know), but they will take photos of their vacation, 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 organizations have some kind of recognition program, 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 organization.
Here's how to introduce greater frequency and inclusion with your rewards and recognition programs:
Set up a “recognize often” program.
Get everyone involved! Encourage peer-to-peer recognition, manager to peer recognition, or even incentive programs 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
- Company Birthday
- Employee Appreciation Day (it's the first Friday in March)
If you add the above holidays to your programs 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 program 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 programs.
Awardco’s Earn programs allow you to set up goals or tasks you want to incentivize. 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 programs, 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 catalogs for specific themes. We're here to empower you to give more back to your employees. Simple as that.
Employee Rewards and Recognition Catalogs
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 candy 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 organization, 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.
Employee rewards are best served within cohesive, strategic programs that answer key questions for your organization. When done correctly, employee reward programs are far more powerful than cash or gift cards alone. The last box to check when creating your employee reward program is to add a little creativity, and we'll cover that next!
Employee Reward Ideas
A great 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:
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 are programs 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 incentivized with rewards.
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 organization, than rewarding them for a life event.
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 program, 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 behavior 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 recognize 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.
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.
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.
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.
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.
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 organization.
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.
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.
This guide is just the beginning. There are so many ways to recognize 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 programs 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 programs and broaden the ones you already have.