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Employee rewards programs have evolved significantly from their HR origins. Traditional rewards were point-in-time recognition intended to communicate a “thank you” to employees that might be soon forgotten.
Twenty-first century rewards have pivoted to a strategic focus that aligns closely with recruiting, employee engagement, and retention efforts. They’re comprehensive and inclusive in nature and designed to address some of the current issues employers are facing with their workforce.
What are Employee Rewards?
An employee rewards program creates unique opportunities for an organization to thank employees for something specific such as a job well-done, or completing a high-priority fire drill.
While historically rewards have been tied to standard employee compensation and benefits, they are evolving to be more comprehensive and individualistic as more focus is being placed on overall employee well-being.
Rewards vs Recognition
Rewards and recognition are connected and often grouped together as an employee benefit. But there are distinct differences that impact their application and reception.
Rewards are generally something tangible and tied to a specific situation. Examples might include a bonus payment, plaque, or gift card. Rewards are frequently a one-off event and typically given by HR or a direct manager. In contrast, recognition is broader in scope and focuses less on tangible items and more on the emotional aspect of calling out an act or performance that rises above the norm.
Both rewards and recognition are essential for creating a culture that drives high performance, but it’s important to remember to strike a balance between the two.
Types of Employee Rewards
There are so many great ways to reward employees for their contributions to the success of your organization ranging between traditional and innovative. Below we’ll explore some of the most common rewards used today.
There are two types of monetary rewards: direct and indirect. Direct compensation refers to actual pay, such as rate increases, bonuses, incentives, and overtime. Indirect compensation refers to perks or benefits for the employee which are paid totally or in part by the employer. It typically includes health & welfare insurance, car allowance, paid parking and other similar compensation.
Everyone likes to receive more money or financial benefits. But money alone is not usually sufficient to retain employees if the company culture is not welcoming and nurturing.
Intrinsic, extrinsic, and non-traditional rewards are all examples of non-monetary or “feel good” benefits. These keep employees engaged because they have specific value to employees.
Intrinsic rewards have psychological benefits. They represent things that are valuable to the employee because it comes from internal motivation. It represents something that the employee enjoys and wants to do. Extrinsic motivation refers to behaviors that the employee will perform in order to receive a reward that they perceive as valuable.
After the pandemic and in the midst of tough competition for talent, employees have gotten used to enjoying flexibility in their schedules, working from home, and traditional rewards. In the new reality, it’s time to up your rewards game to non-traditional rewards that are more personalized to employee needs.
Having a difficult time determining rewards? Ask the intended recipients: your employees! Giving people things that they really value shows that you’re listening, that you understand them, and that you care. Great, non-traditional rewards make life a little bit easier or more fun for your employees.
38 Impactful Employee Rewards Ideas
Aside from an excellent total compensation program, employers will need to understand the things that are most important to their workforce and incorporate them into their rewards programs. Typically, you can structure your rewards around 3 main buckets: rewarding work, inclusive benefits, and environmental rewards.
Fun (and Useful) Lifestyle Rewards
Sometimes, the best rewards are the ones that make life easier or more fun in some way. Your people have lives outside of work, and the rewards you provide can help them live their best lives.
- Access to a company car. There are some tech companies who have really upped the ante when trying to reward their highest performing employees. We’ve seen them go as far as buying company Teslas and allowing their top performers to drive them for a month at a time. Now, your company might not have the cash to purchase expensive vehicles like that, but you may have a fleet of company vehicles that you could share with employees.
- Company swag. Everyone loves swag! If your company produces apparel that employees love, then feel free to reward them with more of it when they hit their goals. You might even have certain items in your swag collection that can only be “unlocked” when an employee hits a milestone. These exclusive items will surely become a coveted badge of honor that all your employees will work towards.
- Surprise package sent to their home address. It’s exciting to get rewarded at work in front of peers and co-workers, but it’s often even more fun to be surprised by something at home. Fill the package with some of the employee’s favorite treats, possibly a few written notes from co-workers or executives, and maybe even some gift cards to local restaurants.
