Employee Reward Schemes: Why You Need One & The Benefits

The relationship between employer and employee has changed drastically over the last few years. There’s long been an undercurrent power struggle between the two but over the Covid period, things changed drastically. There has been a major swing of power towards employees.

In fact, the EY Work Reimagined survey revealed that 64% of workers would leave their job if their employer didn’t offer flexibility. Overall, the goalposts have shifted for employers. Money is no longer the main driver in building a proactive, highly productive, engaged, and happy workforce. A good reward scheme is becoming an essential part of the employee package, making a significant impact on the motivation, commitment, and retention of top talent.

Employee reward schemes have become increasingly popular among businesses, both large and small, as they seek to attract, motivate, and retain their best talent. These programs provide employees with incentives for meeting or exceeding expectations, and can include a range of benefits such as bonuses, gift cards, and other non-monetary rewards like flexible working arrangements, recognition, or extra time off.

There are many benefits to implementing an employee reward scheme in your business. Firstly, they can help to increase employee motivation and engagement, as they provide clear and tangible goals for employees to work towards. This, in turn, can lead to higher levels of productivity, better quality work, and improved customer service. According to a study by the Incentive Research Foundation, rewards and recognition programs can improve employee performance by up to 44%.

Additionally, reward schemes can help to foster a positive and supportive workplace culture, as employees feel valued and appreciated for their contributions. This can lead to higher levels of employee retention, reducing the costs and time associated with recruitment and training. A survey found that 80% of employees would prefer additional benefits over a pay increase, indicating the importance of non-monetary rewards in retaining talent.

Furthermore, employee reward schemes can also act as a powerful recruitment tool, attracting top talent to your business by demonstrating your commitment to employee development and recognition. A report by the Society for Human Resource Management found that organizations with strong recognition programs have a lower turnover rate than those without.

Overall, a well-designed employee reward scheme can have a significant impact on your business, improving employee motivation, retention, and productivity, and ultimately contributing to the success of your organization. By investing in employee rewards, businesses can create a positive and supportive workplace culture that attracts and retains top talent, leading to improved performance and growth.

Why You Need an Employee Reward Scheme and Its Benefits

An employee reward scheme is a program within a company that offers a variety of ‘benefits’ to employees. It is an excellent way of incentivizing employees, as well as recognizing their contribution to the business; they want to feel appreciated and be recognized for being part of the company's success. Without their hard work and dedication, you probably wouldn’t have a business. So, it pays to thank them in some way and openly demonstrate they are highly valued. In fact, a company’s reward scheme or benefits can be a key differentiator from competitors, as well as a way to boost base pay.

Over the past few years, the type of reward has expanded from the standard healthcare and gym membership of the old days. Indeed, companies have had to become more flexible in what they offer according to their workforce. With the increase in working parents, particularly working mothers, the focus on family and childcare assistance is rapidly grown.

In today's competitive job market, businesses need to do more than just offer competitive salaries and benefits packages to attract and retain top talent. Employee reward schemes have become an essential tool for businesses to create a positive and supportive workplace culture, improve employee motivation and engagement, and ultimately contribute to the success of their organization. In this article, we will discuss several reasons why businesses need to adopt employee reward schemes in 2023.

Improved Employee Motivation and Engagement

One of the primary benefits of employee reward schemes is that they can significantly improve employee motivation and engagement. When employees feel that their hard work is being recognized and rewarded, they are more likely to be motivated to continue performing at a high level. According to a study by Gallup, companies with highly engaged workforces outperform their peers by 147% in earnings per share.

Employee reward schemes provide clear and tangible goals for employees to work towards, which can help to improve their motivation and engagement. These schemes can include a range of benefits such as bonuses, gift cards, and other non-monetary rewards like flexible working arrangements, recognition, or extra time off. A study by the Incentive Research Foundation found that rewards and recognition programs can improve employee performance by up to 44%.

Reduced Employee Turnover

Another significant benefit of employee reward schemes is that they can help to reduce employee turnover. High employee turnover rates can be costly for businesses, as they can lead to increased recruitment and training costs, lost productivity, and a negative impact on company culture. A survey by Glassdoor found that 80% of employees would prefer additional benefits over a pay increase, indicating the importance of non-monetary rewards in retaining talent.

Employee reward schemes can help to foster a positive and supportive workplace culture, as employees feel valued and appreciated for their contributions. This can lead to higher levels of employee retention, reducing the costs and time associated with recruitment and training. A report by the Society for Human Resource Management found that organizations with strong recognition programs have a lower turnover rate than those without.

