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5 problems and solutions for employee rewards programs

Most of us agree that employee rewards and recognition are an important component of employee engagement, retention, and productivity. But how closely have you examined what’s working and not working about the employee rewards industry?  

Let’s face it, when you have a podcast whose episodes “call BS” on various aspects of the HR industry it’s provocative, and you better back it up with insightful commentary. Our Cofounder and COO Kevin joined host Anthony Onesto of the New Yawk HR podcast, and the result: some super interesting real talk around employee recognition and rewards programs.

When looking at the employee rewards and recognition market, mainly from the perspective of the millennial generation, a central question that permeated the conversation was: Are HR staff, and the employees they support, equipped with the right strategies to build productive relationships, maximize employee engagement, and improve organizational performance?

[Check out the podcast here]


The preference for experiential recognition is now considerably higher than tangible employee gifts (a norm aligned with the fact that millennials are now the majority of the workforce, and  a generation who places more value on experiences vs. tangible gifts).

The data shows that HR organizations are responding, and adopting experiences to recognize employees at work (whether for onboarding, anniversaries, spot recognition, etc.). But there’s still a lot of room for improvement and education in the recognition space.

So, what exactly about recognition and rewards programs did the podcast call BS on?

Below are a few of the high-level takeaways on the current rewards and recognition industry that Kevin discusses during the conversation:

5 Takeaways on employee rewards and recognition programs.

Insight #1.

In 2016, the U.S. invested $50B+ into non-cash employee rewards (swag/company merch, giftcards). But, according to Bersin by Deloitte, an astounding 87% of recognition programs have ZERO impact on organizational performance (engagement, retention, productivity). Why? The reward they’re receiving is irrelevant, transactional and not meaningful.

Solution
: In order to create a program that positively impacts employee engagement the recognition should be personal and intentional. The effect of meaningful experiential recognition helps companies achieve the organizational results they are looking for. You can hear the full context of this discussion point at the 16:48 mark.

Insight #2.

Very few managers currently have developed a personal, meaningful relationship with their employees; but how do you scale that across the rest of the organization? This is where more meaningful recognition practices can have a definitive impact.

Solution
: Empowering managers with a turnkey platform to give timely recognition like personalized experiences is a differentiator for scaling. You can hear the full context of this discussion point at the 12:38 mark.

Insight #3.

Swag and gift cards are “lame”, so managers aren’t excited to give them, which results in the recognition moment not happening.

Solution
: When meaningful recognition programs are rolled out company wide, there’s an increase in frequency of giving recognition because it’s top of mind, which is backed up by our internal data. You can hear the full context of this discussion point at the 15:25 mark.

Insight #4.

Points-based programs: Early tests revealed employees correlate spending their own money with the points they’ve earned instead of focusing on the behaviors and values that got them the points. They treated their recognition program transactionally, almost as a bank account which negatively affects the work culture.

Solution
: Best-in-class programs “get” the importance of establishing a direct connection between effort/achievement>recognition/reward. Recognition should be immediate and allow employees to directly associate the reward with their awesome work. You can hear the full context of this discussion point at the 30:35 mark.

Insight #5.

Inertia, and/or the thought that people always want cash, has fueled the deprioritization of recognition. Some believe people always prefer cash thinking it’s better and can be used on anything they want, including experiences. But cash has “diminishing marginal utility”. Cash is more likely spent quietly paying bills. Cash is transactional, not shared and not social. And the organizational impact you want from a recognition program (higher engagement, productivity and performance) is lost with cash.

Solution
: Recognition has been proven to have a major impact on employee engagement, and quiet cash-based programs won’t help you build the awareness you need to be successful. Prioritize reward programs that empower employees to confidently celebrate each other’s achievements, building a culture of recognition and stronger relationships across teams. Consider incorporating more options like non-monetary employee incentives. You can hear the full context of this discussion point at the 19:16 mark.

[Check out the podcast here]

Build meaningful employee rewards and recognition programs.

For those looking to inspire employee motivation through more meaningful recognition efforts, check out one of our favorite eBooks on how to inspire employee motivation. And to learn more about Blueboard and get in touch with our team, request a demo today.

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