People love rewards and recognition when it’s done properly. As the employer, you need to decide on a meaningful way to recognize your employees’ efforts.
However, it’s no secret that people at different stages of their lives appreciate different things. Naturally, their main motivators are based on their personal and professional goals. Therefore, creating an effective rewards program can be a challenge.
In this article, we’ll explain the different types of employee rewards that you can offer your team.
You’ll learn about intrinsic and extrinsic rewards, written and verbal praise, bonuses, peer-to-peer recognition, and financial and non-financial rewards.
This guide will give you all the tools you need to assess where your team is at and create a rewards system that will actually work.
There are two main categories of rewards that can increase motivation: intrinsic and extrinsic.
Intrinsic rewards are intangible, come from within, and do not exist physically. Intrinsic motivators can vary from person to person - what sparks action in one individual may not do the same for another.
Examples of intrinsic employee rewards include:
Although intrinsic rewards are non-tangible, they tend to result in higher levels of job satisfaction.
This is because intrinsic rewards make people feel valued. This feeling can be achieved by completing a task, being recognized as an important team member, or learning a new skill.
For example, let’s say there’s a business development representative who works for a SaaS company. If she increases the number of meetings she books from three to five meetings a week, she feels a sense of accomplishment, and will be motivated to book even more.
Extrinsic rewards are tangible and directly measurable. You can generally spot them in the office, and they impact performance and appreciation.
Examples of extrinsic benefits include:
Like intrinsic rewards, extrinsic motivators are not always received equally across the board. The key is to find a balance between these two types of employee rewards.
As the name suggests, a non-financial reward is a reward that is not a part of an employee’s pay.
Instead, non-financial rewards cover desirable “extras” that are at the organization’s disposal. Examples could include:
Unlike the financial reward, which are typically one-time rewards, non-financial rewards can have long-term positive effects, as employees often get to continue enjoying the benefits for an extended period of time.
Financial rewards aim to improve an employee’s financial well-being through a salary raise or bonus.
When it comes to bonuses, awarded amounts can vary greatly depending on the company's budget.
Small bonuses are often referred to as “spot bonuses” because they are given “on the spot”. Spot bonuses are monetary rewards given to an employee when they make a valuable contribution to the business. When using spot bonuses, timeliness is key. The sooner you give the reward, the more impactful it will be.
As far as employee rewards go, written thank you notes provide a solid way to express gratitude.
Think carefully about what you want to write, and personalize the message. Inserting something generic can come across as impersonal, like you didn’t really care.
Thank you notes aren’t the only option for written praise. You can also send a message via email, publish a post on LinkedIn, or share a note in your company newsletter.
An impromptu way to give recognition is verbal praise. Verbal praise is given by colleagues and managers to recognize a person’s outstanding work.
Verbal praise is mostly informal.
There are many compliments that you can choose from. For example, “Thank you for setting a good example for your co-workers”, or “Your contribution during our presentation was well received.”
Another type of reward that encourages engagement is positive peer-to-peer feedback.
People who work together certainly notice each other’s contributions in a way that managers do not.
Receiving positive encouragement from a colleague is a great confidence booster and can serve as an intrinsic reward. It also empowers employees to perform at their best, because they feel a sense of belonging.
In addition, peer-to-peer recognition is a key piece of a great company culture, as it creates an engaging and collaborative environment.
Allow your workers to acknowledge each other’s contributions in the company Slack channels, or even in meetings.
You can also hold events and activities where everyone can get to know each other. If staff members can develop personal relationships, they are more likely to want to recognize their peers.
Rewards and recognition vary from one organization to another, and so how you appreciate your employees will depend on your company’s unique culture and goals.
Employee recognition is a powerful way to motivate and retain staff. That said, the types of employee rewards you hand out have to appeal to your team. If they don’t, they won’t have a huge impact.
Stay in tune with your employees’ needs to ensure you’re implementing the most effective reward types.