18% of employees are actively disengaged at work, according to a recent Gallup report. But what’s even worse than this is that a whopping 67% are not completely engaged, and this practically means that the majority of the global workforce is slacking off. The same report estimates that the cost of this kind of detrimental workplace behavior is $7 trillion globally.
All these stats perfectly illustrate how important it is for companies to reward their employees in order to motivate them, but it’s easier said than done. Designing a reward system which will leverage the power of positive reinforcement can be challenging, mainly because managers don’t approach this task on an individual level, thus failing to figure out what makes their employees tick.
What is an Effective Reward System?
The first thing to do when creating a reward system is establishing your goals, such as boosting sales, improving customer experience, or enhancing customer relationships. After that, it’s crucial to align these goals with employee performance and behaviors. Performance is easily identified, which means that assessing, for example, who your top salesperson is, won’t be a problem. However, deciding what kind of employee behaviors you want to reward is a bit trickier. The best way to solve this is by asking yourself what behaviors you want to reward based on how they affect employee performance and attaining company goals. For example, is it better to stimulate your employees to come to work as early as possible or stay after-hours, or to reward them if they find a way to work less and achieve more?
Ask Your Employees What They Want
If you aren’t sure how your employees want to be rewarded, there’s no need to guess and throw darts (and your money) in the dark. Instead of that, simply ask them and they’ll tell you. Surveys are an excellent tool for this, but they need to be carefully structured in order to be effective. In other words, don’t leave much room for free responses, and use multiple-choice questions in order to guide their feedback as this will allow you to categorize their responses. Achieving fairness and transparency is also of crucial importance. Perceived favoritism can lead to internal conflicts, frustration, and reduced productivity, all of which can lead to a high turnover rate. In order to avoid these issues, make sure to:
- Clearly define the benchmarks so that every employee knows what kinds of achievements are rewarded;
- Provide a reward right after an exceptional achievement, and never let your employees wait for too long;
- Encourage equal opportunities so that all your employees have the same starting point when it comes to proving their abilities.
Types of Reward Programs
While most people think of a big fat check as the best way to show appreciation for a hard-working employee, research studies have shown that a higher salary doesn’t automatically mean better performance and results. Cold hard facts say that 78% of employees wouldn’t be more motivated to work harder even for a bonus equivalent to 10% of their annual salary. Despite this, it can’t be denied that cash can be a powerful motivator, but as it’s clear that a one-size-fits-all approach to incentivizing your employees doesn’t work, here are a couple of ideas for different types of reward programs which don’t include financial compensation.
- Flextime and telecommuting have become regular perks in some companies, so if you haven’t introduced these two options, maybe it’s time to break the ice by using them as rewards. Since working from home or coming and leaving the office at different times can be disruptive, it’s a good idea to start by offering your best-performing employees to work from home one half-day during the week. Once your employees adapt to this change, expand this period to a whole day, and finally to telecommuting. We’ve asked the guys over at Cube Digital how their remote system has been panning out so far, and all of them have wholeheartedly agreed that they have become much more productive since working from home.
- Hosting team building activities will both help you bring your team together and serve as a great reward. Sometimes it’s a good idea to incentivize your whole team for their joint effort rather than an individual employee, because it will give them a reason to work side by side. Of course, these activities need to be fun and engaging in order to be effective. For example, you can organize a work-outside-the-office day at a nearby gym or spa center with Wi-Fi access and spend some time relaxing and hosting creative brainstorming sessions. Similarly, your team can also benefit from a hiking trip, mini golf, or any excursion during which you’ll visit local attractions. Before you make any reservations, ask your employees which of these activities they prefer and find the one that all of them find interesting. Team rewards should be tied to performance, meaning that your employees should be incentivized if they complete a project ahead of time or when they overcome a particularly challenging obstacle.
- A gym membership, Netflix subscription, concert tickets, or a season pass for their favorite sports team will most certainly encourage your employees to put in a great deal of effort into their everyday work. As you can see, such rewards provide you with a wide range of choices, so that you can personalize each reward based on your employees’ individual preferences.
- A hand-written thank you note paired with a standing ovation maybe seems like something corny or even silly, but sometimes nonmaterial rewards have a more profound psychological impact. It’s hard not to be touched and proud of yourself when all your co-workers are applauding and patting you on the back.
- Free food, especially healthy snacks, are any employee’s all-time favorite reward. This way you also show that you care about their health and well-being.
- Company swag, such as branded T-shirts, baseball caps, or mugs with your company’s logo make for excellent rewards. Personalize these items additionally by adding your employees’ names. Such gestures are also great for building loyalty and a sense of belonging.
An effective rewarding system will help you attract new talent, keep your existing employees, and reduce turnover rate, all of which will positively impact your company’s bottom line.