Do employee rewards programs actually work?
The short answer is yes. But before you start delivering proverbial pats on the back, you should learn the how and why behind effective rewards programs.
These days, rewards are expected
The majority of today’s workforce is made up of millennials (16-34 year-olds) who expect an engaging and rewarding work experience. According to a global survey conducted by Universum, 93% of millennials expect feedback at least once per month and 25% expect it every day. But millennials aren’t the only ones looking for kudos. Fifty percent of all employees believe that trust is built and relationships are improved when they are thanked by their managers. In that same study, 69% of employees said they would work harder if they felt their efforts were better appreciated. Rewards don’t necessarily need to come from bosses though — 44% of employees are willing to regularly give each other the recognition they deserve.
A scientifically sound idea
It’s been proven that humans have a deep neurological connection to rewards. Harvard researchers Paul Lawrence and Nitin Nohria suggest that a well-designed rewards program can hit all four social components that drive human behavior in the workplace: to acquire, bond, innovate and defend.
Here’s how each component plays out:
- Acquire — An employee acquires a higher status from a recognition or reward.
- Bond — Receiving a reward forms a bond between the employee and the reward-giver.
- Innovate — When an employee is rewarded, they feel innovative for solving an important problem or thinking of a new idea.
- Defend — Rewards help an employee defend the belief that he or she is good at what they do and have chosen the right company.
The results speak for themselves
Rewarded employees are happier employees. In fact, companies with engaging recognition programs have a 31% lower turnover rate. It’s obvious how a rewards program benefits employees, but evidence also suggests that there may be a deeper connection to a company’s overall success. A study from the Incentive Research Foundation found that among top-performing companies, there was a strong belief in rewards and recognition. So there’s clearly something to be said for positive reinforcement and rewards at work. A properly structured rewards program can establish a better work environment, improve employee retention and ultimately lead to a more profitable company. At Virtual Incentives, we build programs tailored to specific business needs by leveraging a range of tools like Virtual Visa® and MasterCard®, GiftCard PASS Instant Issue and our highly customizable Vi Platform. Explore our employee solutions to see what’s right for your rewards program.