Creating a Rewards Stratergy : Why should companies have one

Unappreciated employees cost your organization a lot of money. But that’s the least of your worries if you are running an organization. It will result in underproductive employees who will not give their best, resulting in terrible output, high attrition, and so on. It is in the best interests of the organization to keep its employees happy and fulfilled. 

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Absenteeism, negative attitude, low morale, lack of initiative, reduced communication, and lack of enthusiasm, are some of the problems because of an unengaged workforce. Deloitte’s Talent Survey results say that employee engagement, productivity, and performance are 14% higher in organizations with recognition programs. 

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What Happens When Employees Don’t Feel Valued?

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Unfortunately, there are several ways organizations can make employees feel unheard, undervalued, and disrespected. Most of these feelings are stoked by inept managers who don’t know any better, but an organization has to keep its employees happy. 

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When your employees don’t feel valued, the following happens:

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1. Higher Attrition Rates: Why would someone who doesn’t feel valued continue staying with your organization? They will leave at the first opportunity. High turnover rates are costly for the organization as you need to again spend on recruitment and training. The lack of productivity during this period is another issue. Organizations with frequent recognition are 41% more likely to see increased employee retention. 
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2. Poor Job Satisfaction: Employees who don’t feel appreciated and valued are less likely to feel satisfied with their jobs. They will feel that their contributions don’t matter.
    
3. Increased Stress: Your employees will feel stressed out when none of their hard work is being acknowledged. It will affect their physical and mental well-being, making your workplace a bad place to be.
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4. Low Morale: Being unappreciated will have a huge impact on the morale of everyone at the office. It can also affect the camaraderie between each other and feelings of negativity towards the colleagues will grow.
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5. Low Quality of Work: For superior output, your employees also need to be put in an environment that encourages them to go above and beyond. Employees who feel unheard are more likely to put in average work. They are more inclined to rush through work and cut corners. All of this will impact how the final output is presented. 

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How Do Good Employee Rewards Help?

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There are innumerable benefits to both employees and organizations that consistently reward and recognize their employees. Let’s look at a few of them.

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1. High Retention Rate: Having a well-designed rewards program retains top talent since they know they will be treated right. Why would employees leave when they know their efforts will never go unnoticed? This reduces attrition rates. 
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2. You Attract Top Talent: Having a competitive rewards program in place can make you look like an attractive employer, especially in a sea of companies. In a competitive market where employees are fighting to get the smartest minds onboard, having a rewards program in place has a huge impact.
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3. Creates a Positive Environment: When the company promotes values such as hard work by consistently appreciating them, it will result in a positive company culture. Everyone who feels valued will treat others with respect. It will also result in a more inclusive working environment.
    
4. Supports Professional Development: By offering rewards such as learning opportunities, career growth incentives, and courses, you are investing in their future. This also improves their prospects within the organization.
    
5. Encourages Healthy Competition: By rewarding employees for meeting and exceeding their goals, recognition programs can inspire healthy competition among employees. 

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How to Create a Successful Rewards Program?

Know Your Why:

Before investing in an employee recognition program, the first step is to be clear about why you are doing it. There will be obstacles on the way because it isn’t easy to create a friction-free program. For you to tide over these issues, you must have a clear “Why.” 

Write down why you want to create the program. Is it to increase engagement at the office? Is it to create a culture of healthy competition? Different organizations have different objectives. 

Ensure that your “Why” aligns with your business goals. Your recognition program must encourage your employees to uphold the values that the company aligns with.
 

Allocate the Budget:

This is easily one of the most important questions: “How much can we allocate for this each month?” You will need to allocate money for the rewards and the employee recognition software. While you must choose a tool that works perfectly for your organization, the rewards you choose are also representative of who you are as an organization.   

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Ask for Feedback:

Before you finalize the type of rewards on offer, make sure you collect detailed feedback from employees. They know better about what they want. Surveys are a great way to get great ideas from your employees. You can even offer anonymous surveys, it will allow their creative juices to flow. 

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Determine the Reward Types:

To come up with the right kind of rewards, you must identify the unique needs of your employees, considering factors such as job, age, education, likes, and dislikes, and offer segmented benefits accordingly. 

Go for a people-first approach for employee rewards. A few examples of such rewards are:

• Access to mental health professionals and meditation apps
• Financial wellness perks such as access to financial advisors and savings programs
• Offer work-life balance perks such as flexible working hours, paid time off, etc
• Subsidized gym memberships or access to fitness classes
• Nutrition counseling and healthy meal plans for remote employees
• Flexible parental leave policies for new parents
• Student loan repayment assistance programs 
• Sponsorships for employees to attend industry-related events

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Make sure that the rewards are a combination of monetary and non-monetary incentives. According to a Harvard Business Review report, monetary incentives drive fast change and increase output among executives. Verbal or written praise from managers, or acknowledgment from the leadership team, or opportunities for better roles are considered on par with financial incentives, says a McKinsey survey.

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Define Criteria for Recognition:

The next step is to define eligibility for the employee recognition program. There should be clear and transparent guidelines on how one can be eligible for the rewards. Create a reward program where different types of contributions are rewarded, so that everyone feels they can be eligible as well. You don’t want to create a perception where only the “top performer” rakes in all the rewards. 

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Introduce the Program:

The problem with such a program is that it will fail without proper communication. Everyone from executives to managers should be educated about the rewards program, and how they can be a part of it. While individual teams can meet often to discuss this, there should be efforts during company-wide meetings too. 

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Measure the Results:

Once the program is underway, make sure you are measuring the results too. There should be managers whose added responsibility should be to measure employee engagement and participation in the program. You can also collect anonymous feedback from employees to find out what they are feeling about the perks on offer, the criteria to be eligible for rewards, and how it is being implemented. 

Set target KPIs so that the managers know how the rewards program is faring. There should be consistent growth in terms of engagement and output. 

Below are some of the KPIs to measure:

• Employee Participation Rate
• Employee Retention Rate
• Higher Engagement Scores Among Employees
• Redemption of Rate of Rewards
• Satisfaction With the Rewards Program

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Using the Right Rewards Platform:

Working with the best recognition platform is a must because your rewards program shouldn’t be a dampener on the day-to-day operations or affect the workflow in any manner. It should be easy to integrate with the existing technology stack and with other 3rd party tools.

There shouldn’t be a steep learning curve associated with it. It should offer you a variety of choices when it comes to rewards. From employee experience to gathering real-time data, the platform must be able to perform in all of these areas, with ease. Post-implement support is also crucial, you must check on those lines as well. 

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Wrapping Up:

Businesses that don’t have a recognition program struggle to keep their employees happy and satisfied. Why? Because they rarely find opportunities to recognize the contribution of their employees. A business with a rewards program will find themselves on “Great Places to Work” because their employees are genuinely happy to play a part in the success. 

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If you are looking to create an employee rewards strategy and are wondering where to start, let us help you get started. The Reward Store is one of the best plug-and-play rewards and recognition programs that lets you immediately get started. Get in touch with us to know more.

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