Employee rewards programs can have an outsized impact on employee engagement. However, it’s not always clear when to have one in place, what to look for when shortlisting vendors, and how to make the most of them. Luckily, growing your employee rewards program is surprisingly straightforward with a little guidance.
What are Employee Rewards?
Employee rewards are perks and bonuses that recognize and motivate outstanding performance or when specific goals are achieved. These programs show appreciation for employees who consistently go above and beyond or meet certain performance targets.
Employee Reward Types and Examples
There are 2 main types of employee rewards:
- Monetary rewards are easy to quantify and allocate but can come with tax implications. These can include a sale commission, a bonus, or a salary raise.
- Non-monetary rewards come in the form of a specific item or experience used by employers to recognize and appreciate employees. An employee award title, company-sponsored training, and a free lunch are a few examples of this type of reward.
Employee Reward Key Features
Employee rewards solutions come with plenty of bells and whistles, but it’s up to you to hone in on the most useful features for your organization. If you’re not sure where to start, here are a few suggestions:
1. Integrations
Integrations are important because your team already uses plenty of tools. You'll especially want to find a solution that integrates with the chat tools and HRIS systems your team already relies on daily.
Other integrations to consider for employee rewards tools include SSO (single sign-on), rewards vendors, company swag, and general API capabilities.
2. Milestone Celebrations
The best rewards platforms automate the celebration of birthdays and work anniversaries, which are some of the most significant milestones in an employee’s workplace experience and tenure.
Research has proven that work anniversaries and birthdays are natural catalysts for employees to reevaluate their roles and, if they feel unrecognized or unfulfilled, move on. In fact, employees who feel unappreciated are twice as likely to quit within the next year and thus have higher levels of absenteeism.
Making employees feel appreciated during these key moments is a no-brainer, an extra touch that can also encourage the rest of the team to pile on the praise.
3. Mobile Usability
Most solutions are accessible via a desktop browser, but not every worker has a laptop. A mobile app allows employees to give and receive recognition at home, in transit, and at events. Some tools even offer kiosk modes for workplaces that don’t allow personal devices.
4. Analytics Dashboards
People analytics informs modern HR teams. Recognition data can be interesting, but using that data to learn more about team engagement, performance, and communication takes it to a whole other level. Look for recognition and rewards solutions that can give your team actionable information to improve the employee experience.
5. Language Support
Depending on where your team operates, this can be a big one. Think about what languages your team uses, and also consider what language any admins should use when communicating with the vendor.
6. Custom Rewards
Modern rewards catalogs are impressive, but every team has its own special flair. Whether it’s a virtual gift, custom dessert, forcing the CEO to give a meeting as a puppet, or tickets to your hometown minor league team, offering custom rewards can really make a rewards program stand out and bolster culture.
7. Security Compliance
Cybersecurity becomes more important each year, and you should ask vendors of recognition and rewards solutions you speak to about security compliance.
Your employee data and company project information should be placed in responsible hands. When evaluating tools, inquire about certifications like SOC 2 and ISO 27001 to understand how these tools protect your sensitive data.
How Employee Rewards Evolve at Organizations
The first stages of recognition and rewards usually start when the team is small. Some people give shout-outs and make an effort to appreciate employees on set occasions. One person usually runs out to buy gift cards, notes, or even treats.
Depending on how archaic an organization is, there might even be some form of informal employee recognition and rewards, such as candy, flowers, or company swag. Unless you’ve got some superheroes on the team, this approach isn’t feasible or scalable.
As organizations grow, most realize that their home-grown perks and bonuses are struggling with inconsistency, becoming a time-consuming burden to those who manage them. Almost all of these initiatives end up fizzling out as their sustainability falters, and the responsibility falls on HR and PeopleOps teams to come up with something better—a successful employee rewards program.
Signs You Need an Employee Rewards Program
When teams get to a certain point, it’s time to upgrade to one of the best employee rewards platforms. That point is different for every organization, but here are a few tell-tale signs that an upgrade is warranted:
Managing Rewards is Distracting
When a team hasn’t been able to incorporate a form of employee reward system into their day-to-day, it falls on one person’s (or a team’s) plate. Keeping up this kind of program company-wide takes time away from the employees’ work and other priorities, and organic recognition starts to wane.
