How an employee reward system can impact your company

employee reward system

The success of any company is hugely dependent on how employees are performing their duties. It is because the clients make their first impression about the company and decide to use your services based on their communication with your employees. The insufficient performance caused by low job satisfaction levels also affect the business development metrics like revenue and sales. That is why there are HR departments and People Ops in every company whose main role is to keep employees engaged.

Creating an employee reward program is one of the ways to increase motivation and contribute to business growth. Here’s why:

Teamwork improvements

Effective collaboration between team members is the ultimate aim, as combined effort brings better outcomes. Rewards for the collective results increase the productivity of individual members, as well as teamwork because people feel united by the same goal. It can be practically anything starting from increasing the number of sales, closing the project earlier than estimated to bringing X new customers on board.

Boost of motivation

Rewards act as a carrot from the “carrot-and-stick” approach. It was proven a long time ago that positive motivation works much better than avoiding the threat of being punished. Moreover, knowing that the efforts will be praised keep the energy and engagement during the process on a high level. Also, if you support the desired behavior, there are higher chances of its reoccurrence.

Note: Rewards should not be viewed as a replacement for the regular salary review. It’s an occasional bonus for exceeding expectations.

Positive impact on customers

Employees from companies with regular reward practices are more satisfied with their jobs. If your personnel are happy, it will be reflected in the communication with the external clients, the number of extra miles will increase, and the client experience will be much better.  In environments where people are not satisfied with their job even if everything seems to be fine and polite at first sight, customers feel something is off.

Loyalty increase

Seeing that achievement is decently rewarded, employees feel appreciated and valued because they see that managers notice their extra efforts. This increases trust and relationships between managers and their subordinates and consequently has a positive impact on the retention rates. 79% of employees report that the recognition awards positively impact their loyalty. Thus, the attrition level is significantly lower in companies where employees are loyal to their employers.


Small companies and emerging startups may not always have an additional budget to spend for this initiative, but rewards don’t necessarily need to be monetary. It’s possible to start with extra time off, educational and training courses, extra time for employee’s personal projects, or other small things. Everything counts.

Note that in order for the system to work, the list of rewards should be based on the needs of your employees, and the process of receiving them – transparent and understandable.

For sure the reward system is not a silver bullet, and it won’t help if the main employee satisfaction factors such as transparency, competent management, and decent salaries are absent. However, it’s a powerful motivational tool to increase productivity, create healthy competition, and make your workers happy.

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1 Comment

  1. Good article.


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