Rewards are a motivation tool as old as time. Whether it’s to entice someone to perform a certain action or to encourage them to keep it up, rewards are often the answer.
There are two main categories of rewards: intrinsic and extrinsic. While intrinsic rewards are based on an individual’s own psyche, such as taking pride in one’s work being a reward that motivates them to keep it up, extrinsic rewards are those offered by a third party.
Extrinsic rewards, which could be either monetary or non-monetary, can be offered in the workplace to motivate employees. By rewarding your employees, you are showing them that you recognize and appreciate their efforts in the workplace. This can bring along a host of benefits, including increased productivity, lower employee turnover and even better customer satisfaction scores.(1)
Types of Reward Strategies
There are many reward strategies that employers can implement in the workplace to motivate employees. Different employees are motivated in different ways, and although there is no one-size-fits-all approach, it can be generally accepted that rewards as a whole are a strong motivator for employees.
Monetary incentives are a popular approach; this can include bonuses for great performance or profit-sharing opportunities.(2)
Another effective method is offering non-monetary rewards. For example, flexible work schedules, recognition programs and career-development opportunities.
5 Steps To Implementing a Successful Reward Strategy
To effectively reward employees, a reward strategy must be put in place. Here are five steps to formulating a winning reward strategy:
Clearly define goals and objectives for the reward strategy.
- How often would you like to motivate employees: randomly, on a project-by-project basis, or at regular intervals—i.e., every quarter?
- What activities would you like to reward your employees for? Whether it be for exceeding targets or for being a fantastic team player, define your criteria for what you will reward for and make your employees aware of what they have to look forward to.
Understand what motivates your employees and tailor rewards accordingly.
- Different employees are motivated in different ways. While some are driven by bonuses, others are motivated by an extra day off or some company merchandise. Make sure you cover all bases through a selection of monetary and non-monetary rewards.
Offer a variety of rewards, and let your employees choose.
- Again, different employees are motivated by different rewards. Step up your reward strategy by giving your employees options to choose from. By allowing employees to choose their rewards, through means such as a reward shop (3), you can guarantee that they will receive the rewards that they are motivated by.
Communicate the reward program effectively to ensure employee participation.
- An effective communication strategy is crucial for an effective reward program. What use is one if employees are not aware of it? Remind employees of what’s in store to thank them for their efforts through emails, newsletters and the intranet.
Measure the effectiveness of the program and make adjustments as needed.
- This is essential for ensuring that your reward strategy is optimized for maximum effectiveness. How are your employees finding the reward strategy? Is it working as intended? Check in on your employees by asking for their feedback and ideas on how to improve your reward strategy—after all, they are the target audience.
Rewards are a fantastic way to motivate employees and increase engagement and retention. There are multiple ways to reward employees and show that you appreciate their hard work. With an effective reward strategy in place, you can ensure that employees are rewarded and motivated in the best way possible.
To learn more about rewards and how to use them to maximize your employee referral program, download our guide today.