What’s the difference between employee rewards and recognition?First up, it’s important to differentiate between employee rewards and employee recognition. The two terms are used interchangeably by some, but in reality, they are quite different. Rewards can be considered a form of recognition, but recognition is not really a reward in and of itself. Rewards programs are based on the idea of giving a monetary or physical bonus for good performance. They can become quite costly for your company if you’re not careful, but they can boost employee performance when used well. On the other hand, recognition programs are designed to make employees feel appreciated and good about their work. They are much more cost-effective than rewards programs and could be a good option for smaller businesses with a tight budget. Or, the two types of programs can be used in tandem.
What are the benefits of employee rewards programs?Developing a new employee rewards program can have numerous benefits for your business. Some of the main reasons you should consider an employee rewards program include the following.
- Showing appreciation for good work.
- Increasing motivation and boosting productivity by making employees want to be at work.
- Building a positive workplace by encouraging friendly competition between employees striving to meet rewards targets.
- Boosting employee retention by making your employees want to keep working for you.
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How to Design an Employee Rewards ProgramWhen you’re designing a new employee rewards program, it’s important to keep things like your budget, your company vision, and what rewards targets you want to set at the front of your mind. The following steps will help you design a great rewards program for your organization. Step 1: Understand why you want a program. Before you implement an employee rewards program, you need to understand why you need one and what company goals it’s going to be advancing. This will help you focus your program and provide the most benefits. Step 2: Create a budget. It’s important to understand how much you can afford to spend on your rewards program. You can always revisit the budget in the future. Step 3: Identify reward criteria. Before you launch your employee rewards program, you should create clear criteria that identify how and when employees should be rewarded. This will help keep the program fair and competitive. Step 4: Decide on your rewards. There are a few different types of rewards you could go for, including monetary bonuses or physical items. It could be a good idea to send out a survey to see what rewards your employees would like to receive. Step 5: Implement your program. Once you’ve fine-tuned your employee rewards program, it’s time to roll it out. Ensure your employees understand it and how it works. It’s often worth making a rewards handbook or document that clearly outlines your program.
What Kind of Employee Rewards Are There?Employee rewards can generally be split into two categories: monetary and non-monetary. These can be further split into more specific subcategories.
Monetary RewardsMonetary rewards can come in the form of direct compensation or indirect compensation. Direct compensation involves a direct monetary reward and may include things like lump-sum bonuses, overtime rewards, or pay increases. Indirect compensation, on the other hand, is when you pay for something for your employee, such as their health insurance or parking fees.
Non-Monetary RewardsNon-monetary rewards can be further split into intrinsic and extrinsic rewards. Intrinsic rewards are those that employees are motivated to go for because they have a sentimental or psychological value, such as a plaque or certificate. These can help employees feel appreciated and recognized. Extrinsic rewards typically motivate employees to compete because the reward is something that’s valuable, useful, or fun. This could be technology or gift cards, but don’t rule out more unique ideas like fun experiences or tickets to shows. If you’re having trouble deciding what sort of rewards to give, ask your employees! They will appreciate the effort, and you will be able to rest assured that you’ve made a good choice.
Structured vs spontaneous rewardsEmployee rewards can be further defined as structured or spontaneous. Structured rewards involve periodic bonuses that employees expect and know they are going to get. These can become a little ineffective, as they are often seen as boring. They can also cause problems if some employees don’t reach their targets but feel they should be rewarded regardless. Spontaneous rewards aren’t expected by the employee, making them more enjoyable to receive. They are easier to personalize, and they can be used to reward things like high performance, the end of a difficult job, or signing a big contract.
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Ten ideas for creative employee rewardsThere are countless ways that you can reward employees, especially if you’re willing to spend a little money and get creative. Here, we’ve outlined 10 unique ideas for rewarding your employees.
An extra day off
Free dinner vouchers
A special parking spot
Sporting event tickets
Festival or concert tickets
Wine tasting or brewery tours
A food hamper
A “dress-down” day
Work from home days
ConclusionEmployee rewards are a useful tool for boosting workplace morale and performance. By creating a solid rewards program, you can show appreciation for good performance and high-quality work. There are many different types of employee rewards and rewards programs. Now that you know the benefits, if you don’t already have employee rewards in some way, it could be time to develop a program.
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