When it comes to the set up and implementation of a rewards or loyalty program, a fundamental element of the process will address the rewards themselves and the form they should take. This generally comes down to two options – tangible rewards or cash.
To make the decision that best suits your business you need to consider how each would fit your campaign or project. Our agency’s approach is to identify the best-fit solution for each individual company, although in our experience tangible rewards are nearly always the preferred option.
These take the form of various products or services. It might be an electronic device or one-day getaway, a gift card or even a gym membership, which all have a monetary value that the recipient will perceive.
Of course, the value doesn’t have to be financial, not all individuals would associate a bottle of expensive champagne with a financial cost. For some, the value is the feeling or emotional reaction to being rewarded. With this in mind, it is important that the reward offered is in-line with the amount of work and achievement of your employee. Otherwise the reward could be perceived as meaningless.
Why choose tangible rewards?
The perceived value of rewards is crucial, as a more inexpensive item could appear to be costly or generate an emotional response and therefore be considered valuable. It’s all about the impact that a reward has and a careful selection process can make budgets stretch much further.
In addition, if a physical item is offered as a goal to work towards then employee engagement can see dramatic improvements. Employees with a fixed objective and clear direction tend to be much more engaged and driven to succeed. And on top of all this, tangible rewards allow much greater flexibility.
It provides a choice, so you could offer a wide range of rewards so be sure that you’ve addressed everyone’s taste, or if you really know your employees then you could select a more customized set of products that really deliver a reward that they will truly appreciate.
Cash rewards still have their place within staff recognition strategies, particularly in tougher times when people are more strapped financially. Cash is an ideal prize for a ‘quick win’ scenario. This might be done to immediately acknowledge individual moments of excellence rather than waiting for a scheduled reward within an ongoing scheme.
Cash does allow the recipient absolute flexibility when it comes to spending their prize, but a significant drawback is that it will be quickly forgotten about, so it doesn’t have the same positive impact as a tangible reward and isn’t well-suited to an ongoing recognition program.
When deciding what is best for your business, it’s important to start with why you are choosing to reward your staff. If your objective is fast results over a short time period, then cash will get attention and generate short-term engagement. The key drawback to this approach is that the engagement will not last, so the financial value of rewards is more relevant in this instance to gain maximum return.
If cash isn’t quite right then you could choose the gift card option, which means they can choose their own products without the money simply disappearing into a bank account and getting lost in day-to-day expenditure.
For the long haul though, tangible rewards offer the best option to optimize employee engagement on an ongoing basis. There are many options available that can be aligned with staff and internal processes. If employees can win a reward simply by doing their job and doing it well, then they will naturally strive to win it.
In summary, there are four key points to address when choosing rewards:
- Why am I rewarding?
- Who am I rewarding?
- What is the timescale?
- What is mybudget?
These simple guidelines will allow you to identify your audience, establish why you should be rewarding them and how much you can afford to spend on doing so.