- Meal delivery subscription. For working professionals, taking the time to prepare a healthy meal can be an enormous challenge. Dinner preparations don’t only take time, but they can be expensive. A great way to reward an employee for outstanding work is to cover their meals for a month or two. This is made easy through meal delivery services like Blue Apron or HelloFresh. Just sign them up for a subscription, and they’ll have three or four meals sent to their doorstep every week.
- Subscription to a box-of-the-month club. Another fun thing you can do to reward top performers in your organization is to identify a unique subscription box that fits their particular interests. The possibilities here are nearly endless, and you’ll certainly be able to find something that any employee will love. There are boxes for sports fanatics, fashion lovers, gaming enthusiasts, workout warriors, makeup artists, and so much more.
- A year-long subscription to Spotify or Apple Music. Spotify and Apple Music are the two most popular music streaming services on earth. It’s likely that many of your employees are listening to these services already, but not all of them will have paid subscriptions. Even the ones that do would love for the company to foot the bill. A reward like this is practical and meaningful as these services are part of many employees’ daily routines.
- A year-long subscription to Netflix, Disney+, or Hulu. The top streaming services continue to put out great content but are also increasing their prices and becoming more expensive. Offering a year-long subscription to the service of their choice will provide your employees with hours of entertainment and a great way to unwind after work.
- A year-long subscription to Audible. Audible is the world leader in audiobooks. Audible subscriptions come with a free credit each month that the employee can use to purchase the audiobook of their choice. So by gifting a 12-month subscription, you’re essentially giving that employee the opportunity to listen to 12 books, plus any others they decide to purchase along the way.
- Free car washes. No one likes to drive a dirty car. But the only car washes that are reasonably affordable anymore are the ones where you have to scrub down your car yourself. Get your employees a couple of passes or even a membership to a local car wash so that they can get their vehicle cleaned regularly. This is a great gift because it might not be something that an employee would typically spend money on, but it’s something that immediately provides value.
- House cleaners. This is a great gift for anyone, but especially for employees with small children. We all know it’s hard enough to keep the house clean when you’re living in it alone, but by adding kids to the equation, it can be an enormous challenge. A great way to take this stress off an employee’s plate is to provide house cleaners to come and clean the place up. They might come once-a-week for a month, and your employee will be thrilled to have everything taken care of for them.
- Uber or Lyft credits. In big cities, many employees may not own cars and likely use ride-sharing services or public transportation to get to work every day. How great would it be if you could ease that burden by rewarding them with free rides? Uber and Lyft credits are easy to gift and are an extremely practical gift for high performers. They’re able to put this gift to work immediately and benefit from it every day.
- $100 gas card. If your employees are driving their own cars to work, then you know that one of the biggest expenses, especially for long-distance commuters is gas money! Even with prices dropping in 2020, paying for gas to make the commute is still a burden. Rewarding employees with gas cards to fill up on the company’s dime is a great way to help them feel loved and appreciated.
- Tickets to a sporting event or concert. Who doesn’t love tickets to see a live sporting event or performance from a favorite artist? If you’re lucky enough to be in an area that has a great concert venue or sports arena then free tickets to an event are a great way to go.
- Tickets to a local theater or art show. Maybe your employees don’t love sports, or maybe there aren’t any intriguing concerts in your area. Don’t let this stop you from giving your employees tickets. There are also local theater performances, art shows and exhibitions, and other attractions that are taking place in your area.
- Movie passes. Movie passes, especially when they include popcorn and soda, are a fun reward for any employee. Gift a few extra passes so they can bring family or friends. A night out at the movie theater may be exactly what they need to relax and recharge.
- Build the home library. Helping an employee build their home library is a fantastic way to demonstrate your gratitude for their hard work. Allow an employee to pick one or multiple books of their choice.
- Amazon Kindle. Amazon’s Kindle product opens up a world of possibilities for employees. They can choose from millions of book titles and have access to almost any work of literature in a matter of seconds. Plus, Kindle ebooks are typically cheaper than physical books, so the device will save employees money on future purchases.
- Financial classes and mentorship. There’s nothing more burdensome than the stress and anxiety that comes with debt. Unfortunately, many of your co-workers are likely making their way through life while carrying the enormous weight of student loans, car loans, credit card debt, mortgage payments, and more. Offering them an opportunity to learn how to manage their finances and better understand strategies for getting out of debt quickly can be life-changing.
