get a grip on employee rewards without hitting the books

The best guide to understanding employee rewards you can read in 10 minutes

Employee rewards are vital to your employee recognition and benefit mix. Getting the most from your rewards means getting to grips with the basics of using them. Enjoy the full rundown on what you need to know about employee rewards.

In this blog, we cover the fundamentals of:

1. What employee rewards are

2. Why employee rewards matter

3. When you should reward staff

4. How to manage your rewards

Click to jump to a section.

What employee rewards are

An employee reward is any token, gift, prize, or cash-value trophy. You use them to thank employees for something you or your company believe is valuable.

That’s the simple part. The harder part is figuring out how you can make the best use of them in your business.

How that intersects with recognition and incentives

Recognition

Rewards act as a signal boost for recognition. We’ve said this a few times, but rewards aren’t the same as recognition.

They’re linked, because rewards can back up recognition. But it’s important to get a grip on how recognition works without rewards to make sure you’re getting the most out of your rewards.

Incentives

It’s easy to confuse incentives and employee rewards and put them into the same neat category. The truth is they’re related, but very different ideas.

An incentive still involves a reward, but to be an incentive the employee reward needs to be withheld until the employee or team hits a target.

An effective incentive also has to be discussed ahead of time to give the employee motivation to complete a task or hit a milestone. Otherwise, you’re firmly in the world of just issuing rewards.

Now that you’ve got the what, we’ll walk you through the why, when and how of using employee rewards for your business.

We’ll start with why they’re so important.

Why you need to offer employee rewards

You need to offer rewards for three major reasons:

  • Intrinsic and extrinsic rewards.
  • Operant conditioning.
  • Expectation.

We’ll explain each of them here.

Intrinsic and extrinsic rewards

In the office, intrinsic reward is the feel-good sensation your staff take from their work. Feeling proud of achievements.

Taking pride in supporting their team. Feeling a sense of accomplishment in helping the business reach its goals.

Many elements go into that sensation. Your management style, engagement, the work itself. And recognition, too. That’s why it’s so important you get a grip on both rewards and recognition.

Extrinsic rewards, the other kind, are the ones you buy from us. They’re external rewards that have some kind of tangible element. Their real-world cash value is what fuels their value to staff.

The two need separate understanding, but they intersect. The physical (extrinsic) rewards make the intrinsic (emotional) rewards more powerful. They do this by turning them into trophies.

Not only do your staff get something they enjoy through the reward, there’s a lasting impact. Non-cash value rewards make excellent trophies. Unlike cash, which we’ve covered already as a poor reward.

Those trophies have an afterglow. They help your employee bask in a sense of achievement whenever they reflect on their reward.

That means employee rewards do more than make employees feel great about one achievement. It makes them feel better about their entire job. It’s a useful tool for building employee engagement.

Combined, there’s a big influence on motivation and job performance. Assuming you deploy your employee reward scheme effectively.

Operant conditioning

Operant conditioning is a fancy way of saying “getting people to do what you want.”

The concept is similar to Pavlov and his famous bell. Only instead of making your employees hungry you make them feel good.

The process is very simple. Your employees do something exceptional. What that is, we’ll address later. Recognising this exceptional event, you reward the employee.

The reward, as we’ve said, doubles-down on how good they already feel about their achievement.

It’s human nature to seek out those good feelings again. Behaviour you reward is behaviour you’re more likely to see repeated in the future.

As a result, you quietly train staff to associate good feelings with work achievements.

The rewards, like the ones we supply, make that easy.

Expectation

Rewards are an extremely common tool for incentives and motivation. Excellence requires acknowledgement and celebration. As we pointed out, rewards are a very effective tool for marking and creating high performance.

The flip side of rewards being commonplace is that they become an expectation. What was once a fringe benefit is something staff assume they’ll receive.

Expectation is very important to employees. Failing to meet it starts to erode the way employees see their employers. Over time, failing to match expectation chips away at their faith in the business.

This has a knock-on effect on employee engagement.

Summary:

To summarise, you need to offer rewards for three primary reasons.

1. They’re good for motivation, morale and productivity. They interact with and amplify the intrinsic rewards we mentioned to do that.

2. Employee rewards help you get more of what you want from staff. That’s by influencing and reinforcing their behaviour through rewards.

