What’s the business case for an employee reward and recognition programme?

uploaded on 30 September 2018

In today’s challenging business environment, retaining and motivating good employees is a top priority for employers. A well-designed and executed reward and recognition programme is a proven way to drive performance and boost employee engagement.


As organisations look to finish the year strong, now is the best time for HR to review, refresh or think about introducing an employee appreciation scheme for the first time. Whether you’re looking to secure ongoing support or a new investment, here are seven compelling reasons to help leaders understand why they need a robust reward and recognition programme.

7 ways reward and recognition drives business performance

  1. When employees feel valued and their hard work is appreciated, they are more likely to remain motivated to perform at their best. The act of showing appreciation doesn’t have to be expensive. A simple, morale-boosting ‘thank you’ or token of appreciation goes a long way to making employees feel that their efforts are seen and valued.

  2. Related to this, the second driver for reward and recognition is that engaged employees are more committed to their work, more likely to stay with their employer, and more willing to go above and beyond to achieve company goals. A well-executed recognition programme helps to create a positive workplace culture that fosters engagement, which is a pre-requisite for higher levels of productivity and performance.

  3. Employees who feel valued and recognised are less likely to seek opportunities with a competitor organisation. Every time an employee leaves and needs to be replaced represents a cost to hire, train and get a new recruit up to speed. For a relatively small investment, recognition and reward schemes represent a significant cost saving for organisations by reducing turnover rates.

  4. A well-designed programme drives overall organisation performance by aligning employee performance with organisational values and goals. By linking recognition and reward to specific behaviours proven to be critical for business success. This means that employee appreciation drives a fourth business outcome - ensuring that employees’ efforts are directed to achieve business success.

    Reward and recognition programmes aren’t limited to improving performance at the individual level. By including team-based values and behaviours a business encourages closer collaboration and more effective ways of working between teams and across functions. 

  5. The fifth compelling reason for reward and recognition is to improve employee well-being. With almost half of employers saying financial wellbeing presents the biggest threat to employee performance in 2024 organisations are looking at every angle to support employee wellbeing. Employees that feel valued experience lower levels of stress and job dissatisfaction. This, in turn, leads to improved mental and physical health, reduce sickness absences and higher levels of performance.

  6. In a challenging recruitment market, the sixth driver for employee appreciation is to create a positive employer brand. When candidates see that an organisation values and rewards its people, they are more likely to be drawn to that company. A positive reputation for recognising and appreciating employees gives an employer a competitive advantage in a tight talent market.

  7. When delivered through a digital platform, reward and recognition programmes deliver a seventh business benefit – the ability to track and measure employee performance effectively. By collecting data on recognition and rewards, employers can identify top performers teams, any areas for development or improvement, and identify trends in employee engagement. This data-driven approach enables managers and leaders to manage performance for continuous improvement.

Always a top priority for employers, in the current climate employee performance is coming under greater scrutiny. By being clear about the business drivers for a reward and recognition programme, HR can support leaders to make informed decisions about how they can enhance employee engagement, motivation, performance, and loyalty.

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If you would like to assess the effectiveness of an existing recognition and reward programme or would like to know more about the design principles behind an effective scheme, book a free demo with our team. 

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