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Three drivers of an effective employee recognition and reward scheme

uploaded on 29 September 2023

Best practice employee reward and recognition schemes are built around three design principles. How does your scheme measure up?  

 

Not all employee reward and recognition schemes are created equal. There’s a big difference between simply having an offer in place and one that drives business results. 

Too many prospective clients I speak with currently feel their reward and recognition scheme doesn’t work as intended. Frequently, complaints boil down to organisations having complicated processes and mechanisms for giving and accessing rewards, that leave employees feeling unintentionally frustrated rather than valued. 

When organisation’s invite us to review an existing approach or are thinking about an employee reward and recognition scheme for the first time, we focus on three simple questions; does your approach encourage employees to behave in a way that drives business success? How does it make recipients feel? How easy is your approach to administer?

These are the three design principles that drive an effective employee recognition and reward scheme. Let’s look at each in more detail.

 

1. Drive successful behaviour

When done well, employee reward and recognition can increase business performance by as much as 44%. For this to happen your approach needs to actively encourage employees to behave in a way known to drive successful business outcomes. Work with key stakeholders across the business to define the values and behaviours that drive business success. Prioritise the top five to seven behaviours and set these as the criteria for which recognition and reward will be given.

When employees see peers rewarded for displaying specific behaviours, they are motivated to do so themselves. For this reason, it’s important to recognise and reward the ‘big’ achievements, such as hitting a target but also the smaller acts of teamwork that contribute to the overall success of the organisation. Both kinds of recognition combined give employees a stronger sense that they are valued. Saying a regular thank you also builds trust and rapport that motivates people to do their best work.

 

2. A rewarding experience

Related to this point, a reward and recognition scheme can only have a positive impact if staff engage with it. If the act of giving or receiving recognition and reward feels good, it’s easier to maintain staff interest. Conversely, a poor experience is likely to put them off.

In our experience, four factors peak and sustain employee interest.

  • First any financial reward must be visible. Reward paid through regular salary payments will likely get lost in day-to-day spending. By contrast, when reward is given through a separate channel, such as a prepaid credit card or an eCode that recipients can swap for a gift cards, employees are much more likely to value it. Employees are also more likely to spend the reward on a treat they will remember rather than every day forgettable items.
  • Second, make the experience hassle-free by going digital to ensure employees can give or receive recognition and reward easily online or through an app.  As online consumers and users of social media, employees want and expect the same experience from their interactions with their employer.
  • Employees also want to choose their own reward which brings us to the third point.  Employees value reward more when it means something to them. As many as 70% of employees say they’d like to choose their own reward by receiving vouchers or gift cards.
  • The fourth and final factor is to catch employees in the act of doing good work and give recognition or reward immediately. One of the biggest problems with older, analogue schemes is the length of time it takes between earning and receiving reward. Reward needs to be immediate to encourage repeat behaviour.

Combined these four factors will deliver an enjoyable reward experience that’ll keep employees coming back for more.

 

3. Effortless administration

Similarly, the final design principle to consider is how easy is it for HR and reward colleagues to administer the scheme. Modern recognition and reward platforms provide the scheme owner and administrator with all the tools you need to set up, automate, and communicate your incentive programmes online with ease.

A digital first approach will enable you to say goodbye to the stress of keeping vouchers securely locked away in a draw, as well as time spent keeping a manual audit trail of spend. 

It’ll also provide you with invaluable management information system around use, engagement, spend and impact to share with key stakeholders. The data will enable you to check that reward and recognition is being distributed equitably and consistently across your organisation. Word will soon spread if it isn’t – which could have a negative impact on overall workforce motivation.

As well as helping to ensure you provide an efficient and effective scheme that is truly valued by your employees – this will help you save many hours of admin time.

Kate Chidlow, Head of Marketing, Edenred UK

Strengthen your recognition and reward scheme with Edenred

Use these design principles to reflect on the effectiveness of your current approach to employee reward and recognition. If you’d like to explore ways to strengthen your offer do contact us to find out more about how we can help. At Edenred we provide the reward mechanisms you need to set up, manage, and deliver recognition, reward and incentives that make a real difference to your employees' performance. 

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