3. Staff are expecting to receive them.

Now it’s a question of when you should be doling out the rewards.

When you need to offer employee rewards

Love2shop Corporate RewardsAs we pointed out earlier, rewards work as behaviour modifiers. As such, rewards need deploying when you have a chance to create a better work culture.

We can’t tell you every single situation in your company when a reward would be appropriate.

At least not without one of the team getting to know your business first (you’re always welcome to give us a call, we’d love to do just that).

But we can give you, based on your experience, some suggestions to start the engine for you.

Reward employees for:

  1. Exceeding performance targets
  2. Exceptional customer service
  3. Sustained outstanding performance
  4. Putting other people’s needs before their own
  5. Going beyond their job description for the company
  6. Spotting major roadblocks and coming up with ways around them.
  7. Exceptional ideas for the future. You should already have a way to submit ideas, and you should reward the most exceptional ideas
  8. Volunteering their free time to support charities you value
  9. Putting your company values first in their work and behaviour
  10. Taking up an exceptional amount of voluntary training
  11. Solving a long-standing problem
  12. Organising fun (but appropriate) social events or drumming up community spirit
  13. Referring valuable new clients
  14. Displaying notable loyalty to the business
  15. Being a leader in the office, whether it’s making sure the office gets cleaned or helping employees deal with change

If you’re ever unsure if an employee should be rewarded, run a mental checklist. Ask yourself if the situation is:

  • Notable: For both the employee and their peers, the reward should attach to something obviously notable.
  • Positive: It should almost go without saying, but only reward positive behaviour.
  • Values-based: In clear alignment with your company values.
  • Purposeful: Contributes to the purpose and mission of your company.
  • Timely: Don’t let time pass between a noteworthy employee event and your offering of a reward.

Now you know what, why and when. It’s just a question how rewards should find their way to staff.

How to reward employees

The different types of employee rewards, how to deliver them to staff, and the relative merits of each approach.

Digital, physical, a blend of each, the benefits and drawbacks.

Types of rewards

  • Cash.
  • Cash-value.
    • Gift cards.
    • Vouchers.
    • Digital reward codes.
  • Trophies.
  • Merchandise.
  • Experiences.

The pros and cons of different employee rewards

Cash

Cash is not a great reward, even if it is a popular one. Read more about our opinion on that here. But to give you the summary: your staff are used to it.

It’s an existing transaction. Money is also a source of stress. It doesn’t make sense to confuse pay and rewards by rewarding with cash.

Gift Cards

Gift cardsLove2shop Gift Cards are versatile and exciting. Our gift cards come with more than 95 in-store retailers, and e-gift cards.

E-gift cards are a further selection of physical and digital brands accessed by swapping the value of your gift card online. Gift cards work for just about anyone, assuming you can get them delivered.

Vouchers

Vouchers are simple, tactile and immediate. We still see a place for the voucher in the reward marketplace.

Particularly for on the spot, quick rewards among staff that can’t use a phone or computer at work.

Digital rewards

Digital reward codesLove2shop Reward Codes (or e-codes) make it simple to ping rewards about teams that aren’t always in the same.

By using SMS and as delivery, anyone with a phone or computer can receive the reward.

Experiences

We’ve watched the demand for experience grow massively over the last two years. It’s a sign of changing times, as more of the younger generation enters the workforce.

As a result, there’s less emphasis on items and more longing for adventure. Whether it’s a group experience or individual experiences, they’re rising as workplace demographics change.

Trophies

There’s still a place for the simple trophy. Even if other rewards become their own sort of trophies, an actual trophy has value.

They’re very effective for capping off internal contests or light-hearted competitions. And they’re extremely cost-effective compared to the positives impact on morale.

Merchandise

We don’t just mean a company-branded windbreaker. We’re talking about electronics, fashion, kitchenware, cameras, sporting equipment, luggage and more.

Demand for merchandise tends to trend toward older generations, but there’s a lot of older workers to cater for.

Sourcing your rewards

Obviously, we’re a bit biased on this subject. But you would have to be mad to try to source and house a catalogue worth of rewards on your own.

Especially if you want to use a mix of rewards. Let a third party handle that for you. Reward suppliers offer you reward management, platforms, expertise on running schemes and quick delivery.

