If your company could increase profitability by an average of 21%, would you want to know how? What if you could simultaneously raise productivity, improve employee retention, reduce absenteeism, and spark better employee health outcomes?
It may surprise you that the primary driver behind all of those positive business results is the same thing: employee engagement.
Employee engagement helps companies achieve their goals. Studies by the Conference Board have found that disengaged employees cost U.S. companies at least $450 billion annually. Engaged employees, on the other hand, take on more responsibility and ownership of their attitudes, behavior, motivation, and productivity.
Simply put, organizations with employee engagement strategies in place perform at higher levels. According to research by Gallup, companies that prioritize employee engagement achieve earnings-per-share growth over four times that of their competitors.
So how can you improve employee engagement? Workplace recognition motivates employees by making them feel valued for their efforts and providing a sense of accomplishment. Individual, thoughtful employee rewards, in particular, have been proven to increase employee engagement.
The most meaningful employee recognition tactic is thoughtful recognition for hard work. This involves giving high-achieving employees specific rewards that suit their interests, rather than a generic reward.
For example, let’s say that a department manager hands out a Best Buy gift card each month to recognize the employee with the highest performance metrics over the prior period. There’s very little thought behind this reward, other than the fact that most people can find something they want at Best Buy. Of course, everyone who wins appreciates the recognition and reward for the hard work, but not all are particularly excited by the gift itself.
Compare that to the meaningful way in which another department manager approaches their monthly rewards and recognition. Once the winning employee is chosen, they reach out to the employee’s supervisor for help choosing a reward specific to the employee’s interests. Rewards can vary widely, from a gift card to a cycling superstore, to an all-day pampering experience at a local health spa, to … yes, a Best Buy gift card.
Rewarding employees based on their individual interests is key to workplace engagement. That’s not lost on the other employees, either. It feels good to be recognized as an individual. The gift, and the recognition itself, resonate more deeply with employees.
A simple way for companies to provide thoughtful, meaningful individual employee recognition is to provide various employee rewards from which to choose. These should be selected to address known and likely employee interests while keeping the company budget in mind.
To help make your “rewards catalog” as meaningful and individualized as possible, consider surveying employees as to where they’d go if they had a specific amount to spend on a trip, or what they’d buy with an extra sum of money within your budget. Use their answers to generate reward ideas.
The most effective and individually meaningful employee recognition and incentive programs provide high “trophy value.” Trophy value is defined as the ultimate impact of an award or incentive over time.
In a 2020 study, The Incentive Research Foundation (IRF) found that employees ranked cash bonuses highest when asked what type of performance rewards they preferred. Yet, when they were asked what performance rewards gave them the highest job satisfaction and motivated them to do their best work, cash bonuses didn’t rank in the top five.
Employees reported that company-paid experiential rewards, including travel, event tickets, outings for their family, extra paid PTO, and other such incentives, were far more rewarding than a simple cash bonus.
Cash bonuses certainly make employees happy. But ask them about that $1,000 bonus a year later, and many won’t remember. Those who remember may say it went toward bills or another life expense, which, while important, is less exciting.
Compare the trophy value of that cash bonus to the “trophy value” of an experiential reward that cost the company about the same amount – such as tickets to a World Series game or a weekend family pass to Disney World.
Some people may remember the money, but everyone will remember going to the World Series with a friend or taking their family to Disney World – not just a year later, but for many years to come.
We Can Help
Xceleration works hard to understand your business and puts together carefully curated reward catalogs designed to resonate with your team.
Contact Xceleration today to learn how our platform can equip your business with the tools you need for a meaningful employee recognition program.