January 22, 2021
Compelling questions that you need to answer in order to gauge the effectiveness of your employee reward systems.
The idea of work has radically evolved. For example, before the internet, the idea of remote work seems foolish—even absurd. Now every aspect of our work has been penetrated by technology’s omnipresence. The emerging business trends continue to reshape how we work and how we look at our jobs juxtaposed other aspects of our daily lives.
But aside from the changing workplaces and the dynamics within it, businesses are also redefining their treatment of employees and employee needs, often punctuating the importance of more holistic treatments to workers. They tailor work experience in a way that best captures workers at their most productive, acknowledging their changing needs and striving to satisfy these.
Writing for Forbes, vice president of sales at Wrike Patricia Duchene has cited some emerging aspects of the evolving workplace, including workers’ emphasis on “learnability” and “collaboration”, aspects regarded to boost employee morale and encourage productivity. And while we still have a long way to go, businesses try their best to experiment with a variety of loyalty systems for employees, also called employee recognition or engagement programs.
Loyalty systems for customers and employees essentially want to do the same thing: encourage continued devotion and support for an organisation through incentivising customer, employee actions.
The basic premise of employee loyalty systems is this: the more you reward your employees, the better they become at fulfilling the organisation’s mandate. Essentially, we know that rewards, even when taken out of this specific employee-focused context, motivate people to act a certain way. In a highly competitive world, rewards can (and do) become a “beacon of hope”, equalising the opportunities for those aspiring to sustain a competitive edge over others.
Aside from psychological and tangible benefits to the employees themselves, employee rewards are also cost-effective. Don’t believe me? Take a satisfied employee, for instance: a well-rewarded employee is more likely to stay longer within a company, as well as talk positively about the organisation she or he belongs in. This lowers employee churn rates and lowers the cost it takes to train and onboard new employees.
Although popular and rampant, some business leaders still think that employee reward systems are nothing more than another costly endeavour they couldn’t be bothered with. But the key is understanding how it's a vehicle for driving a better workforce. So how effective is it really? One of the most effective ways of gauging an employee loyalty system’s effectiveness is by asking the following questions:
Just like any other appealing rewards, the incentives you wish to include in your employee reward system must mean something to your employees. A bonus.ly article says that an employee reward system doesn’t have to be costly and then went on to provide a general, creative employee reward ideas list to get everybody else started. Some of the ideas we loved include professional development rewards, cash incentives, time off, and even travel rewards. Whatever you wish to include, make sure they resonate with your team’s values and preferences to keep them engaged with the program.
Another way of gauging its effectiveness is by observing how many of your eligible employees or team members are actually participating in your program. High engagement has a direct impact on your business’s success, especially its profitability. If the rewards interest many, then it keeps competition high, pushing them to be better at what they do in order to rise higher over the others. However, and you can call this an extension of the first point, rewards that are “cheap” wouldn’t be enough to hold your employees’ interests. Also, if they can easily get the rewards themselves—outside your help—they may not even give it a lingering thought. Remember, effective employee loyalty programs stimulate and hold employees’ interest, inspiring their continued engagement.
As I mentioned earlier, one of the main goals of the loyalty systems is to drive the company’s success (which is often measured through the increase of profits) through the recognition of employees’ contributions. Sometimes, the reward system and its inclusions are also influenced by the end-goal of the company. For instance, you want to increase your customer base, then you can include an aspect that focuses solely on referrals within the system. The employees, guided by the desire to procure the rewards promised, then goes on to share positive feedback about your organisation and refer others, therefore improving your bottom line.
Finally, see whether the “top earners” (the employees who get rewarded the most) are actually staying in your company. One of the most notable benefits of employee loyalty systems is its ability to inspire employee longevity in order to minimise employee churn rates. Of course, the reason behind this goes deeper than the rewards—employees simply want to feel appreciated. So, once you couple the reward and benefits with an acknowledgment of their contribution to the company, the longer they tend to stay.
Not only that, it’s helpful to keeping your team’s productivity high. Employee loyalty and engagement programs also boost your employee’s morale and loyalty and keeps your workplace a positively competitive environment.