Our employee rewards as a case study

Your company doesn’t have to just pick a reward and stick with it. Appreciate’ teams are a great example of using a blend of rewards.

We have logistics, office-bound and mobile staff across multiple locations. We have to mix up how we reward teams.

Our warehouse staff spend most of their time away from a computer. To keep the warehouse ticking there’s a lot of picking, packing, boxing and counting going on.

So any kind of employee reward tends to be physical. Our warehouse teams also swell quite a lot during the run-up to Christmas. Gift cards and vouchers are timely and tangible.

In a warehouse environment, without phones or computers handy, they make perfect sense.

Some of our sales staff, on the other hand, are mobile. And we also have a second location down south.

Mobile sales staff are only in the office once or twice a month, and our second office come to HQ even more sporadically.

For them, a reward essentially has to be digital. We can send digital rewards quite easily with a digital reward code.

Anyone, anywhere, gets a code through their phone or email and cash them in straight away.

Meanwhile, we have a lot of flexibility for our permanent in-office staff. Because all of our employees have an Everyday Benefits discount gift card, we can top them up as a reward.

It saves us issuing a brand new gift card for every reward opportunity. They then spend the EDB discount card just like a regular Love2shop Gift Card.

We can also draw on business occasion cards and occasionally digital rewards.

Just like our clients, we have a mix of options at our disposal because we have a mix of staff.

What you need to do now about your employee rewards

Start implementing. Worry about formalising and automating later. You could spend a long time planning and worrying about the perfect reward scheme, but just getting started matters.

Time spent dithering is time spent not trying, doing or learning. You will want to deploy, assess, re-assess and adjust as time goes on. Starting with a modest, deliverable plan and expand on your successes.

Use our list of behaviours as inspiration to get started, and assemble a list of achievements to look for. Once you know what you want to reward, consider how your employees work.

Their unique work conditions will dictate the type of reward and how it’s delivered. Then just get to it.

If you want anything, whether that’s some gift cards or just some advice. Get in touch. We’d love to talk to you. Just use the live chat on this blog, call us on the number at the top of this page, or shoot us an email.

14 effective ways to improve staff retention and slash your recruitment budget

Staff retention is, undeniably, a vital element of any successful business.

The stats show that employee turnover is a giant financial burden to the nation’s employers.

The cost of voluntary turnover in the UK [1]:

  • Replacing a skilled employee costs
  • £20,000 to £30,000
  • Lost productivity of turnover costs
  • £16,000 to £39,000
  • Finding and training new staff costs
  • £3,000 to £6,500
  • Training a new employee takes
  • 12 to 18 months
  • In 2013 alone, turnover in the UK cost
  • Over £1 billion

Those figures show an unacceptable burden to UK business. And employees are still as prone to leave as ever – in 2016 alone, one in seven UK employees resigned from a position.

If you look around your office, could you honestly say you could afford to lose one in seven staff? For the sake of your company, we hope the answer is a resounding “no.”

The good news is many problems that cause high turnover are avoidable. With a bit of intent, investment and time, you could address staff retention in a quarter.

Start with the ideas we lay out here.

14 effective ways to improve your staff retention

Click below to jump to a section:

 

1. Advocate your values

If your business doesn’t have values, it’s time to think of investing in some. We choose the word investment on purpose.

Values are a significant boost to a company that lives and dies by upholding them. However, like any investment they need attention, maintenance and care to be valuable.

Modern staff increasingly indicate they want to work for ethical companies. The world is more aware than ever of the effects of our lives, personal and professional, on the wider world.

As a result, there’s some existential and internal pressure to behave in an ethical manner. Those needs dovetail neatly with what employees want from their employers.

Upholding some coherent, ethical values will help you with staff retention. [2]

2. Establish a purpose and talk about it

connecting employees with values helps improve employee retentionConnect the work your employees do to something more interesting than bars on a chart. Then make that your purpose, and find a way to talk about it.

Graphs and bar charts are too boring. They need context to get an emotional response from staff. They don’t seem as tangible as real-life outcomes.

Too many companies set out with a purpose, but it ends up as flimsy PR, internally and externally.

Employees stay with employers that make a real difference to the wider world. Connecting employees with a professional raison d’être gives them more than just figures and graphs to look to when it comes to what they take satisfaction in with their work. [3]

3. Recognise staff

Recognise your employees for anything that brings sincere value to your workplace. Not just for hitting targets, but for improving your workplace overall.

