An increasing number of companies are starting to implement HR rewards and different forms of employee recognition as incentives to drive optimal performance from their employees.
This is a brilliant initiative! Not only do employees directly benefit from added rewards to enjoy personally, the company also has the advantage of a high-performing team working together to reach business goals and create success.
In this article, we will provide a guide to HR rewards and further discuss how employee performance can be positively influenced as a result of these incentives.
HR rewards describe the benefits that are offered to employees as a way to acknowledge and congratulate them on outstanding performance in their field of work.
These rewards are commonly used to incentivize employees to work harder and produce higher quality work to continue obtaining further rewards.
Read below for the three main types of rewards that employers can offer their team!
Financial rewards usually come in the form of bonuses or salary increases.
Non-financial rewards, however, don’t offer your employees direct monetary gain and instead benefit them financially in the long run. These HR rewards usually take the form of paying for your employee’s medical aid, gym membership, parking fees, or giving them a gift card, so while they don’t have a cash incentive, these rewards will help save employees money in the long run.
In terms of which option is most ideal, non-financial HR rewards tend to have a more positive impact for the company and for the majority of employees.
This is mainly due to the lack of pressure the company faces in not having to extend a large lump sum all at once. They can instead pay smaller amounts each month allowing for more convenient budgeting and financial planning - this makes non-financial HR rewards ideal for small business and start up’s too.
With non-financial rewards, employees also enjoy the rewards over a longer period of time and can find stability in this consistent basis, letting them feel motivated and fulfilled longer-term.
Extrinsic rewards are HR rewards that are tangible, such as gifts, a day off, or even salary increases similar to the financial rewards we spoke about above.
Intrinsic rewards are thus non-tangible and are more difficult to identify than extrinsic rewards. They are internal forms of appreciation that employees get for completing a task or job, are used to elicit a positive emotional reaction and these HR rewards differ from person to person as well.
Examples of intrinsic rewards include praise for a job well done which results in a feeling of accomplishment, gaining trust and respect from the rest of the team and learning a new skill to feel well informed and knowledgeable. All of these validations of performance help employees gain a sense of fulfillment when they realize that they truly have important roles within the company.
Extrinsic rewards improve an employee’s performance by conveying appreciation for the work they’ve done while intrinsically rewarding your people can help them feel valued and secure within their place in the company.
It’s important to find a balance between the two and not rely on only one to enhance an employee’s work ethic.
Performance-based HR rewards are rewards given to an employee with regard to their high performance and to congratulate them for a job well done. These rewards will be in the form of gifts, commission, bonuses, incentive schemes, etc.
Membership rewards, on the other hand, are rewards that you earn for simply being a member of the team, regardless of performance and your consistency in meeting goals. These types of gifts can include, but are not limited to, the company funding your medical aid, sick leave or even providing an annual salary increase that is in line with inflation.
What Type Of Reward System Is Best?
It’s important to recognize that the most ideal results are obtained by using a combination of the above rewards, and not limiting your employees to one form of recognition.
Take the time to get to know your people, their preferences and the method of recognition that will speak best to their unique personalities. This minimum amount of effort from your side will result in having a team that’s not only motivated to perform well, but one that also has trust and faith in their company’s leadership.
The first largest reason to implement HR rewards and methods of employee recognition is due to the direct impact they have on driving high performance, work ethic and employee morale in the long term.
Rewards push your employees to work harder and faster and to push themselves to reach their goals. Giving your people a sense of direction in having something physical to work towards, and providing a token of accomplishment for when they do meet goals can help them maintain consistent effort and a sense of achievement everyday on the job.
Employee recognition also works similarly and can be seen as an intrinsic reward. If you congratulate, thank, and openly recognize your employee for a job well done, it will leave them feeling proud of themselves and content with the position that they’re working in.
This will only drive them to gain that recognition and those feelings again, and as a result, this can encourage your people to work diligently on a consistent basis.
Rewarding and recognizing your team creates a positive work environment and leads to greater employee engagement and retention.
Related: Types Of Employee Rewards: A Quick Guide For HR Professionals
As we mentioned above, reward and recognition push your employees to work harder, be better and to give the job their all.
It’s common for employees to hit a professional plateau and even lose interest in their work if they do not have a significant goal to work towards. Keep your people motivated and happy by using a balanced form of various HR rewards.
Employee recognition will push your employees to work harder and help the company gain the highest performance from their team, thus benefiting both sides in the long run.
It’s important to have a balance of both! Employees need enough recognition to motivate them to work hard, be productive and produce high standards of work on a consistent basis.
Rewards are also important as they incentivize employees in a more concrete manner than intrinsic motivation. Use this type of recognition to maintain your employee’s interest in the job.
However, always remain aware of what these rewards are being used to do and ensure they fuel passion, purpose and productivity and do not create pressure or fear.
For best results, we would recommend following a combined system here too!
Structured reward systems are great because your employees know that there is something that they are working towards, which can be a very encouraging and motivating factor.
The downside of this can be that consistent rewards also create expectations and open a path for employees to feel uncomfortable or upset if a certain reward is not what they were expecting or if the value of the reward suddenly changes. Be careful to not tread in the wrong direction as it could have the opposite effect on your team and cause a decrease in productivity and work ethic.
Spontaneous rewards are beneficial due to the added element of surprise and the sense of satisfaction that comes with receiving something without any prior notice.
For this reward, it’s important to make your spontaneous recognition personal to the specific employee! This can have a larger impact than a miscellaneous and random reward given out for the sake of it.
Spontaneous rewards tend to motivate employees to consistently perform well so they can receive constant recognition and maintain a feeling of value for an outstanding job well done.
Employees love and appreciate it more when rewards are personalized and also peak their interest. While getting a cash bonus or gift card is great, there are a variety of other rewards that will be more motivating and satisfying for them.
Below, we have listed different rewards that you can use to validate your high performing team!
The rewards are as follows: