Many employees who choose to leave their job claim lack of appreciation as a major reason for leaving. Therefore, every organization should try to provide and encourage recognition as much as possible. But, the main problem is that each employee values different things, and they want to be rewarded in different ways. Fortunately, modern HR technology offers a solution in the form of points-based reward system. In this article, we get into three top benefits of a points-based reward system. But first, let’s briefly get into what a points-based reward system even is.
What is a points-based reward system?
A points-based reward system allow employees to manage their recognition experience by letting them select rewards that they actually desire. These systems are typically powered by easy-to-use software, enabling organizations to automatically award employees with points in exchange for a completed action. Employees can then redeem accumulated points for a wide variety of rewards found in the system’s built-in marketplace. For example, rewards include merchandise, experiences, and gift cards.
In sum, a points-based reward system allow employees to “purchase” something relevant that they would not normally spend their own money on. Instead, they can redeem accumulated points for something small or continue saving for something bigger. Therefore, every time they get rewarded, they’ll get the satisfaction of using points for something tangible that they desire. There are many types of employee rewards that you can offer. But, the top employee rewards to offer are monetary and non-monetary ones such as experiential rewards, additional time off, cash bonuses, and gift cards.
Top 3 benefits of a points-based reward system
When it comes to effective employee recognition, utilizing points-based reward systems are highly recommended for any company, regardless of their workforce size. There are many benefits of a points-based reward system — here are the top three:
1. Increases employee engagement
One of the top benefits of a points-based reward system is increased employee engagement. Because reward points have monetary value, employees feel good when they receive them. This gamifies the recognition process, improving engagement and keeping them happy, motivated, and productive. Regardless of if employees are working towards a deadline or a goal, recognition will offer employees a sense of accomplishment. So, they’ll work harder to earn and accumulate more points so that they can redeem higher value rewards of their choice.
2. Improves employee retention
By increasing employee engagement through points-based reward systems, this also helps retain employees. By offering generic and traditional rewards like branded company merchandise, you are destined to drive your employees away from your company. By offering employees rewards that they actually want, and will associate with your organization forever, you can transform the impact of your recognition program on employee retention. Therefore, making improved employee retention another one of the top benefits of a points-based reward system.
3. Promotes timely and regular recognition
Points-based reward systems makes frequent employee recognition truly effortless. This is because it helps you give regular recognition throughout the year for showing desired behaviours. Additionally, these systems help give timely recognition. In other words, it might not be very effective to recognize an employee for something they did months ago. This is because recognition is most effective when it immediately follows the behaviour you want to reinforce.