Recognition isn’t just another form of reward, it’s a way of building a relationship among a group.

From both managers and colleagues, it’s important for human beings to feel like a valued member of a team. It’s vital to our emotional comfort and personal and professional safety.

Recognition improves areas like motivation, productivity, engagement and satisfaction. It extends to retention, too: 55% of employees state that they would leave their current job for a company that embraces recognition. [4]

4. Empower staff and listen to them

Having a voice in decision-making gives staff a sense of buy-in over their work and what they’re being asked to do.

The only thing worse than not listening to staff, is listening to staff and ignoring what they say.

When your staff believe in a project that requires their expertise, they will be more invested in the project’s success.

Long-term, this helps build your employees’ engagement with their work and your company. [5]

Engaged employees are much more likely to stick with a company than disengaged employees.

That’s because having power and a voice is a big part of feeling close to an employer’s values and purpose.

5. Pay fair and competitive salaries

Your business isn’t “getting away” with anything by underpaying staff. You’re only going to guarantee they will leave.

A job can only ever look like a stepping stone an extremely underpaid employee.

Poor pay remains one of the top reasons an employee leaves a job. Considering the enormous cost of replacing talent we outlined earlier in this article, paying staff badly is at best an own-goal.

The short-term gains don’t make up for having to reinvest in new staff. [6]

6. Talk about the future

Not only the future of the business, but the future of the employee. It’s important for two major reasons.

First, job security. Being acknowledged as a part of the plans for the future makes it clear they have a place in the company.

That security lets staff stop fretting about the safety of their job, and focus on their work. [7]

Second, it gives staff the security that your company is the place to achieve their career goals.

You’ll struggle to retain staff in the long term if they aren’t sure what their role long-term role is. They need to know if that matches up their ambitions.

7. Reward excellence

Issue rewards for the best and brightest. As we’ve pointed out before, rewards for excellence become trophies.

Trophies become reminders of personal excellence, and they generate passive motivation.

Feeling valued, and having a token of that value, makes staff likely to seek another reward in the future. They’ll do that by striving for more achievement.

In that same article, we also discussed how ineffective cash is as a reward. It doesn’t create an effective association between achievement and the sensation of reward.

When giving rewards, prioritise non-cash rewards unless you absolutely have to use cash.

8. Invest in employee skills

You don’t want an immobile, low-skilled workforce. You’ll hobble your company’s growth. The problem is, it’s so easy to create one through underinvestement in skills.

Staff retention means putting resources into your people.

It will also stifle your ability to grow and change over time to meet the changing needs of the world around you.

Diversify and invest in your staff’s skills. Or the ones who can grow and change will end up walking away to companies offering to nurture them. [11]

9. Seek feedback and act on it

Receive feedback, and make sure to move on it. Asking for advice and input but ignoring replies actually makes the problem worse.

It’s a two-faced approach, paying lip-service to an obligation, but not truly believing in what you’re doing.

Ignoring feedback, especially when it was sought, will drive employee morale straight off a cliff. Low morale is a direct line to struggling with staff retention. [12]

10. Take an honest look at your management

It only takes one bad manager to undo a great deal of careful planning.

At its worst, half of employees choosing to go left directly because of management.

When a business makes significant cultural, or organisational, shifts it’s vital that every manager understands and embraces them. [10]

This blog has already covered how only measuring KPIs undermines your company’s values. We’ve also covered how toxic management can appear deceptively successful.

Toxic management will unpick every good intention you set out with in your business. And only measuring the success of KPIs and metrics encourages that toxic behaviour.

11. Open up flexible working

Flexibility matters to workers. Employees consistently demand flexibility from their employers.

Technology has allowed work to infiltrate the home lives of workers through computers.

As a result, the lines between the personal and professional are irreparably blurred.

Many staff see a fair but neccessary transaction here. In exchange for more work out of office hours, employers have less say over where that work takes place.

You might have some hard red lines, depending on your industry. You can’t fly in the face of regulations, legal constraints or even the need to staff your call centre. But flexibility will be a prized workplace benefit for the foreseeable future.

And employees will leave for employers with more flexible approaches to work. That’s a direct threat to staff retention.[8] [9]

12. Offer robust employee benefits

Employee benefits are not optional. They’re vital for attracting and keeping quality people.

