April 12, 2024
March 18, 2024

Do Rewards Motivate Employees?

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It’s no secret rewards have an impact on performance. Rewards have driven achievement throughout written history. Even the Olympics are rewards driven. No really! Achievement is a big part of the reward, certainly, but winners also get a pretty nice paycheck from their country too. As of this writing, American Olympians who win a gold medal get just over $37,000 for their win. Mercenaries in the middle ages were driven by performance metrics too. Some mercenaries were even rewarded more for the number of foes they eliminated. 

The workplace isn’t the middle ages, though (maybe yours is, and if that’s the case, rewarding employees is probably the least of your worries). We don’t reward the fastest runners in the office and we certainly don’t pay employees for each bounty target they eliminate. We generally operate on higher principles of humanity and focus on job satisfaction, employee commitment and the positive effect rewards can have on employee performance, motivation and satisfaction as a whole.

Let’s learn more about how offering a reward and recognition program can help motivate employees, which, in turn, translates into better performance.

How Do Rewards and Recognition Motivate Employees?

How much control do you really have over employee motivation? Isn’t motivation something that has to come from within each person themselves? Yes, that’s accurate for the most part, but you, as an HR manager, can play an integral part in providing healthy motivation in the workplace. Below are some strategies you can try to help motivate your employees to do their best each day:

  • Purpose-driven work. How clear are your company goals and objectives? Does each employee understand how their work contributes to furthering those goals? When individual work and organisational purpose are aligned, employees are 49% more engaged, which means they’re more motivated.
  • Manageable expectations. Do your employees know exactly what’s expected of them every day? Or are they lost in a fog of half-hearted goals and purposeless projects? With clearly defined expectations, employees will feel less confused and more empowered to get things done.
  • Meaningful recognition. This is a big one. Recognition not only lowers turnover, reduces frustration and improves work quality but 80% of employees also agree that it improves their engagement and happiness at work. And when an employee is engaged and happy, they’ll be motivated to excel.

Now that you know how to help motivate your teams, let’s just confirm what we already know: motivated employees perform better. Studies show that, typically, employees with a higher level of motivation have a higher level of performance. And while negative motivators exist (we were going to name a few, but, really, you don’t even need to know them), positive motivators—such as rewards—are more effective at producing better performance. 

How Can a Reward System Motivate Employees?

Let’s look at rewards and how they interact with our brains (we’re slipping in a secret science lesson!). Put simply, positive rewards initiate a “go” signal at the basic level of our brains which triggers a desire for action. On the other hand, negative consequences actually inhibit action, which is great for decreasing motivation.

So when it comes to the effects of rewards on employee performance, rewards can motivate them to perform at a higher level. But it doesn’t stop there; another study found that employees who received smaller daily rewards were more engaged and motivated in their work than those who received rewards only after long periods of time.

A small disclaimer: offering rewards is a great way to increase motivation and performance but you have to be careful. If rewards are difficult for some employees to reach, they may feel worse about themselves and their efforts. Some employees may even look for ways to dishonestly make their performance appear good enough for the reward. You also run the risk of employees who stop pushing themselves once they achieve the desired reward.

Don’t let your well-intentioned efforts to reward and motivate your employees turn into a negative influence on your workforce. Find the balance that works best for the people you work with—remember, your employees are people, not numbers, so ask them what helps them feel rewarded and motivated.

Do Monetary Rewards Motivate Employees?

When you think of rewards, you may instantly think of a bonus or a raise. And most employees probably share the same thoughts! In fact, 85% of surveyed workers said that they are motivated by monetary incentives. However, you shouldn’t assume that end-of-year bonuses and the occasional raise are the only rewards that you should offer. 

On-the-spot rewards are a great way to reward employees and increase performance more often than once a year and such rewards don’t necessarily have to be monetary. Offer smaller bonuses for a specific behaviour or result—bonuses like PTO, recognition in front of the company or something they themselves might value. Give small rewards (such as a gift card) for small events and larger rewards for larger accomplishments.

Monetary rewards are a fantastic idea! These types of rewards not only help boost performance but are also important for retaining the talent you need for your business to succeed. However, you shouldn’t rely on money alone to improve performance across the board. In fact, tangible rewards have certain benefits that cash can’t replicate.

Different Types of Employee Rewards and Recognition

If bonuses, raises and cash aren’t the only reward options out there (or if your business doesn’t have the budget for constant monetary rewards), what can you do? Here are some ideas:

  • Extra PTO
  • Hand-written note
  • An in-person thank you from the employee’s manager or an executive
  • Flowers or food delivered to employee’s house
  • Surprise lunch at work
  • A customised flyer or poster celebrating the person and/or their interests
  • Better equipment at work—with better tools comes better productivity!
  • Social media shoutouts
  • Time for personal projects or self-improvement courses
  • Recognition—we know all about this one!

As long as the reward is meaningful for the employee, timely to the behaviour you’re rewarding and specific, you can bet that the rewarded employee will perform at such a level to attain more rewards. 

Pro tip: You can use Awardco to reward employees in the most effective, streamlined way possible. Take advantage of manager-to-peer and peer-to-peer recognitions that reward everyone for hard work immediately. These recognitions can give employees points that they can spend on whatever they want (through our integration with Amazon Business), or they can just be a nice note. Get the best of both monetary and tangible rewards in one package!

Start Rewarding Your Employees!

No matter what industry your business is in or how many employees you have, rewards are a great way to increase motivation and performance. With the right reward system in place, you can reward employees for their hard work, dedication, sense of humour and everything else they bring to the office.

If you’re not sure how to set up the best reward programme for your company and your culture, never fear; we have an Employee Rewards Guide that can give you more information on the why and the how of rewards in the workplace.

As you incentivise the behaviours you want to see, reward existing employee excellence and recognise each step in the right direction, you’ll see a boost in engagement, motivation, job satisfaction and performance.

Jefferson Hansen
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An avid lover of fantasy books, a proud Hufflepuff, and a strong proponent of escapism, Jeff has a love of good storytelling. He relies on that for both his professional work and his writing hobby (don’t ask about the 10+ novel ideas collecting virtual dust on his computer).