What is Employee Reward System

Definition of Employee Reward Systems

Employee reward system is the benefits given by a business to reward a successful employee’s performance and motivate employees. Rewards are given separately from salary. It can be a monetary or physical reward. Today, it is used by many businesses, whether large or small, that want to increase the performance of their employees.

What are the Benefits of the Employee Reward System?

Organizing employee reward programs has many benefits for both the business and the employee. Some of the key benefits of implementing an employee reward system are as follows:

  • It increases the motivation of the employee by making him feel valued and supports him to perform better.
  • It increases productivity by encouraging employees to take initiative and be more interested in their work.
  • Increases retention rates by ensuring employees continue working in your business.
  • Promotes a positive competitive environment for employees to achieve rewards and business goals.
  • The positive emotions felt by employees develop positive relationships between employees – management – customers.

4 Ways to Reward Employees

There are multiple options that can be applied to reward employees. However, the 4 most basic methods to increase motivation are as follows:

  1. Monetary Rewards

Monetary rewards are one way to show employees that their hard work is noticed and appreciated. In monetary rewards, the amount of the reward can be adjusted according to the employee’s performance level. This allows employers to recognize employees for their special efforts and reward accordingly. Employees who know their efforts will be rewarded work more efficiently to perform higher.

  1. Non-Monetary Rewards

Non-monetary rewards are also one of the methods used to motivate employees. Offering a small reward or perks to top-performing employees keeps team members working efficiently. This can even ensure that existing projects are completed before the deadline.

Examples of non-monetary rewards are as follows:

  • Flexible scheduling that allows employees to set their own hours or work remotely,
  • Recognizing employees for their hard work in a way that makes everyone aware,
  • Training and development opportunities that will help employees’ careers,
  • Dinner at a favorite restaurant,
  • Small gifts with gift cards, movie tickets, or a thank-you note to show appreciation for their hard work.
  1. Assistance Rewards

The helping method includes rewards for services that benefit employees’ physical and mental health. Such rewards are a way to improve job performance as it will help employees become healthier. Benefit programs that differ from traditional rewards will make employees feel valued and supported by their employers.

Examples of aid rewards are as follows:

  • Discounts on local health services such as gym membership, spa treatment,
  • Support from experts such as dieticians and psychologists who come to the workplace at regular intervals,
  • Educational sessions on managing stress, failure or other challenges affecting human life
  1. Recognition Awards

The recognition reward system is a way to reward employees for their hard work by sharing their achievements with others. For example, instead of telling someone they did a good job helping a client, it might be to bring it up at a department meeting to let everyone know how they helped. Choosing the employee of the month or talking about the employee’s achievements at the meetings is also a method of rewarding.

These methods create a positive working environment for all employees. It also encourages other employees to work more efficiently.

How to Develop an Employee Reward Program?

There are some factors that employers should consider when organizing reward programs. It is possible to develop a rewards program by identifying the following factors:

  • What goals of the company is the award program organized to support?
  • What behaviors do employees show and what level of performance do they achieve to achieve the company’s goals?
  • How to identify key metrics about performance or behavior based on the employee’s or team’s past achievements?
  • What rewards would be appropriate?
  • Through what channels will we announce the reward program to employees?

Related Content: Ways to Create a Happy and Motivated Workplace