Motivation Beyond Money Through Effective Employee Rewards and Recognition
Let’s face it—recruiting new workers isn’t the only problem companies face in a post-lockdown environment. While past generations were content to spend their careers with one company, a new generation of quickly rising employees of the Millennial and Gen Z generations are increasingly motivated to prioritize challenges over comfort, moving onto the next big thing instead of staying in a dependable role. For these driven workers, a robust internal system of rewards and recognition that is both relevant and meaningful can make all the difference in encouraging them to stick around. So what rewards frameworks are the most effective, and how can you make these systems of positive reinforcement work for you? Let’s take a closer look.
How To Create An Effective System of Rewards
Rewards are clearly important, but what form should they take?
Deciding which systemic reward management model to adapt is a decision that needs to be grounded in your company’s unique culture, as well as the needs of your employees. So how should you start? Consider utilizing these common frameworks as you begin the process of creating a successful internal rewards management system.
Monetary Reward Systems
Known to psychologists as an extrinsic reward system, monetary rewards usually come in the form of annual or semi annual bonuses, and are one of the most commonly used reward management systems. Other examples might include incentives such as cash awards, profit sharing schemes or stock options designed to encourage employee productivity and loyalty.
Providing specific, concrete monetary rewards on a dependable schedule is an excellent way to encourage employees to work hard to achieve big picture goals for performance and productivity, and may encourage a sense of friendly competition some enjoy. However, the Small Business Chronicle notes that they are progressively less impactful—as the reward becomes expected, it becomes less important to achieve it.
Non-Monetary Extrinsic Reward Systems
Like a monetary reward, non monetary reward systems are extrinsic, meaning that they’re grounded in external forces of reward and incentive rather than internal responses to psychological interaction. This could be something like a certificate of recognition, perks such as extra time off, flexible scheduling or on-site extras like gyms, food and even parking.
These rewards can be effective, but they have the shared vulnerability of being highly dependent on circumstance. While flexible scheduling and work-from-home policies might draw in new hires, they’ll become less appealing if these policies become an industry standard. Similarly, amenities that once seemed exciting, like gyms, lectures, catering and happy hours, are quickly becoming the new normal of a certain class of worker who will need a little extra incentive to inspire them to stick around. The University of Chicago conducted a study on the psychology of people in relation to tangible non-monetary incentives and the benefits they carry. The study found that when people calculate the value of a real reward, like a monetary incentive, they care a great deal about the amount of that reward. But when people rely on feelings of value to assess the worth of a non-monetary reward, the importance of the reward amount diminishes. These types of rewards boost employee feelings and morale about their work and the company, incentivizing them to stay with the company.
Employee Assistance Programs
Falling somewhere in the zone between an extrinsic and an intrinsic reward system, employee assistance programs at their best should be designed to help support the physical and psychological health of employees, with the long term goal of encouraging work/life balance. This could take the form of onsite wellness programs or putting structures in place to support your employees when they need an extra hand.
Employee assistance programs provide a lot of mutual benefits for both employees and employers through providing support which can result in increased worker retention and increased productivity. Making sure workers know the company is there to assist them when they are overwhelmed with work stress or willing to lend a hand with flexible leave policies and robust health insurance is the key to building trust. Not only do these programs boost worker retention, they increase loyalty and performance by making sure employees are able to give their work motivated, focused attention in a secure environment.
Employee Recognition Programs
An extrinsic recognition system with an intrinsic impact, employee recognition doesn’t have to be as scheduled as a rewards ceremony or certificate given out each month. It can be something as simple as verbal praise, putting in the effort to communicate worker value publicly and on a consistent basis, creating a positive feedback loop for worker engagement.
Research shows that this type of consistent, dependable positivity helps employees feel that their contributions are recognized and appreciated. This, in turn, leads them to work harder to achieve external goals, as well as encouraging a more positive attitude from everyone in the workplace. Putting these systems in place and practice on a daily business helps encourage the creation of a more productive, positive work environment that employees are truly invested in. Building a positive work environment and giving praise to employees in private and in front of their peers creates a feeling of appreciation and value for the work employees do. Officevibe collected data on employee recognition and the results show a strong correlation between whether employees say their organization celebrates accomplishments and learnings, and feeling that their organization trusts them to contribute to its mission.
The Rewards of Success
Success should be its own reward, but having these frameworks in place can help incentivize employees to pursue specific, externally created metrics to judge their success.
Psychologists tell us that having a relevant, robust reward strategy in place has a host of benefits for employers and employees alike. Recognition in the form of reward helps support individual productivity and performance increases, but it also boosts morale, leading to a stronger company culture and producing noticeable positive psychological effects within the workplace. This, in turn, leads to greater efficiency and an uptick in productivity and sales, which serves as a mutually reinforcing positive feedback loop.
A highly visible example of this phenomenon can be found at Zappos. Zappos have four peer-to-peer programs that promote recognition of employees from their colleagues and customers. One of the programs allows employees to give a co-worker a $50 bonus while another allows employees to earn fake money to redeem a variety of rewards at the company’s internal store.
Creating a well established and mutually recognized system of relevant, directional feedback in the form of rewards helps workers understand themselves as members of a culture of positivity grounded in meaningful results, reinforcing positive individual attitudes. With a rewards system to guide them, workers are able to dig deep into their own desire to succeed while uplifting others in their professional community, discovering a deep motivational force and creating a stronger connection to your organization’s purpose.
Learn more about helping your organization create a more meaningful rewards and recognition program to drive employee trust and loyalty. BrandCulture’s Culture Framework can help employees and their organizations reach their highest potential.