You're Adopting an HRIS
Your company is getting bigger, and you’re graduating from an HRIS – congrats! With an HRIS, you’ll have key employee data in one spot, and you’re on the way to automating parts of your job. Employee recognition and rewards tools are made to plug and play via full integration capability with HRISs.
Make use of this functionality as soon as possible to ensure you can incorporate an effective employee recognition program that is native to the platforms your employees work with daily. This is a sustainable and scalable way to recognize top performers for great work no matter how large the number of employees using your HRIS becomes.
You Need More Visibility Across the Organization
Silos stink. You want collaboration and positive interdepartmental relationships as your company grows, but it’s hard to establish this company culture organically. A culture of appreciation at work breaks down silos. Moving to a recognition and reward tool can inspire ideas across an organization and foster company-wide collaboration.
Your Team Says So
You’re already monitoring engagement, right? When your team indicates that recognition is low, your employee retention is under threat. It’s your chance to fix things before they leave. Satisfaction with the level of public recognition and private recognition and the types of rewards you offer are great questions to bring up in engagement surveys, stay interviews, and manager 1:1s.
Other potential markers for faltering recognition and rewards include low employee engagement, high turnover amongst top talent, and limited employee feedback.
How Rewards Tools Benefit Teams
The best reward tools are self-sustaining. In other words, they don’t require a lot of ongoing maintenance from the team to stay effective. This allows the team to spend time on other initiatives and do what they do best, focus on people.
Effective reward tools can significantly impact the bandwidth of teams by saving time and removing the mental load from HR workers. A recognition platform remembers milestones, prompts peer-to-peer recognition, creates positive feedback loops, and automates rewards. All this bakes recognition into the organization’s core values.
What to Look for When Buying Employee Rewards Tools
As your team evaluates tools, consider the following key aspects and features:
1. Does The Tool Fit Your Organizational Culture?
As a people leader, you should understand your team and what they’re ready for. Choose a recognition solution that fits your team's culture and values. Leverage tools that best reinforce what drives your team and how they work.
For example, if transparency is a top value, look for solutions that promote recognition visibility across the organization. Some solutions might seem more light-hearted with a focus on UX while others could be a little more rigid but offer the features your team needs.
2. Do Your Employees Respond Well to a Demo or Free Trial
Your team's feedback is critical in choosing the right recognition and rewards solution.
Before you choose a tool, ask employees how they want to be recognized and what kinds of rewards would be most meaningful. Then, look for a solution that offers the right mix and test it out. Most vendors would be happy to walk teams through functionality in a demo or sign you up for a trial. If your employees enjoy using the recognition tool, it’s a good start.
Rewards should also be personal and in line with what your team wants. When it comes to creative employee reward catalogs, options can include gift cards, company swag, fun experiences, or even custom gifts from their peers.
3. Does the Platform Make Peer Recognition Easy?
Peer recognition is more effective than solely top-down recognition. In fact, HR pros are more likely to rate their recognition programs as effective when peers can recognize each other instead of only managers recognizing employees.
Look for a solution that makes it easy for every team member to give and redeem rewards points. Equally important is making sure that the rewards embody your company culture and core values.
4. Does The Tool Fulfill Your Implementation, Integration, and Reporting Needs?
Before you commit to any solution and implement it organization-wide, be sure to try it with your colleagues first. Some tools might look good on paper, but taking a couple of weeks to test run it with a small group will give you a far better idea of what tool is right for your team.
During this initial test, be sure to note how the setup process went and what kind of actionable people analytics you can extract from its reporting dashboard.
