Knowing how to appreciate employees and their hard work might be one of the last things most organization focuses on. However, if you want to keep your employees engaged, productive, and motivated to do their best, you need to make sure their contributions don’t go unnoticed. In fact, 82 percent of employees “strongly” or “somewhat” agreed they wish they received more recognition at work. In addition, another 30 percent of employees feel “not very” or “not at all” valued by their managers and leaders. Keep reading to learn about the six types of employee rewards you can give to your workers to boost their productivity and performance.
The 6 Types of Employee Rewards
There are several ways you can categorize employees rewards, and many of them overlap. Below are six types of employee rewards that you can use to create an effective employee rewards program that your employees truly value and appreciate.
1. Intrinsic Rewards
Intrinsic rewards are intangible, psychological rewards that employees get from doing purposeful work and performing it well. For example, a reward is considered intrinsic when an employee:
- — Develops a new skill
- — Receives praise from a manager or leader they look up to, or
- — Establishes a collaborative relationship with a fellow teammate.
These are all examples of intrinsic rewards because they are internal to the work being performed and achieving them is largely attributed to one’s own effort. What’s more, intrinsic rewards is one of the least recognizable type of employee rewards (when compared to more concrete rewards). But, they are an invaluable component of any successful employee rewards system. This is because they engage on a deep level, providing meaning and satisfaction in ways other types of employee rewards can’t recreate.
2. Extrinsic Rewards
Extrinsic rewards are monetary or tangible rewards that are given to employees who have performed their work well. For example, this includes a salary increase, additional paid time off (PTO), and bonuses. These are all examples of extrinsic rewards because they are external to performing the work itself and are controlled by people other than the employee. Even though intrinsic rewards are meaningful and important, you shouldn’t forget about the more obvious forms of appreciation. This is because salary increases and bonuses alone don’t make a job worthwhile. In other words, a strong company culture and other intrinsic rewards will eventually come across as insincere without tangible rewards to support and show that your company values their employees.
3. Monetary Rewards
One of the most favourable and appreciated types of employee rewards is monetary rewards. Monetary rewards are self-explanatory — they are rewards given to employees that have a definitive monetary value. Moreover, it can come in the form of direct compensation or indirect compensation. Direct compensation involves a direct monetary reward and may include things like year-end bonuses, overtime rewards, or salary or wage increases. On the other hand, indirect compensation is when you pay for something for your employee, like their health insurance or parking fees.
4. Non-monetary Rewards
Non-monetary rewards are rewards that don’t have an explicit dollar value tied to them. In other words, they can’t be redeemed for cash. For example, this may include flexibility in when and where an employee works, tickets to shows, or gift cards. Non-monetary rewards may be one of the least effective types of employee rewards and yield no significant outcomes in regards to employee output. However, they are becoming increasingly popular and are here to stay for good. If you’re unsure of what non-monetary rewards to give, ask your employees! Doing so will show them that you’re considering their wants and will assure that you’ve made a more personalized choice.
5. Employee Incentives
Employee incentives include all the benefits your company offers to their employees. In essence, it can be monetary or non-monetary (but still tangible) rewards. For instance, employee incentives include better health and wellness benefits, a free gym membership, and more sick days. But, it is important to remember that incentives are most effective when they align with your company values as you can reward the kind of effort and behaviour you want to see more of. Additionally, they are given throughout the year to provide consistent boosts of motivation.
6. Wellness-based Rewards
Today, employee wellbeing and work-life balance are two concepts that are increasingly becoming a core element of modern work culture. As a result, one may even argue that one of the most effective and relevant types of employee rewards are wellness-based rewards. In fact, 66 percent of employees want more wellbeing support from their employer. After all, your people are the heart your company, so when they’re thriving, you flourish too. You can promote both mental and physical wellness across your company by offering appropriate incentives like stress reduction workshops, yoga classes, and gym memberships.
Enhance your rewards experience with the LeanSuite
Employee rewards are a useful tool for boosting workplace morale and performance. By creating an effective employee rewards program, you can show appreciation for good performance and high-quality work. With the LeanSuite’s Suggestion Platform, you can take advantage of the built-in recognition and rewards system and its marketplace feature. With the marketplace, you can build a custom prize catalogue and offer rewards unique to your workforce.