Done right, employee rewards are a great way to motivate your employees, boost productivity and create a strong company culture.
This 2023, company culture and employee experience (EX) is something we’re all increasingly aware of when it comes to gauging how successful we are as a business.
Companies that invest in providing great EX are up to 400% more profitable than those that don’t, and they appear twice as often on the American Customer Satisfaction Index.
EX is closely linked to engagement and when employees are engaged, businesses see a 41% reduction in absenteeism and a 17% increase in productivity.
Clearly, having happy and engaged employees isn’t just good for morale, it is good for business! Employee rewards can play a key part in achieving this if they’re done right.
So, how do you do employee rewards right? How do you use them to improve company culture and employee experience, as well as boost motivation and productivity?
In this guide, we’re covering exactly that: the pros and cons of employee rewards, how to use them to motivate and engage your employees, and 29 great reward ideas to use in your business!
Let’s dive right in!
Done right, employee rewards are a great way to motivate your employees, improve employee satisfaction and create a strong great company culture.
That said, if they’re not done right, they can cause more problems than they solve. To be effective, employee rewards need to walk the line between intrinsic and extrinsic motivation.
Intrinsic motivation is when we’re motivated by internal factors, such as the satisfaction or joy we feel when we’re doing something.
Extrinsic motivation is when we’re motivated by external factors like gaining a reward or avoiding a punishment. The proverbial ‘carrot and stick’ are examples of extrinsic motivation.
They both work, but only in particular circumstances. If you need to be nurturing intrinsic motivation, adding an extrinsic motivator will do more harm than good to performance.
This video by Bernd Geropp details the two and how they work:
Rather than using employee rewards as a carrot to motivate employees to perform and behave how you want them to, use them as a way to boost intrinsic motivation.
Right, let’s look at the pros and cons of employee rewards:
There are many important benefits to demonstrating employee recognition and rewarding employees. These include:
Now that you have an idea of how employee rewards can benefit your business, let’s look at some of the potential disadvantages and pitfalls you may encounter:
The disadvantages of employee rewards mainly revolve around how they’re managed and what can happen when they’re used solely as extrinsic motivators:
As you can see, employee rewards offer some great benefits but have some pretty serious disadvantages too.
So, how do you do employee rewards right? How do you maximize the benefits and minimize the disadvantages?
The key to doing it right is to use employee rewards as a way of demonstrating that your employees are recognized and valued for their contributions to the company.
Rather than using rewards as extrinsic motivators or incentives to be earned, use them as a means to convey recognition and appreciation.
If rewards are given as tokens of appreciation, they become part of a good relationship between the company the employee. This improves retention, employee satisfaction and company culture.
They make employees feel valued, appreciated, and trusted. They also make them feel like they belong, and that they’re contributing to the greater good of the organization as a whole.
Right, let’s look at some examples of employee rewards that you can use to demonstrate recognition and your appreciation:
Rewards don’t have to cost the company a lot of money to be valuable to employees. Here are some examples of free employee rewards that they will love:
Employee recognition is closely linked to performance. In one study done in 2020, 92% of employees reported that when they’re recognized for specific actions, they’re more likely to repeat them in the future.
There are many ways to show employees that you recognize them and value what they contribute. The aim here is to communicate that you have taken note of their efforts and appreciate them.
Being personal and specific makes recognition more meaningful too. Here are some ways to demonstrate employee recognition:
The key to effective recognition is to be personal, specific, and timely. Thank them as soon as possible for their contribution and be specific about what you appreciate and the value it brought. Highlight how their actions align with company objectives or value too.
One of the simplest and most effective ways of showing an employee that they’re seen, heard and valued is to schedule some one-on-one time with them. This should be a time to focus on how you can help them grow.
Investing time and attention in your employees demonstrates that you’re interested in them as people, rather than as tools to achieve the outcomes of their position at your company. Offer them guidance, connect them to people who can advance their training, or mentor them to grow.
When it comes to workplace perks, there are many ways to reward employees that are completely free but still valued and important.
Non-monetary workplace perks can be anything your employees really like. Popular options are the best parking spot or a reserved parking spot, the coveted desk/chair/space in the office, or a bigger workspace or better office.
A lot of employees appreciate growth opportunities. If someone has taken on additional responsibilities, show that it is recognized and appreciated by giving them an appropriate title.
Making someone the ‘manager’, ‘lead’ or ‘director’ on a specific project does not mean you’re promoting them, but it does demonstrate appreciation for their extra efforts.
Similarly, giving people who are hungry for more responsibility and want to grow additional responsibilities shows them that you recognize their potential and trust in their abilities.
If you’re using branded company swag for your marketing, you can re-purpose any leftover merchandise as employee gifts.
