How To Create An Employee Reward Program

Post A Job For Free, Promote It For A Fee

Summary: An employee reward program is a way to acknowledge and reward hard work on the part of employees. If it’s a program, it will likely have rules and goals to hit to get a reward and will give an idea of what the rewards will be.

Employee reward programs are an excellent way to help employee motivation and retention. So long as the reward programs are fair, achievable, and desirable, of course. Monetary rewards are the easiest because everyone appreciates them, and they don’t require much creativity on the employer’s part.

Key Takeaways:

Employee reward programs are a good way to help motivate employees to up their achievements.
There are both monetary rewards and non-monetary rewards. Both can be very successful, but in the case of the latter, it’s important to make sure that the rewards are something that your employees value.
Reward programs can also have a positive effect on talent acquisition and retention. Not only are the rewards themselves valuable, but it makes it clear to the employees that they’re valued by their bosses.

What Is an Employee Reward Program?

An employee rewards program is an organization-wide program that focuses on recognizing and rewarding employees’ achievements. While the majority of workplaces do reward employees with raises or bonuses, a rewards program will be a defined collection of rewards and perks that employees can access as long as they reach certain milestones.

A well-defined and accessible program can lead to higher employee engagement, motivation, and satisfaction. It shows that you acknowledge their contributions and appreciate the extra effort they put in.

How to Design an Employee Reward Program

How effective an employee reward program is will depend on the nature of the rewards and how much employees actually want them. That means it’s important to consider what you’re implementing and even poll your employees before settling on anything. Here are some suggestions to get your employee rewards program off the ground.

What are the goals of the program? Depending on the purpose of your rewards program, you will offer different incentives for different achievements. So consider if you want to increase engagement, up productivity, acknowledge employees’ hard work, emphasize deadlines, or encourage employee retention.
Determine what you want to reward. If you’re looking to emphasize getting things done on schedule, then rewards for employees who meet or beat deadlines would be a good idea. You should also consider how easy it is to gain a reward. Do you want to hand out small rewards to almost everyone? Or just highlight your best achievers?
Decide what is eligible for rewards. Once you’ve decided what behavior you want to reward, you have to choose what’s eligible for a reward. It should be something that is consistent and measurable so that it’s clear what employees need to do to receive them.
Survey your employees. Once you have the basics down, you should turn to your employees. Different people value different things, so it’s a good idea to get a survey of what the people in your workplace want. While monetary rewards are always popular, there may be other types of recognition that employees would like.
Select the rewards. The next step is to decide what your rewards are going to be. If it’s a program, then it should be made clear. Employees should be able to see what they can get for their achievements. You don’t need to be too detailed – it can be just “a gift card,” but the idea is employees know what they’re working towards.
Implement the system. After the planning stage is over, you need to put the system into action. When it’s in its trial phase, you should see how employees react to it and check to see if it ups performance. If it doesn’t seem too popular, it may be time to consider altering it. After all, you want it to be something that employees are excited about.
Ask for feedback. It’s very important to ask your employees what they think of the program. If they aren’t prizes that people are interested in, then you’re unlikely to get much engagement. And if the requirements are vague or too difficult to achieve, you may have the opposite effect you’re looking for and instead discourage people.

Types of Rewards

There are many different types of rewards that you can offer your employees. This will depend on the purpose of your rewards program and how much you’re able to afford. However, rewards are broken down into two primary categories:

Monetary. If you can afford it, this is going to be the most universally popular of your rewards. While people take pride in their jobs, they’re there to make money. And there isn’t much that’s a clearer show of appreciation than a raise or a bonus.