Increased Productivity and Performance

Employee reward schemes can also help to increase productivity and performance. When employees feel that their work is being recognized and rewarded, they are more likely to put in extra effort and go above and beyond what is expected of them. This can lead to higher levels of productivity, better quality work, and improved customer service.

According to a study by the Incentive Research Foundation, employees who participate in reward and recognition programs are more productive and engaged than those who do not. The study found that reward and recognition programs can improve employee performance by up to 44%.

Attracting Top Talent

Employee reward schemes can also act as a powerful recruitment tool, attracting top talent to your business by demonstrating your commitment to employee development and recognition. In today's competitive job market, candidates are looking for more than just a salary and benefits package. They want to work for companies that value their contributions and provide opportunities for growth and development.

By offering employee reward schemes, businesses can create a positive and supportive workplace culture that attracts and retains top talent. According to a study by Glassdoor, 4 out of 5 employees would prefer new or additional benefits over a pay increase. This indicates that non-monetary rewards like recognition and flexible working arrangements are highly valued by employees and can be an effective tool for attracting top talent.

Improved Company Culture

Finally, employee reward schemes can help to improve company culture by fostering a positive and supportive work environment. When employees feel that their contributions are being recognized and rewarded, they are more likely to feel satisfied and engaged with their work. This can lead to a more positive and supportive workplace culture, which can improve employee morale, retention, and productivity. According to a survey by SHRM, organizations with strong recognition programs have a more positive workplace culture than those without.

10 Steps to Mastering Your Employee Reward Scheme

• Define Your Objectives: Before implementing an employee recognition and reward scheme using software, it's essential to understand why you're doing it. Define your objectives, such as improving employee engagement, boosting productivity, or reducing turnover.

• Identify the Criteria for Rewards: You need to decide which behaviors or outcomes you want to recognize and reward. Create criteria for rewards based on these behaviors and outcomes. For example, you might reward employees for exceeding sales targets, completing projects on time, or providing exceptional customer service.

• Choose the Right Rewards: Select rewards that are meaningful and aligned with your employees' preferences. Consider offering both monetary and non-monetary rewards, such as bonuses, gift cards, flexible working arrangements, or recognition.

• Implement an Employee Rewards Software: There are many employee rewards software options available, so choose one that aligns with your business goals and budget. Ensure that the software is user-friendly, secure, and customizable.

• Communicate the Program: Introduce the employee recognition and reward program to your employees and communicate the criteria for rewards. Ensure that the program is transparent and easy to understand.

• Encourage Participation: Encourage employee participation by making the program visible and accessible. Use the software to track and monitor employee progress toward rewards and provide regular updates to employees.

• Evaluate the Program: Evaluate the program's effectiveness regularly to ensure that it aligns with your business objectives and delivers results. Use feedback from employees and key performance metrics to make adjustments to the program as needed.

• Celebrate Successes: Celebrate the successes of your employees by publicly acknowledging their achievements and presenting rewards. Recognize the positive impact that employee recognition and rewards have had on the business.

• Promote Continuous Improvement: Continuously review and refine the employee recognition and reward program to ensure that it meets the changing needs of your employees and business.

• Train Managers: Train managers on the employee recognition and reward program and ensure that they are equipped to use the software effectively. This will help to ensure that the program is implemented consistently and fairly across the organization.
  
  

Employee Rewards for Business Growth

Over the past few years, employee recognition has certainly hit the headlines as companies fight to recruit and retain their staff. Employers have realized that money is not the only motivator for employees anymore. Whilst, in recent months, many businesses have supported their staff with cost of living bonuses, there’s also been a demand from employees for flexibility, skills training, mental health, and well-being support.

As companies worldwide strive for digitalization and business growth, it is becoming essential to keeping their staff motivated and on board. Rewarding employees for positive behaviors in the workplace boosts business growth.

Building a proactive, engaged, and flexible company culture, be it in an office, working from home, or a hybrid environment demonstrably boosts collaboration and productivity. Indeed, studies have shown that with highly motivated, engaged employees, companies are experiencing a 21% increase in productivity and a 41% decrease in absenteeism.

A well-constructed reward scheme that you can adapt to your specific needs allows you to build and launch your program within days. Set your own custom rewards, sell gift cards, establish a rewards points system, and send targeted messages from one dashboard.

Try Piggy for free or get your demo today and discover what Piggy can do for your business and your employees.