Even just finding a way to alleviate the financial burden on your staff could be monumental.

Every day, a huge swathe of British workers struggle to prevent endless financial struggle from affecting their work. [13]

Employee benefits that improve quality of life increase employee attachment to employers.

Competitive employee benefits packages reduce personal issues that make employees think about leaving.

They also help you attract new employees at the same time. Combined it’s great for acquisition and staff retention.

13. Address your work environment

Does your workplace work for your workforce? As companies grow, workplaces themselves can become a millstone around the neck.

They can stop teams from reaching their potential and frustrate your employees. Frustrated employees are poor for staff retention.

Companies like Google, Facebook and Apple invest collective billions into their work environments. Because they know employees need appropriate surroundings to excel.

Some factors that make a workplace a better environment for your employees include:

  • The ability for employees to communicate properly.
  • Some degree of privacy, or space for quiet work.
  • Access to the technology they need to do their work, like wireless internet or video conferencing equipment.
  • A location that’s desirable without being inaccessible for staff.
  • Access to food and health services.
  • Safety of workers during their working day.

14. Embrace the exit interview

If an employee leaving your business is a cloud, then the exit interview needs to be the silver lining.

You can’t claw back an employee already walking out the door, but you can learn from what set them on that path.

Then you can apply that knowledge to the rest of the your staff. Especially the ones who might have one foot out the proverbial door.

Put employees at ease by holding the interview after they’ve secured a reference. That way there’s no fear that they’ll put their next role in jeopardy.

Ask open-ended questions that address their employee experience without being too negative. For instance, asking what an employee would like change about the company is more constructive than just asking what they didn’t like about working for your company.

Be positive, honest and above all else, keep their answers as confidential as possible.

Getting staff retention strategies off the ground

Ultimately, your company needs to believe in the change, and believe in the need for the change to take place. Not just individually, but as an organisation.

Making any kind of substantial change to how your business operates will tend to seem like a big deal. That means it’s important to have the will to overcome any hurdles.

Your senior leadership needs belief in the change to drive it home. In the long run, it will be worth it. Employees that stay longer bring immense value and understanding to your company.

Their contributions eclipse the price of making sure they stay in the fold in the first place. Once your senior leadership understand the need for change, it’s much easier to drive positive changes across a whole business.

References:

1.Oxford Economics, Brain Drain, 2014
2.https://www.forbes.com/sites/forrester/2018/05/23/millennials-call-for-values-driven-companies-but-theyre-not-the-only-ones-interested/
3.https://www.prweek.com/article/1463132/employees-engaged-purpose-led-companies-survey-says
4.2015 SHRM/Globoforce survey
5.https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2016/employee-engagement-and-retention.html#endnote-sup-3
6.https://www.hrdive.com/news/employees-most-likely-to-quit-for-a-higher-salary-elsewhere/527382/
7.https://hbr.org/2017/03/why-do-employees-stay-a-clear-career-path-and-good-pay-for-starters
8.https://www.ft.com/content/1c3e8d8a-6a70-11e8-aee1-39f3459514fd
9.https://www.personneltoday.com/hr/new-polls-confirm-desire-for-flexible-working-as-9-to-5-declines/
10.https://www.gallup.com/workplace/232955/no-employee-benefit-no-one-talking.aspx
11.https://www.forbes.com/sites/meghanbiro/2018/07/23/developing-your-employees-is-the-key-to-retention-here-are-4-smart-ways-to-start/#4b0155643734
12.https://news.gallup.com/businessjournal/22753/youve-gotten-employee-feedback-now-what.aspx
13.https://www.employeebenefits.co.uk/two-fifths-work-financial-worries/

REDUCING SICKNESS ABSENCE AND INCREASING EMPLOYEE ENGAGEMENT: PART TWO

With ever-increasing workloads, seemingly shorter pay-packets and every second person suffering from the flu, it’s little surprise that many employees succumb to the temptation to hit snooze on the alarm clock and call in sick. So what can companies do to ensure that going in to work is a better option?

In our last article we discussed the day-to-day measures that need to be put in place for a company to have an effective sickness absence policy. In the second part of our two-part series, we look at more proactive strategies that companies can implement. 

