Why Employee Performance Rewards Matter and How to Choose the Right Incentives

Why Employee Performance Rewards Matter and How to Choose the Right Incentives

We all like to be appreciated for our hard work. Whether it’s a simple “thank you” or a formal recognition, being recognized for a job well done can motivate you or your team to keep performing at the same level. An employee reward scheme can boost retention, improve employee satisfaction, and deliver higher productivity levels. 

Corporate travel is one incentive to encourage employee performance. Roundtrip will radically simplify the planning process by automating travel plans and curating corporate travel options that work for your budget. 

This blog article explores why employee recognition is important and how to select the right incentives. We’re offering practical tips on choosing the best incentives to create a positive workplace to smash your short and long-term goals. 

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Why rewarding employees for their performance is important

Research by Deloitte found that companies recognizing employee performance are 12 times more likely to have positive business outcomes. This research also found that employees prefer recognition delivered privately or shared with only a few people. It reflects our psychological need for validation and appreciation. 

Rewarding employees for their performance offers them validation and gives their work a sense of meaning.

It positively impacts your working environment, helping employees feel like they belong. The impact of a reward system on employee performance can be felt within every corner of your organization.

Increases employee retention

The corporate world is still recovering from the great resignation” of 2021 when over 47 million Americans voluntarily quit their jobs. It’s a trend seen globally and continued to the summer of 2023.

While it’s been linked to the pandemic, the great resignation was the continuation of a decade-long trend with employees reconsidering the value of their work and how they were being treated. Almost 70% of HR managers recognize the role of employee performance rewards in increasing long-term retention. Boosting employee retention rates reduces hiring costs and maximizes productivity. 

Boosting employee retention rates reduces hiring costs and maximizes productivity. 
Photo: Andrii Yalanskyi/ Shutterstock.com

Improves employee morale

We all like to get a pat on the back and a “thank you” for a job well done. It reflects our psychological need for validation and appreciation, as was stated earlier. 

Performance incentives help cultivate a positive attitude towards work amongst your employees by encouraging them to take pride in their accomplishments.

It can help prevent burnout and improve employee engagement. 

Encourages healthy competition

A little competition can be just what your employees need to push themselves the extra mile. When they compete with their peers or other departments, employees will continue to work to boost their performance and productivity. 

You can fester this competitive streak into something positive by offering a tangible reward for hitting performance milestones. Competition promotes innovation and creativity while encouraging collaboration and knowledge sharing.

Fostering a spirit of healthy competition, companies unlock a dynamic of innovation and collaboration, driving employees to excel and celebrate shared success.
Photo: Ivanko80/ Shutterstock.com

Enhance productivity level

Productivity and recognition go hand-in-hand. The best way to keep your employees motivated is by recognizing their achievements and making them feel supported.

Over 80% of employees consider recognition as a vital part of their well-being and happiness at work.

Recognition through employee reward schemes enhances productivity levels by encouraging employees to take pride in their work and accomplishments. 

How to select the right incentives to drive employee performance

Deloitte’s research found that cash isn’t king when recognizing employee performance. New growth opportunities were identified as the preferred incentive across age groups and industries. The right incentives will positively change employee behavior and boost motivation levels. 

Your company should consider individual employee preferences and how it can implement its reward program.

“Deloitte’s” insights reveal a shift beyond monetary rewards, advocating for tailored incentives that resonate with diverse employee aspirations, thereby transforming motivation and performance.
Photo: Panchenko Vladimir/ Shutterstock.com

Matching rewards to performance

Incentives should be closely tied to performance goals, such as sales targets and meeting short-term KPIs. The right incentives will encourage employees to go the extra mile to meet these targets. 

The employee performance rewards you choose should recognize the effort and work required to achieve them. Smaller achievements can be acknowledged with gift cards or mentoring sessions, while large-scale achievements can unlock incentives like individual travel and conference opportunities. 

Roundtrip helps corporate travel managers, finance teams, and employees streamline the booking process by automating travel plans while staying on budget.

Unlock stress-free corporate travel with Roundtrip

Roundtrip is designed to take the stress out of corporate travel planning. Whether it’s last-minute flight changes or finding the right hotel for your budget, Roundtrip streamlines each step of the planning process. 

Our user-friendly tools make it easy for your employees to book travel independently with reduced special rates and travel policies. Reward your employees for achieving their performance targets by using Roundtrip to book your next corporate retreat.

Personalized and specific incentives

Not every incentive will be attractive to your employees. Offering to upgrade office equipment might fall on deaf ears if you have employees who use their own equipment or run only basic software. Specifying the incentive sets the right expectations for your employees.