Swag is great for onboarding new recruits and making them feel part of the company and it is great for bringing some unity to teams with matching apparel, mugs, or stationery.
Higher-value items, like electronics or nice drinkware, can make great rewards for employees who deserve something a bit more special too.
Giving employees some extra time off after completing a particularly hard project or just as a token of appreciation for work well done is something every employee will appreciate!
Added leave days, a half-day Friday, or a long weekend won’t break the bank for your company. A break from routine and some downtime can boost morale and productivity too, making it a win-win for everyone.
Giving employees the right to call dibs on anything they want to a set period is a fun and playful way to show employees that they’re appreciated. An item like a ‘Dibs Stick’ can be given to a specific employee for that week before it goes to someone else the next week.
Holding the ‘Dibs Stick’ means they can call dibs any one thing during that week. They can choose if they will use it to skip something like locking up or snag something like the best parking space.
These employee gifts ideas make great rewards. They’re easy to personalize and you can control how much you spend on them too:
Food is a universal favorite – everyone loves something yummy and the options are endless! From doughnuts to artisanal charcuterie boards, coffee, craft beer, or special wine there is something for everyone.
This kind of gift allows you to demonstrate that you really know your employees too. If you have someone who’s really into something, in particular, focus on that to make it meaningful.
These can be a little on the pricey end of the spectrum but electronics make great employee gifts. Wireless headphones, speakers, PC accessories, portable drives, and USB sticks are all popular items. The key here is to watch the quality and know what your employee will value most.
If your employee loves cooking and hosting dinner parties or prides themselves in their cocktail making abilities, they will appreciate something for their kitchen or bar. Cocktail shakers, fancy glasses, serving platters, and nice tableware will definitely be appreciated.
High-quality notebooks, pens, calendars, planners, and office stationery also make great employee gifts. Whether they’re branded, personalized, or just attractive and good quality, they’re a universal favorite that is also functional.
A thoughtful gift for their office or desk is always a nice employee reward. Functional items like bookends or paperweights and decorative items like framed art prints or a photo frame for a picture of their family are great options. Look for things that match their style and are relevant to their interests and passions to make it more personal and meaningful.
Studies have shown that plants and greenery indoors are good for our physical and mental health. They can even boost productivity in the workplace.
They’re also very popular and the chances are you have more than one passionate ‘plant parent’ on your team! A small indoor plant in a nice pot is a gift that many employees will love!
Give your employees tickets to a sports match, concert, movie, or theatre for a gift they can share with friends or family. Choosing an event that they will love makes it personal and allowing them to include a loved one makes it meaningful.
Often, experiences are valued more than physical items so tickets are a great way to combine the two and give your employee something extra memorable.
Small personalized items like pins, mugs, stickers, and magnets make great gifts that don’t cost a lot. They’re thoughtful and unique, which adds value to otherwise low-value items.
Funky and fun options are images of their pets, a quirky thing they say often, or a quote from their favorite book or movie.
Vouchers for local cafes and restaurants are a great way to combine a material gift with a memorable experience for your employee. They can be as big or small as you feel appropriate and the employee can always pay in the difference if they choose to go for something more expensive.
Vouchers may seem a bit impersonal but the place you choose offers an opportunity to personalize the gift. Choose a place that makes something they love or have expressed wanting to try to make it more meaningful.
Employee rewards don’t have to be material objects. Sometimes a well-chosen service or paid subscription can hold more valuable for them than a material gift that costs a lot more. Here are some great options to consider:
Many great publications are only available to paid subscribers so a subscription to the New York Magazine, The Atlantic, Wired, or Tech Crunch can make a great gift.
Subscriptions for a set period, like 6 months or a year, are usually not very expensive. Allow your employee to choose from a selection or choose one that for them that will resonate with their interests.
Give your employees the gift of hours of ad-free enjoyment with a premium subscription to a streaming service like YouTube, Spotify, or Apple Music.
A Subscription to a mindfulness and meditation app like Insight Timer, Headspace, or Calm can also be a great gift. It demonstrates that you’re invested in their well-being and encourages them to take time to relax.
Memberships to museums make excellent gifts for employees, especially if they have young kids, as they can share the experiences with their families and friends. Museum memberships are surprisingly inexpensive and can be enjoyed many times over.
A national parks entrance pass is a great gift for any employee who enjoys spending time outdoors. Passes give access to many different sites, which offer a variety of activities like hiking, camping, fishing, skiing, and swimming.
Valid for a year at a time, passes are a gift that will provide a huge amount of value to any employee who loves nature and enjoys some physical activity.
We have all had those days where we get home from a long day and just can’t face cooking a meal! Vouchers for a local food delivery service, like Uber Eats, is a simple gift that most employees will appreciate. Let them choose the provider or choose one that services the area in which they live.
