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    How Important is Choice in Employee Reward Programs?

    Posted by brian on 11.27.2019

    Employee Reward Choices

    What is the perfect reward for employee recognition programs that target performance in areas like safety, wellness, customer service and training?  Let’s start by defining what we mean by “perfect.” The “perfect” award would be one that is both highly desired by the award recipient and one that will easily be remembered by that recipient for a long time to come.  Without that in mind, let’s first consider what award structures do not work (and yet are still commonly used):

    • Limited Choices – Often times companies deploying such programs overthink this part of their programs and waste time trying to curate a very limited selection of awards (or worse yet, a single award) to use to motivate their employees. It is far more effective to give employees lots of choices of the right types of awards.
    • Avoid Cash and Gift Cards – The other part of “perfect” is that the award must be memorable.Time and time again, every study shows that cash (and cash like substitutes like gift cards) are not memorable and therefore program participants are less likely to repeat the behavior as they quickly forget they ever received the award to begin with.

    When you offer a reward in exchange for specific employee goals or behavior, but the employee does not value the reward and/or cannot remember getting it you, you have missed your opportunity to change long-term behavior and wasted resources in the process.

     

    It is a simple concept but offering lots of choices is critical in creating effective employee recognition/rewards programs. This is easy to understand if you simply consider that you would be far more likely to find an award that would motivate you if you had 100 or 1,000 choices as opposed to 1 or 10 choices. So don’t get caught in a guessing game, when it comes to choosing the awards for a program, more is better but be sure to avoid cash and gift cards to satisfy the second part of “perfect” which is the award must be memorable.

     

    No two employees may agree on what makes a reward motivating. SHRM and Globoforce recently conducted a study that discusses both generational and cultural differences in employee reward choices.

     

    Many company leaders believe that “cash is King”, but cash incentives or rewards are fraught with issues. Cash is easily confused with compensation; it’s difficult to discontinue cash once you start offering it; there is no higher perceived value with cash (as there can be with tangible merchandise rewards) – it is what it is. The Incentive Marketing Association along with the Incentive Research Foundation have found that tangible merchandise rewards are by far the most effective awards.

     

    Offer Reward Choices

    It’s certainly important to offer a mix of rewards such as company perks, gift cards, travel experiences and all types of merchandise, and offering enough choice is critical.

    • Get employee input from representatives of the participant audience. Often the person or group in charge of designing the program or choosing the rewards is a very different demographic than the participants. Don’t guess what would motivate your workforce – ask them for input.
    • Offer a wide variety of name-brand merchandise. That vacuum cleaner that might make one employee yawn may be something another employee will go above and beyond in order to earn. Include all categories of merchandise.

    How much is too much? Some believe that a few choices are sufficient; other companies offer such a wide variety of choice that the employees can experience decision paralysis. The key is to partner with an experienced professional who can guide you through the reward selection process. They’ll make sure that you’re involving your participant audience in the selection, that company goals are aligned with program goals and that you have exactly the right mix and number of reward choices for your particular program and audience.

     

    According to the Society of Human Resources survey, 68 percent of HR professionals agree that employee recognition has a positive impact on retention and 56 percent said such programs also help with recruitment. Contact us today to get started designing your effective employee reward and recognition program!

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    Topics: Employee Reward and Recognition Programs, Employee Reward Programs, Employee Appreciation, employee engagement, Employee Incentive Program, Reward Employees

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