How to Motivate and Reward Employees in 2021

Published on:

December 3, 2020

What are rewards and recognition?

A robust employee reward and recognition scheme that makes your employees happier and more motivated will increase employee productivity. After the pandemic, the Office for National Statistics predicts “large falls in output per worker”.

When employees return to the office sometime next year, it will take more than the ability to work flexibly to motivate them. After months of pressure to adapt our working and personal lives, employers should embrace the opportunity to make work more meaningful for employees than it was before.

This year, the pandemic has stretched employees’ wellbeing and mental resilience to the limit. A survey by MIND in June 2020 revealed that 60% of adults said their mental health had worsened during the lockdown, while health experts talking to HR News predict that workplace burnout will rise next year.

Recognising and rewarding people as part of a broader engagement strategy is one way that businesses can make their staff feel happier, less lonely and more fulfilled as work normalises. In a survey by Perkbox of 1,532 UK employees, 42% said receiving greater recognition for their work would make them happier in 2021.

Starting a company wellness program will show your staff that you care about their wellbeing and recognise the value they bring to the organisation.

What are Rewards and Recognition?

Employee rewards and recognition is a scheme employers use to recognise the contribution people have played in the success of the business.

Inc defines a reward system as programmes “set up by a company to reward performance and motivate employees on individual and group levels”. The reward is often monetary and increasingly used by small businesses to “lure top employees in a competitive job market”.

Programmes that combine employee recognition with rewards provide more of a psychological, less tangible benefit, says Inc. Examples include events, spontaneous recognition like the privilege of a ‘duvet day’ or a more extended lunch break, and formal ‘Employee of the Month’ programmes.

How do Reward and Recognition Schemes Work?

Organisations with the best reward and recognition schemes have tailored them to the people in their business, including demographics. The scheme fits their organisational culture and values, with goals aligned to their growth strategy.

Here are just a few employee recognition programme types that companies provide:

Colleague thank yous – a mechanism that enables colleagues to nominate those who have performed at their best.

Social media recognitions – colleagues use apps to recognise people and display their achievements publicly.

Awards for living up to core values – programmes that recognise where people have lived up to the company’s values.

End of year awards – where the Chair or CEO rewards top performers, e.g. for customer service.

Long-service awards – fewer people are staying at companies for a long time, but these traditional awards are still a good way of rewarding long-serving staff.

The Benefits of Rewards and Recognition

Reward and recognition schemes tell employees that they are valued, motivating them to support the business and its values.

Here are six further benefits of employee rewards and recognition schemes:

  • Better staff retention

Schemes give employees a vested interest in remaining loyal to the business. It costs £12,000 to replace an employee in an SME, according to Accounts & Legal, so it’s worthwhile giving them a reason to stay.

  • Increased staff engagement

Employees will go the extra mile when the going gets tough – even when the gain is not monetary. A survey by McKinsey shows that organisations can “achieve a 55% improvement in engagement by addressing employees’ need for work recognition through nonfinancial means”.

  • Improved collaboration

They give staff an incentive to work together as a team to get things done, and the rest of the organisation benefits from such harmony.

  • Easier staff hiring

Social media recognition spreads the word that your company is worth working for, making it easier to attract new talent when the time comes.

  • Higher customer satisfaction

Happier employees will provide better customer satisfaction and make the business more productive, helping you to weather the difficult times.

  • Increased business productivity

After the pandemic, the Office for National Statistics predicts “large falls in output per worker”. A reward and recognition scheme that makes your employees happier and more engaged will make them more productive.

What Makes a Successful Reward and Recognition Programme?

Providing rewards and recognition does not have to be expensive or complicated, but it works best if it’s an inclusive part of an organisation’s culture, as these examples show.

The Institute of Internal Communication (IOIC) magazine Voice interviewed Selfridges’ head of internal communication Scott Lynch at the start of this year. He talked about the success of a ‘fun community’ where Selfridges people, not management, choose their own quarterly ‘surprise and delight’ moments, such as giving away free waffles and ice cream.

The idea not only engages staff and makes them happier, but it’s good PR, too. “Externally, you can see our team culture reflects our store experience,” said Lynch.

In India, Zubin Dubash, COO of entertainment company Semaroo, introduced an online Digital Mavericks Awards (DMA Awards) when he noticed employees putting in more hours during lockdown than before.

He told Free Press Journal he wanted the rewards and recognition programme to motivate the team and help them to stay engaged and connected. The games-and-entertainment based scheme celebrates top performance each month and enables staff to both give and receive awards.

According to Dubash: “The DMA has helped immensely in creating motivation and recognition in a challenging remote working set-up.”

How to Reward Employees in 2021

Fun and games may not be on everyone’s minds as we return to normality in 2021, but the outcome is clear. Companies that understand the importance of making employees feel valued through rewards and recognition reap the benefits of customer appreciation and loyalty and improved business productivity– and every business will need that in the stormy months ahead.

About Paul Freudenberg

Paul Freudenberg is a business productivity coach and consultant with a focus on operational excellence delivering improved profitability and business performance, and Founder of Awardaroo in 2005. Paul has set the mission of Awardaroo to help raise UK Business Productivity from one of the lowest in the G7 to one of the highest by 2030. Connect on LinkedIn


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