Monetary rewards include:
- Raises. This is the type of reward that almost every organization has. Upping your employee’s pay is a clear way of showing that you value them and their work. Generally, it’s only considered a reward if it’s more than the cost of living.
- Bonuses. A bonus is an excellent way to show appreciation. It doesn’t need to be a large one – though the larger it is, the more appreciated it’ll be – but just the act of offering them a cash reward will show your appreciation.
- Gift cards. While not as open as cash, gift cards are another way to reward employees. It’ll cover part of their expenses, or they can use it to buy something they like.
- Paid vacations. This can overlap with non-monetary if you just pay for a vacation for them, but they don’t get any disposable income out of it. However, if you give them time off to take their vacation, then it’s a type of pay.
- PTO. Additional paid time off is another way to pay your employees. After all, you’re paying them the same amount even though they spend less time working.
- Stock options. Offering employees stock options in the company is another way of giving them something valuable. While it’s not as direct as a paycheck, it’s a way to increase their wealth. It also invests them in the company – literally.
- Payment for a large purchase. Covering the cost of a large purchase they’re making – like a new TV or a downpayment for a car, is another way to give them a financial boost that isn’t just writing them a check.
- Paid professional development. While less direct than many other rewards, offering to boost their professional development is something that will pay off for them in the long run. Additionally, it’ll help your organization, as it’ll also reap the rewards of increasing their expertise.
- Profit sharing. Not all businesses have profit-sharing programs. But if yours does, then offering them the ability to be part of it is another way to show appreciation and up their wealth. Additionally, it helps invests them in the company.
- Upgraded pay packages. Some reward programs will only offer certain pay packages to employees that hit certain goals. That’s a way to increase employee pay based on achievements and merit. It’s arguably fairer as well, so long as the package is the same for everyone who hits those goals.
- Tuition assistance. Paying for classes or paying off student loans is another monetary benefit. Many young people have student debt, and getting help paying that off is a way to lift a burden off them, as well as give them more disposable income.
Non-Monetary. In addition to monetary rewards, there are also ones that don’t directly contribute to the employee’s wealth. That doesn’t mean that they won’t be well received or highly motivating, but they often need to be more tailored to the individual than just cash.

Non-monetary rewards include:
- A charitable donation in the employee’s name. In this case, the employee should be able to select the charity that receives the donation. It’s also acceptable to give a list of charities and let them pick the one they prefer. After all, it isn’t much of a reward to donate to a charity they don’t like or support.
- Allowing them to take a morning or afternoon off. Extra time off is always appreciated. Letting them leave early or come in late can be an excellent incentive.
- Work from home privileges. Working from home is becoming more popular – particularly with younger workers. Offering them the ability to work from home or additional work-from-home days is another way to show appreciation.
- A party. Throwing a party in their honor is another way to highlight employee achievements. It doesn’t need to be anything fancy, but it’s important to give recognition when it’s due.
- Additional casual dress days. Being able to be comfortable at work is a major plus. Allowing additional casual days or causal vouchers can be an easy bonus to give them. Just make sure that they’re the kind of person who’d enjoy taking advantage of them. Not everyone wants to be the only one dressed down.
- A team trip. Offering a trip to a ski resort or beach can be a great way both to reward the team and encourage them to build bonds outside of the office. However, this type of reward is more suited as a reward to the whole team than an individual.
- Allowing them to bring their dog to the office. If the employee in question is a dog owner, giving them a few days to bring their dog into the office could be greatly appreciated. Of course, how well it’ll work will depend on their dog, so it might be worthwhile to do a trial run.
- Tickets to events. Giving them tickets to a concert, sporting event, or show is another way to reward employees. Make sure that it’s an event that they’re actually interested in going to, though, or it won’t have the same effect.
- A spa day. Paying for a visit to the spa can be an excellent way to show appreciation for a job well done. It also encourages relaxation and focusing on self-care for a while.
- A team dinner. Taking the team out to dinner – or lunch – on the company dime is another way to reward them. This sort of group reward is best when the whole team goes above and beyond.
- Awarding them a plague or certificate. Giving a high-achieving employee a plaque or certificate to celebrate their achievement shows that you’ve taken notice of their hard work and want to celebrate it.
- Writing them a thank-you note. A handwritten, genuine note can be an excellent way to show your thankfulness. It shows time and attention and that you aren’t afraid to show it.
- Points that can be exchanged for gifts. A points system is another way to do a rewards program. You can have a selection of items with set point costs. Employees can earn points for certain achievements and then exchange those for a gift of their choice.
- Public recognition. Giving a shout-out to an employee that does an especially good job is another way to show that you notice their contributions to the team. This can be in a meeting, during a work get-together, or other group events.
- Being entered into a drawing for a prize. Some offices will have weekly or monthly drawings for prizes. Achievements can get workers an entry into a contest and a chance to win a prize.
- Free lunch at a restaurant of the employee’s choice. Giving them a gift card or voucher for a free lunch is another way to show appreciation. Some organizations will offer free meals as a perk, so it can be more than one instance, as well.