Best Employee Rewards Platforms
Best for SMBs
- Nectar: A gamified rewards platform, ideal for growing businesses
- Workstars: An affordable option for US and UK-based companies
- Connecteam: Rewards, time off, and training in one app, free plan available
Best for Enterprises
- Motivosity: Best for social recognition and community building
- Bucketlist: Rewards platform with one of the most extensive catalogs
- Cooleaf: A well-rounded employee experience platform for remote teams
- Mo: Great for cultivating positive habits among team members
- Guusto: Excellent tool to recognize frontline workers
- Vantage Circle: Suitable for multi-national teams
Also Great
- Matter: Rewards program works within Slack and MS Teams
- Kudos: Rewards platform tailored for enterprises with 500+ employees
- Bonusly: Suitable for teams seeking a clear and easy rewards process
- Reward Gateway: Mobile-optimized platform with numerous rewards options
- Assembly: Rewards and recognition designed with SMBs in mind
- Awardco: Top choice for personalized gifts like memory books and keepsakes
- WorkTango: Rewards and performance management in one platform
- Terryberry: Great for creating and giving branded merch
How to Implement a Rewards Program
Before you officially launch any new rewards program, you’ll want to put in the prep work.
Make the Case for a Program
Investing in any tool or program requires a business case, and a rewards tool is no different. Besides getting executive approval, you’ll need buy-in from your workforce. Guide your team in understanding the importance and impact a recognition software will have.
Share how it supports the company mission, and remember to prove the ROI of the employee rewards and recognition program. Some key concerns to raise are the cost of disengagement and turnover. Note that disengaged employees generally cost the organization 12% of their salary. Consider estimating team savings when it comes to turnover since companies with strong recognition see 31% lower turnover rates.
If leadership isn’t on board with investing in recognition and reward, you’ll just be spinning your wheels. Work on getting support from the top, and bolster your proposal with business metrics and well-thought-out ROI projections.
Create a Coalition of Champions from Different Teams
Don't try to go it alone. It might take a bit longer, but bringing others on board will make it much easier to implement and get buy-in from the rest of the company. You'll also want to make sure you have folks from different teams to help manage, give input, and champion the program.
Train Your Team on Effective Recognition
It might feel strange at first, but if you want appreciation to be part of your culture, train your team on how to express it at work and suggest a framework.
For example, you can leverage CCL’s SBI framework for recognition: Start by describing the commendable behavior, and then tie that behavior to the positive impact it made. Bonus points for bringing it back to your company values.
Make Recognition Training Part of Onboarding
The recognition program you instill is an important part of your organizational culture and should be appropriately prioritized in orientation. Ensure you have a plan for onboarding new employees so they understand the company’s approach to recognition and rewards from the start.
Model Recognition and Rewards by Leadership
It's easy to deploy a new tool, but getting employees to use it is a different story.
Leaders need to set the tone for the entire organization by modeling the kind of behavior they want to see. This starts from the top. Ensure executive leadership is generous and authentic with recognition from the beginning. Guide them in crafting initial recognition to ensure it’s effective and inclusive.
Make the Most of Your Launch
You only launch once. Before you kick off any new reward program, you’ll want to plan your launch strategy, including a realistic timeline and key milestones to check in along the way. It’s also important to decide who will be responsible for any associated projects.
According to Nadjia Yousif, any tech you introduce into your organization should be treated the same way you would treat a new hire. Build hype around the program’s launch day. That could mean having an introductory party, blocking off time for everyone to give their first recognition, and even walking the team through rewards redemption!
This might seem like a no-brainer, but it's important to ensure everyone is on the same page about the program and how it works. This means creating clear and consistent communications about the program, its entails, and how employees can get involved.
Evaluate Your Program’s Effectiveness Regularly
Recognition and rewards programs can have a big impact on your organization, but only if they’re done right. By following the steps above, you’ll be well on your way to effective recognition and rewards. But it doesn’t end there!
Continue to evaluate the program after launch. Collect feedback from teams to understand the best way to evolve your team’s recognition and rewards program.
Employee Rewards Empower Successful Teams
Appreciation is a fundamental need in the workplace that many teams struggle with, but it doesn’t have to be an uphill battle.
Successful modern organizations leverage recognition and reward tools to foster a healthy recognition and reward culture as they grow. These tools aren't cure-alls for toxic cultures or poor business practices, but they can certainly enhance the employee experience and produce an outsized return.
