Resources

The Latest Incentive Industry Resources & News

Financial Benefits of Employee Reward Programs

How Reward Programs Can Impact a Company’s Finances
Monday, November 19, 2018

Published by: Online Rewards Employee Recognition

Employee Recognition

What are the financial benefits of employee reward programs?

The competitive business climate today means more CEOs, managers, and other executives are looking for ways to improve in quality while reducing costs in all areas of business. The tight job market means a tough run, especially for small businesses, whose employees are now expecting more from them than ever. The importance of motivating workers cannot be overemphasized, and employee reward programs are excellent ways to encourage employees to change critical behaviors and habits that benefit your business, which consequently lead to financial benefits.

How employee reward programs can directly impact a company’s finances

The primary driver of a business' success is its employees, as their productivity levels significantly affect the overall success of the business. Thus, it is essential that these workers are kept happy and satisfied by introducing an effective reward program into the company. Most companies have some form of a reward program, but few reap any significant rewards of these programs. This is because most reward programs are ineffective motivators because they do not satisfy the employees.

For a business’ reward program to lead to financial success, the program has to succeed in motivating the workforce. According to a report, 82% of employees that received a reward felt motivated, while 69% of employees that didn't receive a reward did not feel motivated. This reiterates the importance of implementing an effective reward program in your organization.

The common misconception is that monetary rewards are the best motivator. This fact has been debunked by a recent survey that indicated that about 88% of workers quit their jobs for reasons other than money. This has caused many debates among HR personnel about the most effective employee rewards. A report carried out in 2015 indicated what rewards highly engaged employees had received.

According to the report:

  • 30% received a cash bonus
  • 25% of these workers didn’t get anything other than a "thank you"
  • 23% percent received a meal or evening out covered by the company
  • 18% received a voucher to spend
  • 17% received overtime pay or training

This shows that even a regular "thank you" is an effective form of reward.

When your workers are motivated, they will put in exponentially more effort than they do when they’re not motivated. This increase in effort will lead to a higher level of productivity, and consequently a higher profit margin in your business.

Understanding what reward programs employees want

It is essential that you understand which rewards your employees want if you plan to satisfy them. This is the concept of personalizing rewards, and it is the difference between successful reward strategies and unsuccessful strategies. It is the job of the HR department to communicate regularly with employees to figure out their primary motivation, so your reward program can be tailored to the preference of your employees. Cash rewards are good, but as earlier demonstrated, there are other effective non-monetary reward options.

Rewards are an essential part of a company's business strategy, as they help in the attainment of the company's goals. Most organizations have a form of reward programs, but few of them are actually effective. This is because these organizations have failed to personalize their reward programs to fit their workers, leaving workers disgruntled and unsatisfied. To drive the financial success of your business, you have to design an effective reward system that will both satisfy and motivate your employees, while simultaneously making them more productive.

Should You Revise Your Company’s Bonus Strategy?

Adopt a Robust Incentive Program to Maximize Your Workforce
Thursday, November 15, 2018

Published by: Online Rewards Employee Recognition

Employee Recognition

Bonuses and incentives are tactics adopted by companies to improve employee efficiency. There are pretty effective employee recognition techniques when deployed correctly. Emphasis on correctly.

Unfortunately, these programs can end up becoming hindrances to the success of your business if they are not adequately planned and implemented. You should be careful when introducing new employee incentive programs into your business, as they could end up breeding frustration among your workers if not handled properly.

If your bonus program is costing your company a lot and you do not see the expected staff motivational boost, then it may be time for you to review your bonus policy. Let’s take a look at the reasons why you may need to revise your bonus strategy.

Performance Incentives or Bonuses

Many people believe that incentives and bonuses are the same—they are cut from the same cloth, as they are both ways of compensating workers beyond their regular income. But, they differ slightly. Bonuses are backward in orientation and are sometimes not connected to employee performance. They are awarded to recognize past achievements usually long after the employee reaches said achievement.

Bonuses have been used as a staff motivation tool for a very long time, but they have a weak motivating effect because they don’t make the connection between behavior and values. Also, bonuses don’t recognize the importance of a good working relationships between workers and their supervisors.

The two major types of bonuses are ad hoc and performance bonuses:

  • Ad hoc bonuses are unexpected and unplanned, and they do not usually require any upfront commitment.
  • Performance bonuses provide opportunities for employees to earn extra money by achieving specific goals. They need planning and budgeting throughout the specified task.

Incentives are forward looking because they affect performance more directly. Performance incentives have been adopted by managers as a motivator because they guarantee a better return on investment. Payment of an incentive is usually tied to the completion of a specific objective that has been communicated to the workers. Incentives can be given to individuals or a team, depending on the specified task.

Therefore, if you do not want to be left behind by the competition, you should adopt a robust employee incentive program to maximize your workforce.

Financial vs. Non-financial Rewards
Adapted scheme of rewards structure published at International Journal Of Scientific and Technology Research Volume 6, Issue 09, September 2017

How reliable is your employee incentive program?

It is just not enough to have a cash compensation package like bonuses and incentives; you have to consider some other things like the business goals, employee preferences, market trends, the desired behavior, and employee demographics.

It is also reasonable that you have a payment plan in place for the bonuses and incentives. If your incentive program lacks all these essential elements, then you need to go back to the drawing board and come up with a more suitable plan for your company.

Whether you decide to use bonuses or incentives in your company depends on the needs of your organization. One service that can help you with bonuses, incentives and employee rewards is Online Rewards. You should also consider the goals of your business, the culture of your organization and the preference of your employees.

Contact

Stop by before 10 am at our Cincinnati office and we'll treat you to one of the finest espressos around.


I would like to receive updates on service offerings, industry news, events and best practices from Online Rewards.


Cincinnati

Operations




441 Vine Street
Suite 501
Cincinnati, OH 45202
ph (888) 826-0783
fx (214) 242-4448

Dallas

Corporate





100 North Central Expressway
Suite 1120
Richardson, TX 75080
ph (888) 826-0783
fx (214) 242-4448

Take a Tour


Interested in seeing how Online Rewards has helped clients create award winning incentive and loyalty marketing programs?



Online Rewards
A brief tour with one of our Program Design Consultants will demonstrate how our unique approach helps clients achieve their incentive and loyalty marketing program goals.

 I would like to receive updates on service offerings, industry news, events and best practices from Online Rewards.