FOCUS ON EMPLOYEE MOTIVATION

Research shows that well motivated employees who enjoy high levels of job satisfaction, are more committed and less likely to succumb to the lure of the duvet day (or the temptation to interview for a job with a competitor).

Increasing autonomy where appropriate is a valuable staff motivation technique. It sends the message that team members are trusted and their contributions valued. And let’s face it, you are more likely to come up with innovative, time saving enhancements to a way of working if it’s your time you are saving. The fact that your time also happens to be the company’s time is secondary from an individual’s perspective.

It is also worth consulting with your employees on issues that affect them wherever possible. When people have been involved with a decision, they have a vested interest in a successful outcome and they are more likely to be committed to an environment where they feel that they have been given a stake in success.

OFFER FLEXIBILITY

If possible, give managers discretion to allow a reasonable degree of flexibility, for example, allowing an employee to come in an hour or so late to deal with a domestic issue and make up the time later. If the approach is implemented fairly and equally, it can help reduce sickies, improve employee relations and strengthen commitment.

Again, so long as it is used maturely, letting team members take an early lunch to beat the queues at the post-office should be appreciated and lead to a more committed workforce.

It’s also worth contemplating amending policies during major sporting events like the World Cup or the Olympics, extending the working day so that, for example, individuals can decide to watch a football match during work time without any loss of productivity from the company’s perspective (so long as they are not disrupting colleagues).

RECOGNISE ACHIEVEMENTS

Everybody needs recognition that their contribution is meaningful and appreciated. Implementing an employee recognition scheme that offers rewards based on achievement and empowers colleagues to thank one another can be a powerful way to tangibly invigorate engagement and optimise performance.

The effectiveness of a recognition scheme depends on timeliness of delivery, the ability to link recognition to corporate goals or values and the appeal of any rewards on offer – gift cards or digital rewards are a popular choice as they offer great choice to the employee.

The current generation of social recognition platforms means that this doesn’t need to be complicated to implement or require a high degree of management or administration time.

REWARD LOW ABSENCE RATES

Attendance incentives or bonuses are sometimes used to reward good attendance records as part of a broader absence management programme.

It’s an approach that requires careful consideration and planning so as not to disadvantage employees who have to take time off sick because of a disability or a pregnancy-related illness (both of these groups are protected in law), but there are plenty of ways of making sure that it is implemented fairly and with sensitivity. Again, the current generation of online reward platforms can support this type of approach with minimal implementation or administration time.

TAKE STEPS TO REDUCE STRESS

A little stress affects us all from time to time – but too much pressure can manifest itself in physical symptoms and evolve into serious illness that can lead to a protracted absence, removing resources and expertise from the workplace.

One effective counter-measure is to train line managers to look out for signs of stress among employees and try and find ways to help their teams cope better with the demands of their job. Encourage managers to use both formal and informal performance conversations to keep a check on how well teams are coping with their workload so that they can provide advice and support where needed.

Create a culture where people feel comfortable about approaching their managers and openly discuss any problems or concerns they have about work.

MAKE SURE SENIOR MANAGEMENT ARE VISIBLE

It’s a simple thing (and all the more difficult for that) but encouraging senior management to be visible at all levels of the business can also be a good way of encouraging engagement.

There’s always a risk that being too visible could lead to senior leaders being cornered by shop-floor workers with trivial complaints about lack of soap in the bathroom, but the chances are that if staff feel that they are being listened to by their line managers, they’ll see any interactions with senior management as an opportunity to shine not vent steam.

 

CONDUCT BOTH ANNUAL AND “PULSE” SURVEYS

Conducting regular workplace surveys is a good way of understanding where your company is and where it can improve. Technology enhancements mean that these don’t have to be time consuming to create, distribute or complete, but the data that they provide can be very useful, particularly when compared year-on-year.

It can also help you understand which members of your management and leadership team are particularly good at creating engaged team members, which can help inform discussions around pay review time.

Creating an engaged workforce that has less of a tendency to take unwarranted sickness absence can seem like a difficult task, but like many things in life, it starts by taking a few simple steps. Put the right polices in place and make some mild behaviour changes and you could quickly find an improvement in morale at all levels of the business. A happier workplace with a strong sense of community and purpose is one that people will want to come to, even when the warmth of a cosy duvet calls.