Most companies have employee rewards programs. They may be formal – like an annual or quarterly bonus tied to meeting performance objectives. Or they may be informal – like a stack of gift cards in a manager’s drawer.
The problem is that these traditional, monetary-based employee rewards don’t actually motivate employees. The London School of Economics reviewed 51 different studies and found that financial incentives not only fail to encourage employees to perform – they can even demotivate employees.
On top of that, poorly planned employee rewards can ruin your company culture. “Over-reliance on pay and promotion as motivators leads to an organizational culture that is very transactional and disengaged,” says Susan David, co-director of the Harvard/McLean Institute of Coaching.
Does that mean employee rewards aren’t worth doing? Not at all.
5 Tips for Meaningful Employee Rewards
- Recognition is a reward itselfEmployees like to get recognized for their work. A thank you for a specific action often makes employees motivated to do more of that specific action. Making it public amplifies its effect. Making regular recognition part of your employee rewards program is critical for its success.
- Tie rewards to recognitionRewards can amplify the impact of recognition. Tying rewards to spontaneous recognition means that it’s always unexpected. And that unexpected reward has far more impact than one that an employee has come to believe that they “deserve.”
- Let employees choose their own rewardSimply put, employee rewards that aren’t meaningful aren’t motivating. For example, you might inadvertently give a coupon to a fancy fish restaurant to someone allergic to seafood. Or movie tickets to a new parent who struggles to find a babysitter.
Instead, offer a catalog of reward ideas as part of your employee rewards program. This way, employees can choose rewards that are meaningful and matter to them.
- Offer non-cash experiences in the mixInstead of relying on the annual bonus or a gift card, offer employees the opportunity to have an experience as a reward. Perhaps a happy hour for their team, or the chance to get extra time off. These experiences often resonate more with employees than a gift card or more stuff.
- Let employees reward each otherStudies have shown that when employees can reward each other – the whole team’s performance goes up. Plus, it takes the burden of an employee reward program off management and puts it in the hands of employees.
For more ideas on setting up motivating employee rewards, get our guide on Rewards and Recognition Systems that Work.
Kazoo amplifies company culture through its award-winning employee experience platform that delivers engagement, retention, performance management, and improved business metrics. As a dominant force in the HCM market with an industry-leading retention rate, Kazoo partners with more than 400 global organizations to build high-performance cultures and engaged workforces. Founded in 2013, Kazoo continues to revolutionize the employee experience with its platform based on the science of motivation, rewards, and recognition. To request a demo, visit info.kazoohr.com/demo-request