Many employees are hungry to learn, grow and broaden their skillsets. Paying for online courses is a great way to show them that you recognize this and are invested in their growth and development.
There are loads of great online learning platforms like Udemy and LinkedIn Learning that offer courses for just about every industry. Bonus: you benefit from an upskilled employee on your team!
Employees everywhere are encouraged to think outside the box and come up with creative solutions. Here are some special and creative employee rewards ideas to fuel their creativity and overall well-being:
Paying for classes for an employee’s creative passion is a truly personal and meaningful gift. Here are some lessons and classes you can consider:
Set a budget for employees to use for ‘fun’. They can choose, plan and enjoy any activities they want using their budget for fun. You can also add funds to the fun kitty as an informal reward for great work.
Employees can get creative and curate an event or activity everyone will enjoy and participate in. It gives them autonomy, an opportunity to be creative, and an opportunity to work as a team on something fun and rewarding.
The covid-19 pandemic has reshaped how we work, how we live, and how we relate to one another. With many employees working from home, it has become challenging to keep workplace relationships strong.
Personalized care packages are a great way to show appreciation for your employees working from home. Packages can be as big or small as you like. Home office items like ergonomic laptop stands or stationery, a work branded water bottle, and comfy socks are great gifts.
You can also opt for self-care and comfort items like foam baths, aromatherapy candles, and a selection of snacks.
Care packages can be different for different employees, teams, or divisions, allowing you to make them as personalized as you like.
Set aside some time for employees to work on things they love doing but often don’t get to work on because they’re not a priority for the company.
What this looks like will vary depending on what kind of business you have. This time aims to allow employees to update content, change outdated systems, do things better or in a new way – to develop something new or improve on something old.
The key is that these are things the employees want to work on. Things they’re passionate about. The change of pace and an opportunity to work on something personally rewarding is a great reward. Plus, some great ideas happen when employees are given free rein to try something new!
These days many employees are developing their professional presence in the industry as individuals, as well as for their employers. You can give them a bump by giving them exposure that has their name on it.
If an employee is contributing their expertise or insight for content that is relevant to your industry, put their name on it or quote them and then promote that article on LinkedIn or submit it to Forbes.
If all employees drink alcohol, organizing a wine or beer tasting at a local winery or brewery is a great group outing. Events like this work really well because they’re structured enough to keep the whole group together, but not so structured that no one can relax and have spontaneous fun.
Exercise is a very important aspect of our well-being. It impacts our mood, our ability to focus, how well we sleep, and our overall health.
Sponsoring an employee’s fitness classes is a great gift as it shows that you care enough about them to invest in their health and well-being.
Classes for just about any type of exercise are available online or in-person, for individuals or groups.
In conclusion, when employee rewards and recognition are done right, they’re a great way to build strong company culture, improve employee experience and satisfaction, and boost motivation and productivity.
Today, we have covered the pros and cons of employee rewards, how to do them right, and covered 29 great examples of employee rewards to use for employee recognition and appreciation in your business.
Which rewards will work best for your business and who will you thank first?!
Employee rewards and employee recognition are important aspects of creating a strong company culture. When employees feel seen, valued and appreciated, their employee experience is better and they're more satisfied. This leads to higher motivation and productivity, fewer absentee days, higher levels of employee advocacy, better customer satisfaction and improved company profitability. Check out the full guide for more on the pros and cons of employee rewards and how to make the most of them.
Employee rewards do not have to cost money to be valuable. Two high-impact, low-cost employee rewards are recognition and individual attention. Acknowledging employees' efforts and contributions, spending time with them to develop their skills and truly focusing your attention on them can be more profound than many tangible gifts. Check out the full guide for more valuable free employee reward ideas to boost motivation.
Immediately. To be effective, rewards need to tied to the completion of the task that is being rewarded - say thank you immediately and offer a reward if one is appropriate. For structured rewards that are evaluated over time, the intervals should be as short as the metric being measured allows. When intervals are too long, employees lose focus and motivation. Check out the full guide for more on how to implement an effective employee rewards system.
Business2Community: The Pros and Cons of Employee Incentive Programs
Element Three: 5 Ways Company Swag Boosts Company Culture
HubSpot: 5 Guaranteed Ways to Boost Job Satisfaction on Your Team
HubSpot: The Power of Praise & Recognition on Employee Happiness
McKinsey & Company: This Time It’s Personal: Shaping The ‘New Possible’ Through Employee Experience
Research Gate: Influence of Reward Systems on Motivation – Pros and Cons Based on Current Literature (2019)
Venturi: 17 Ways to Make Employee Rewards More Motivating (Pdf)
Word at Work: The Role of Recognition in the Employee Experience