Compensation and benefits remain a major draw for job applicants and employees alike. However, rewards programs or employee incentive programs can help buoy hope among workers in leaner times.
Rewards can refer to monetary incentives, but they can also be non-monetary items like gift cards, handwritten thank you notes, parties, free food, and more. Often, this costs less than raises or monetary bonuses, and it can have a great impact.
More than 80% of U.S. businesses spend $176 billion on incentives, which may include recognition rewards, travel, corporate gifting, and more. This encompasses award points, gift cards, trips and travel, merchandise, experiential rewards for sales staff, employees, channel partners, and customers, according to the 2022 Incentive Marketplace Estimate Research Study.
WATCH: The 4 Keys to Delivering a Personalized Total Rewards Program
Allianz stressed in a recent report that engaged employees outperform others, and their organizations are more profitable. In fact, employee engagement reduces absenteeism by as much as 41%. Also, Allianz sought feedback from its employees and took action. It focused on five priorities:
- Health and wellbeing
- Strategy and top management
- Job processes, innovation, and change
- Learning and development
- Recognition and rewards
This led to an all-encompassing rewards system that included providing employees with flexibility, learning opportunities, a focus on financial health, and the chance to participate in sports and cultural experiences.
Indeed points out that incentives are "optional perks" used to reward hard-working and achieving employees. The point of these programs is to build loyalty, reduce turnover, increase productivity and motivation, and improve the culture. Often, these rewards systems help drive healthy competition.
The range of rewards runs the gamut from allowing dogs in the office to applauding great work at a team meeting. Some companies have brought in food trucks or fitness classes. This helps to encourage people to return to the office, too. Employers might offer dinner to winning employees. Many have deployed the practice of sending handwritten notes from leadership to offer gratitude for a job well done.
READ: Employee Engagement and Experience for the Post-COVID World
Like everything else in the world of HR in the new normal, there is a focus on creating personalized rewards. The idea would be to provide the employee with experiences and bonuses that pertain to their unique needs and preferences. Some do this through third-party vendors. Others simply have a conversation with employees to determine whether an extra day off or tickets to a concert or having someone clean their home would be most appreciated.
As a recession looms and some key economic indicators sour, employers are looking for ways to save money and reduce their budgets. Rewards and perks are among some of the first things to get cut. However, some rewards, like a hearty thank you or even a meal are either free or affordable especially when compared to monetary bonuses. In hard times, employers should think of employee incentive programs as more important than ever.
"Employee rewards and recognition programs that acknowledge employees' efforts result in high-performing workplaces, more satisfied employees, and reduced turnover rates," according to Allianz. "Such programs create values that go beyond just pure financial benefits: they make work meaningful and life more fulfilling."
Don't miss The 4 Keys to Delivering a Personalized Total Rewards Program to learn more about personalized rewards programs. It's free to register. Those who join HR Exchange Network for the live event are eligible for SHRM credits.
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