- Fitness reward. Enhance the health and fitness of employees by providing a reward that allows them to improve their experience while working out. This could be a new pair of running shoes, a yoga mat, an Apple Watch, or access to a personal trainer. Whatever you decide, a fitness reward that enhances the workout experience might just be the perfect way for you to recognize and show gratitude for the hard work of your employees.
- Paid-paid vacation. Do you know what’s better than paid time off? Paid-paid time off. What does this mean? It’s when a company not only continues to pay an employee’s salary while they’re away, but when the company then pays for the employee’s vacation. This is basically a dream come true for employees everywhere and it makes for the perfect gift for your highest achievers. Let them choose their destination and accommodations, and let the company cover the bill.
- Airbnb or hotel credits. The most expensive aspect of any trip is the living accommodations. Why not make this more affordable so that your employees have more money to spend on experiences while they’re away? Offering to pay for a night or two of a hotel stay is an amazing way to show that you care and love your employees.
- Charitable donation. Some employees are extremely passionate about certain causes. They’ll dedicate their nights and weekends to working on projects aimed at bettering society. If you know you have an employee who is involved in this kind of work, consider making a donation to their favorite charity on their behalf.
- Cash. You know, sometimes there’s just nothing better than cold, hard cash. Giving a cash bonus to a high achieving employee is a great reward because they can do anything they want with it. There are no stipulations, there’s no attachment to certain stores or experiences, it’s just extra money in their bank account.
Gifts and memberships are great thank-yous but sometimes have a short shelf-life. Rewards that enrich employees’ work environment can have a much longer positive effect.
- Special parking privileges. This is more of a perk for bigger companies where some employees are forced to park far from the entrance, but it can definitely be an option for smaller companies as well. It’s not just that the employee gets to park in a spot right next to the front door, but it’s the fact that the spot is reserved for VIPs. By providing a special parking place, the employee will likely feel a hint of pride and have a smile on their face when they pull up to the office.
- Invitation to company offsite. In some companies it’s called the “President’s Club” and in others, it’s called a “High Achievers Retreat.” Whatever you want to call it, there’s an opportunity to take all your highest performing employees on an adventure outside the office each year and reward them for their great work.
- Dinner with the CEO. For most employees, opportunities to interact with the CEO are extremely rare, and may even be non-existent depending on the size of your organization. Yet everyone in the company knows who the CEO is, and would likely enjoy getting to know them. Rewarding a high achieving employee with the chance to attend a private dinner with the CEO is an exciting way to show you much you value that employee’s work.
- Office plant. Bring that zen garden feel to the office by gifting plants to your employees. Small succulents or other low-light plants are easy to care for and instantly add a nice splash of color to the office.
- New office chair. Let’s face it, most office chairs just aren’t very good. There’s not enough back support, they’re too wide, and the armrests are never in the right place. A great reward for outstanding performance is an upgrade to a better chair. Find something your employees wouldn’t mind spending hours in because they’re so comfortable.
- Standing desk. With a standing desk, an employee will continue to be able to work while also getting the benefit of stretching their legs and having their blood flow more easily throughout their body. These make an excellent gift!
- Home office upgrades. COVID-19 has forced much of the world’s workforce to work from home. Now that it appears that work-from-home will not be going away anytime soon, companies can reward top performers with the option to improve their home office. Whether that means purchasing a new desk, chair, monitor, laptop stand, or anything else, your employees will be grateful for the improvements.
- Coursera classes. The employees you’re looking to reward are likely awesome at what they do. After all, they’re the ones being rewarded for high performance! But if you ask them about their job, there are likely aspects of it that they feel inadequate in or would like to learn more about. If this is the case, then offering to pay for online classes that can take their skills to the next level is probably the best gift you can offer.
- Attend a conference. Many employees are looking to take their skills to the next level. It’s likely that there are conferences in their field where the best minds meet together to learn new skills and discuss new strategies. Paying for an employee to attend a conference (and even covering their flight and hotel stay if the conference is out of town) is an amazing way to reward high achieving employees.
