Rewards and Recognition Approaches that Work
Going Beyond the Traditional Employee Rewards and Recognition Programs
Rewards and Recognition are a part of almost any traditional corporate incentive program. Employee of the month, managers handing out gift cards, and the year-end bonus are all part of a traditional employee experience.
But the question is – do these traditional approaches help drive your business forward? Most of the time, they don’t. These types of programs don’t resonate with employees, they’re not tied to day-to-day performance, and their impact isn’t trackable.
That doesn’t mean that rewards and recognition aren’t valuable. Quite the opposite – used strategically, rewards and recognition can help your employees engage more with their work. How? Tie rewards and recognition to the things that really influence your employee experience: connection, meaningful work, having an impact on the company, and feeling appreciated.
Using Rewards and Recognition Programs To Boost Intrinsic Motivation
To set up an effective rewards program, it helps to understand motivation.
There’s intrinsic motivation – which happens when you just want to do something for its own sake or because it’s meaningful, for example: searching for a fix to a software bug because you like it, learning a new skill because it will help you build your career, helping out a coworker because it will make your team more successful.
And there’s extrinsic motivation – working for the rewards, trophies or perks that someone else gives you. For example, your employees pull in extra hours only because they want their year-end bonus.
Intrinsic Motivation Boosts Employee Engagement
Intrinsic motivation works to boost engagement. Everyone wants to work on things that they enjoy or that are meaningful to them.
Yet, science shows that using extrinsic motivation to boost employee performance often backfires for three reasons:
- It can kill your job’s meaning.
- As soon as you take away the reward, employees stop working towards it.
- Over time, the same rewards get less attractive and you need to keep increasing them.
This doesn’t mean that rewards don’t work. Rewards and recognition systems work when they include these four strategies to boost internal motivation.
- Make it easy to give meaningful, positive recognition.
- Use recognition to encourage employees to challenge themselves.
- Help your teams work well together.
- Give employees choice in their rewards and recognition.
Recognition and Rewards Best Practices
Here are a few science-backed best practices for using recognition and rewards to boost employees’ internal motivation:
Tie the Reward to a Thank You
Appreciation goes a long way in the workplace. A sincere thank you for a job well done lets an employee know exactly what they’ve done that you value. A recent Glassdoor Survey showed that half of employees would stay longer at the company if they felt more appreciation from their boss. And 81% of employees said they’re more motivated to work harder when their boss shows them appreciation.
But the key – they didn’t just want the private words. They also wanted recognition and rewards to go with it. Other than a pay raise, some of the top ways they wanted to be thanked include: unexpected treats and rewards, career development opportunities, and company-wide recognition.
Peer-to-Peer Recognition and Rewards
In Prosocial Bonuses Increase Employee Satisfaction and Team Performance, researchers looked at what happens when employees get bonuses to use as charitable donations or gifts to coworkers. They found that rewards and recognition that pay it forward also pay a company back.
- On sports teams, every $10 people spent on themselves led to 2% fewer wins, while every $10 spent on others led to 11% more wins.
- On sales teams, every $10 that an employee spent on themselves led to only $3 back to the company – a net loss. When a team member spent $10 on others, the companies brought in $52.
So, boost your reward program’s power by letting employees reward their peers, do charitable contributions, or include volunteer work as part of the experience.
If you ask your employees directly how they want to get rewards and recognition, they’ll say that they want cash. But their behavior might say otherwise.
A study of Israeli semiconductor workers showed that the promise of pizza or a thank you led to better productivity than a cash bonus or no bonus at all. But when workers got to choose their bonus, cash worked better.
But in your office, maybe you have people that don’t like pizza. Or would rather have an office party than direct cash.
Employees like to have more choice and control over their environment, so why not give them choice and control over their rewards and recognition? Offering a mix of rewards not only empowers employees, but also keeps any reward from getting stale.
Include Team Rewards
When two software companies got rid of individual commissions for salespeople, they found an interesting result: the whole team worked better towards a common sales goal. And their sales went up.
It’s not that you need to get rid of individual rewards entirely, but including team rewards and team experiences can make everyone more engaged and effective. And the science backs it up. This study in the Journal of Business Research showed that rewarding a team boosted cooperation and performance.
Connection to the team is a big factor in how much employees engage with their jobs. Rewarding the team, or including team experiences as a reward option, can make your reward system more effective for the individual.
Tying It All Together
Use this checklist of 10 elements to create a reward and recognition system that works.
- Tie it all to a thank you. Appreciation is the single most effective employee motivator.
- Make it easy. Use a simple to use, public platform that employees can easily use to recognize each other.
- Make recognition frequent and specific. Regular recognition helps employees know what they need to do to be successful.
- Recognize everyday greatness. Heroic actions aren’t enough to move a company forward – it’s everyday performance that matters. Recognizing the small wins matters.
- Variety. Employees want choice. Letting them choose the rewards that matter to them makes the reward more meaningful. See 40 Out of the Box rewards for more ideas.
- Charitable donations. Studies show people want to give back. Let them direct their rewards to a cause.
- Experiences. In today’s world, a lot of people are offloading stuff. High-value experiences might give more bang for your buck.
- Peer-to-Peer Rewards and Recognition. Studies show most employees get more out of spending $20 on a coworker than on themselves. Make it easy for them to reward each other.
- Group Activities. You want your employees to work together. Let them reap the benefits together.
- Mix it up. Keep rewards from getting stale. Rotate them every quarter or month.