Collaborate with managers and employees to establish what will motivate them most. Involve your employees in the decision-making process before establishing your employee performance reward.

Amid a kaleidoscope of ideas, a collaborative brainstorming session unfolds, as employees and managers chart out bespoke incentive pathways to enhance performance and reward.
Photo: fizkes/ Shutterstock.com

Reflect on your company culture

The incentives and employee rewards you choose should reflect the company culture you’re establishing.

Offering remote work promotes the image of a forward-thinking company that prioritizes work/life balance. 

Incentives like individual travel and professional development encourage personal growth. Commission-based bonuses and cash rewards are great incentives for companies seeking to meet their sales targets.

Group and individual employee rewards

Your employee rewards scheme should include incentives aimed at both individuals and groups to maximize performance and recognize collaborative efforts. 

Team incentives can encourage departments to work more collectively to achieve KPIs, while individual incentives motivate employees personally and as part of their department. Upgrading office equipment and hosting company events are great incentives for departmental and group recognition. 

Your employee rewards scheme should include incentives aimed at both individuals and groups to maximize performance and recognize collaborative efforts. 
Photo: Nattakorn_Maneerat/ Shutterstock.com

Performance incentives you can offer employees

Offering a range of incentives enables your organization to tailor rewards to motivate individual employees and teams. Your reward system should recognize the range of incentives that will be attractive to your employees, from development opportunities to at-work benefits and one-off rewards. 

You should choose incentives that reflect the company culture you want to develop.

Create a tangible reward system that makes your employees feel valued and encourages them to continue their careers within your organization.

Remote work and extra time off

Non-cash incentives are often the most attractive for employees, especially for those with young families or who want added flexibility. You can offer remote working, flexible working hours, and additional time off as an incentive for employees striving for a better work/life balance. 

An employee reward scheme can help transition your company to a more remote or hybrid set-up. It builds trust with employees and establishes a standard of performance before being rewarded with extra flexibility. 

In the comfort of home, an employee and her feline companion embrace the serene flexibility that remote work incentives bring to work and life balance.
Photo: Olezzo / Shutterstock.com

Sponsor travel opportunities

You can recognize your best talent by sponsoring travel opportunities. Data from the Incentive Research Foundation found that individual travel was a top incentive for employees. Potential employee performance rewards include attending international conferences or paid vacation to a tropical destination. 

Roundtrip streamlines the corporate booking process, keeping your records in order with individual employee profiles that are automated to manage travel bookings efficiently.

You can use Roundtrip to book hotels, airline tickets, and transfers using whatever payment method works for your organization.

Recognition schemes

SMEs and scaling companies can implement employee performance rewards without spending additional capital. Recognition is at the heart of these incentives, and such reward schemes reinforce a positive work culture, encouraging high performance.

An “Employee of the month” scheme will highlight exceptional talent within your team, providing public recognition of their work. One of the most impactful rewards is a handwritten note or personalized message from senior leadership recognizing the employee’s achievement. 

An “Employee of the month” scheme will highlight exceptional talent within your team, providing public recognition of their work.
Photo: Olivier Le Moal/ Shutterstock.com

Professional development

Continued professional development (CPD) is one of the top priorities for employees in highly competitive industries. The focus on life-long learning has promoted a shift to retraining and taking part in regular professional development courses to help climb the career ladder. 

Companies that offer training as a reward incentive see a 30-50% increase in employee retention, encouraging them to continue their career at your organization.

Monetary rewards

Almost 60% of employees have said they would choose performance recognition with monetary rewards. These incentives can be broken down into performance-based bonuses, commission structures, profit sharing, and salary increases. 

Tangible benefits can be tailored to the goals of your company and how you operate. Commission-based rewards are an ideal incentive for recognizing employees who meet or exceed their sales targets.

Almost 60% of employees have said they would choose performance recognition with monetary rewards. These incentives can be broken down into performance-based bonuses, commission structures, profit sharing, and salary increases.
Photo: Asada Nami/ Shutterstock.com

Gift cards

Your employee recognition scheme should include incentives that are easier to achieve regularly.

Gift cards are an ideal way to recognize short-term performance without the higher price tag of travel rewards or training programs. 

Team building activities

Group incentives should recognize departmental achievements and encourage collaboration between employees. Offering team building activities as a performance reward is a win-win, recognizing achievements and providing opportunities to strengthen relationships and promote team building. 

United in spirit and purpose, team locks hands in a jubilant testament to the power of group incentives that weave individual strengths into a tapestry of collaborative success.
Photo: Roman Samborskyi/ Shutterstock.com

You can plan off-site retreats and group trips with the help of Roundtrip with 24/7 support and easy-to-use tools to manage bookings and expenses efficiently.

Book now

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