- Thank you video. This is an idea that costs absolutely nothing but will leave a huge impact on the employee. Get an employee’s manager, director, or even the CEO to record a short video of themselves thanking the employee for their hard work and recognizing their achievements. It’ll be even more impactful if you can have multiple people do this and combine all the clips into a single video. Any employee will love to hear praise and gratitude from upper management, and they’ll be able to hold onto that video forever.
One size should definitely not fit everybody when it comes to rewards. A diverse benefits program is equitable and attractive to employees as well as future new hires.
- Floating holidays. It’s nice to have the same day off as friends and family for celebrations. But if you’re fostering a diverse, equitable, and inclusive (DE&I) culture, you’ll find that standard holidays may not be valued the same by all employees. Letting employees choose which holidays are important to them sends a clear message that your company supports differences.
- Health and welfare insurance. Provide comprehensive and inclusive coverage to employees. It removes the focus on worrying about life challenges and allows them to focus on the shared business objective.
- Generous paid time off. Time away from work is one of the best ways to ensure that time at work is highly productive. In general, the U.S. lags behind other industrialized countries in regard to the amount of time off provided so this is a definite competitive edge for many U.S. employers.
- Birthday paid time off. Let’s face it, no one really wants to work on their birthday. Birthdays are days of celebration and are best passed among family and friends. A really simple, affordable way to celebrate your employees and recognize their hard work is to treat their birthday as a company holiday! Give them the day off. Let them go have fun. Pay them while they’re away. It’s a small gesture that goes a long way.
- Gym membership. Helping employees stay healthy should be a top priority for companies everywhere. One proactive measure employers can take is to provide a gym membership. This will help incentivize employees to stay healthy and fit so that they have better overall outcomes. If your company cannot afford to pay for gym access for all its employees, start by giving it as a reward or bonus for high performers.
Your employees are diverse and unique. Strive to build a rewards program that reflects that uniqueness by providing a range of comforts and benefits that relieve personal worries. Although this can seem like a daunting task at first, it can be easily managed when broken down into a few impactful steps.
How to Start an Employee Rewards Program
Congratulations! If you are considering a rewards program for your company then you’re moving in the right direction. The right reward system can be highly motivating, which ultimately translates to more benefit to employer and employee.
Step 1: Form a Rewards Team
Form a cross-functional “rewards” team or committee with members that are invested in employee engagement. Determine the plan objectives and desired outcomes and create a plan that aligns with the goals of the program.
Step 2: Get Buy-In
Identify a realistic budget and obtain leadership input and engagement. HR may be the driving force or have the responsibility for the creation and maintenance, but rewarding employees is everyone’s responsibility.
Step 3: Explore Reward Options
Investigate options for rewards that are inclusive and best suit your workforce. This could look like polling employees to assess what they find valuable or collaborating with a company that specializes in rewards, giving employees the power to choose their reward from a catalogue. Be creative and innovative. Don’t be afraid to try something completely new.
Step 4: Roll Out
Communicate your plan. Part of the benefit of a rewards program is to allow for some autonomy in giving or recommending rewards, but it’s still necessary to have a written policy outlining guidelines and eligibility to ensure fairness and appropriateness.
Ensure that everyone in the organization understands the objectives, procedure, and rules but also feels empowered to recommend a reward for their co-workers.
Regardless of what program you implement, remember to always include accountability for management and leadership to ensure the program’s success.
The Value of an Employee Rewards Program
It should seem obvious that a well-crafted employee rewards program has numerous benefits for employees as well as the employer. Unfortunately, it has historically been viewed more often as a “feel good” afterthought.
Studies continue to report on the positive returns on investment (ROI) to organizations that invest in a rewards program. However, an article in SHRM’s HR Magazine warns that producing hard numbers is a bit of a challenge, especially when trying to measure how good people feel.
But while hard numbers are difficult to produce, experts like those at SHRM make it clear that these programs are well worth the effort. As the authors point out, “Just because something can’t be measured doesn’t mean it has no value”.
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Questions You’ve Asked Us About Employee Rewards
Beth has many years of corporate HR and business experience in a variety of business environments. She found her second career writing a wide variety of HR content (DE&I, thought leadership, blog articles, eBooks, case studies, and more) for HR SaaS companies.