how to design a reward system for employees

Contrary to what higher-ups in the stereotypical company of the past believed, employees aren’t machines. They wear down and stop working efficiently if they’re not treated properly and inspired to do their best. In fact, even machines lose their ability to operate on a high level over time or when mishandled. To ensure employees continue to produce great work, you need to understand how to design a reward system for employees.

Trust us when we say, inspiring employees to love their work is easier said than done.

If you’re struggling to keep your employees inspired, motivated and happy, here are five tips:

“People who are given meaningful work are more likely to produce better output.”

1. Give Employees Meaningful Work
Remember back in grade school when substitute teachers would assign you “busy work” because the full-time teacher was out for the day? How many times were you thrilled to receive that work? Probably not often. The same concept applies to real-world employment situations.

In a study of 2,500 workers from Amazon’s Mechanical Turk, published in the Journal of Economic Behavior & Organization, researchers sought to analyze people’s engagement levels depending on the type of work they were asked to conduct. Researchers handed one group work that was “meaningless” and another work that was “meaningful.” Researchers found that, not surprisingly, those who were given meaningful work had higher production rates.

2. Work Should Be Considered Fun
It’s not surprising that intrinsically motivated individuals are more likely to associate their work with fun and personal happiness. In one study, published in Journal of Personality and Social Psychology, author Teresa Amabile gathered 72 members of the Harvard community to study the hypothesis that intrinsic motivation inspired employees to work harder, while extrinsic motivation caused the opposite. Prior to writing, Amabile had one group read off “play” reasons as to why someone would become a poet, like being able to express oneself and having the opportunity to experiment with words. She then had another group read extrinsic reasons to do the same, like money or fame. She found that those given “play” reasons were much more likely to write creative poems than the opposite group.

This study was developed back in 1985, so does its research hold the test of time? The answer is a resounding yes! In a new book, Primed to Perform: How to Build the Highest Performing Cultures Through the Science of Total Motivation,” Quickbase noted that authors Lindsay McGregor and Neel Doshi sought to finally support the notion that an enjoyable workplace culture was important by backing it up with numbers. What they found was that when employees like their work, they’re more likely to be inspired to learn and develop and that benefits the individual and their company.

3. Keep Communication Open and Transparent
Your workplace shouldn’t be silent, even if it’s full of cubicles. Offices are supposed to be living, breathing environments where people collaborate to spawn new, interesting ideas that further push the company forward. Employees who fail to regularly communicate (or worse, managers who don’t consistently talk with their employees) can’t make this happen.

HR professionals need to instruct managers at all levels that it’s crucial to keep the lines of communication open. They can do this by holding regular team or individual meetings and recognizing employees for great work.

That’s right – rewarding employees in the form of a formal rewards and recognition program is nonverbal communication that can instantly motivate them. In turn, this can inspire fellow co-workers, make for a more productive work environment and ultimately improve the company’s bottom line.

Happy employees are more productive and therefore more likely to help their companies succeed. Happy employees are more productive and more likely to stay longer at their current companies.

Ensure employees have plenty of chances to grow and develop, and they’ll be inspired to make that extra effort.

4. Prioritize Employee Learning and Development
If you’re not getting better at your job, there’s a good chance you’re getting worse at it, or at least falling behind the times. In a global study of over 2,800 employees, researcher Karie Willyerd and her colleagues found that 44 percent of high-performing employees wanted to take part in training programs. They also found that satisfying high performers was imperative because they were much more likely to leave a company quicker than lower-performing workers.

Make sure your workplace provides employees with plenty of chances to grow or train for new internal positions. After all, employees and in particular millennials are longing for the chance to learn and grow. They just need the opportunities to do so, and this is crucial when learning how to design a reward system for employees.

Further, falling back on the third point in this article, always communicate training opportunities with employees through group or one-on-one meetings, direct chat, emails, newsletters or face-to-face.

5. Do More than Just Saying “Good Job”
While saying “good job” is fine, it’s become ubiquitous and overused. To work even more effectively with your team and design a reward system for employees, you must go above and beyond and find new, sincere and specific ways to reward your employees for their dedication and hard work. One way you can do this is through a comprehensive rewards and recognition program. Along with saying “great job,” you can award high-performing employees with discounts on training opportunities or other perks that will make them happy.

Inspiring employees is not unattainable or fundamentally difficult, but it does take time to create an HR strategy that works for your specific company. The steps outlined in this article will help you build the foundation of a more inspired workforce.

Want to learn more about how to boost employee happiness? Download our free ebook, Employee Happiness 101. Or request a demo of Fond’s Perks and Rewards platform!