TL;DR: Employee Rewards
- Employee rewards can enhance the benefits of recognition programs.
- Non-monetary rewards are better for engagement and belonging.
- Intrinsically motivating rewards foster purpose and pride.
- Extrinsically motivating rewards temporarily increase performance.
In this guide
- What are employee rewards?
- What's the difference between rewards and recognition?
- Why should you offer employee rewards?
- Types of employee rewards
- Why some employee rewards don't work
- When should you reward employees?
- Should you give employees rewards on holidays?
- Are gift cards a good employee reward?
- Case Study: How Ndustrial incorporates core values into employee rewards
- Creative employee reward ideas that aren't gift cards
- Intrinsic vs. extrinsic motivation: A shortcut to choosing rewards
- What HeyTaco's research says about employee rewards
- Recognition plus rewards: Why you need both
- Employee rewards FAQ
What are employee rewards?
Employee rewards are incentives or additional forms of recognition. They can also drive participation in recognition programs and tie recognition to a goal.
Rewards are a broad category that should be customized to an organization's unique objectives. Meaningful, recognition-linked rewards can:
- Strengthen the culture
- Boost morale
- Increase engagement
Monetary or automated rewards like bonuses and gift cards can:
- Temporarily boost performance or participation
- Recognize high performance
- Augment meaningful milestone recognition
All well-designed employee rewards have an impact on motivation. However, their true purpose is to spice up a successful recognition program.
What's the difference between rewards and recognition?
Rewards are something you add to a recognition program. You can have recognition without rewards, but rewards without recognition aren't all that effective.
| Employee Rewards 🏆 | Employee Recognition 🥰 |
|---|---|
| Aligns with the culture | Embedded into the culture |
| Happens on occasion | Happens every day, if possible |
| Structured and incremental | Shared liberally with everyone |
| Tangible goods and experiential events | Positive words and amazing vibes |
| Motivation-focused (but helps engagement) | Engagement-focused (but helps motivation) |
Why should you offer employee rewards?
Some teams that use HeyTaco don't offer rewards because they don't need them. Maybe you think you don't, either. However, here's why they're worth it for many other workplaces.
Improved engagement and retention.
Adding rewards can make a recognition program more dynamic and exciting, especially when you rotate different incentives in and out of the lineup.
Rewards can also offer employees more of what they need to feel valued in the workplace. The chance to attain more flexibility, professional development, or autonomy—whatever you can personalize to strengthen that connection.
Another way to reinforce values and behaviors.
Tangible goods or experiences can make some achievements or milestones more memorable.
When given for performance, rewards can create a larger, more immediate sense of pride. Feeling ownership over our wins can have a bigger impact on repeating the behavior and meeting (or exceeding) expectations.
Helps managers and peers show appreciation consistently.
Including rewards can increase participation in recognition programs. They're extra encouragement to give recognition freely, making the journey to a reward feel fulfilling and engaging.
Rewards are blended into the system and feel like a natural feature of the recognition landscape.
😳 88k reward redemptions and counting. Thousands of global teams include rewards in their HeyTaco Taco Shop. See the most popular employee rewards and get tips for building your own meaningful rewards program.
Types of employee rewards
If you're going to offer rewards for a range of reasons, they have to meet the occasion. That's why you need different types of rewards in your lineup.
Monetary rewards
Monetary rewards include cash bonuses and gift cards. Higher-end rewards include stock options and profit sharing. It looks like a small category, but there's incredible diversity here. A $25 Uber Eats gift card and stock options for a veteran employee coexist in this category.
Non-monetary rewards
Your most meaningful, high-impact rewards will be non-monetary. This category is jam-packed with perks employees want more than anything else (aside from a paycheck). Extra time off, flexibility, and sincere praise live here.
💸 Which is better for you, monetary or non-monetary? Take a closer look at the pros and cons and get examples for all companies of all sizes and industries. It's in our full comparison of monetary vs. non-monetary rewards.
Experiential rewards
Experiences are mentally and emotionally stickier than gift cards. Incorporate rewards like team outings, learning and development opportunities, or special events. Other options include a day spent volunteering or even a wellness retreat.
Tangible rewards
Tangible rewards are physical gifts of all sizes and prices. They're simple, easy to understand, and have an immediate impact. Care packages, company swag, tech gadgets, and other goods belong here.
🥣 Mix it up. If you're going to offer rewards consistently, a mix of tangible and experiential is best. Learn the respective benefits and get plenty of examples with our breakdown of tangible and experiential rewards.
Why some employee rewards don't work
When rewards don't amplify the benefits of recognition, this is typically why.
Overemphasizing monetary rewards.
Adding in more non-monetary rewards is best for personalization. They won't de-center the good feelings recognition gives in favor of cash-based transactions.
Inconsistency or favoritism.
The why and how of rewards must be comprehensible to everyone. Some programs inadvertently end up only rewarding the highest performers or most visible team members. This does not create a culture of appreciation or foster engagement.
Making rewards too complex to redeem.
Crazy high redemption thresholds, confusing conversion rates, and markups on items employees know cost less elsewhere. Rewards need to seem attainable and valuable, always.
Not aligning with company values.
Rewards should be customized to fit the culture and values employees are familiar with. Development, flexibility, and team celebrations are logically associated with values like growth, autonomy, and collaboration.
There's no employee input.
Sounds too obvious, but rewards have to be something employees want. Don't copy someone else's rewards lineup or let a corporate gifting site decide. It's always better to ask what they want, let them alter current reward ideas, or give them choices.
👨🏽 🏫There's a solution for every problem. Get deeper explanations and find out how to fix employee reward ideas that aren't working out.
When should you reward employees?
Employee rewards are occasional, but never random. Most rewards come as a result of meeting a goal or hitting a milestone. Think project completion and work anniversaries. They can also be given to individuals and teams who have gone above and beyond, made impressive improvements, or championed core values.
Many others offer rewards as an intermittent perk of consistent recognition. It's strongly recommended that companies not introduce rewards until a recognition program has been successfully up and running for a few months.
🔑 Timing is key. Rewards as a perk of recognition participation have to feel like a natural extension of the culture, not purely an incentive. Find the exact right time to introduce rewards into existing recognition efforts.
Should you give employees rewards on holidays?
No, you shouldn't reward employees on holidays, but you can give them gifts! Rewards are conditional. Holiday gifts are not. The middle ground—a holiday gift that could also be considered a reward—is the goodies we may give on Employee Appreciation Day.
As for holidays celebrated outside of the workplace, consider festive activities and parties. Food, swag, and subscriptions are still great holiday gifts for employees, too.
Are gift cards a good employee reward?
Yes, and they remain one of the most popular. People like receiving them, and they're easy for organizations to distribute. However, using them to enhance recognition and improve engagement requires a bit more thought.
- Pair gift cards with meaningful recognition, like a handwritten note or non-monetary perk.
- Use them on occasion as an addition to milestone celebrations. Gift cards are better as a "cherry on top" and not as the purpose of a recognition program.
- Make it redeemable for something they'd enjoy. If it's just a spend-anywhere cash card, they may feel like they have to spend it on bills or other responsibilities.
🎁 Make gift cards feel like a gift. Rewards like this must be distinct from compensation. Learn more about the pros, cons, and alternatives to gift cards.
How Ndustrial incorporates core values into employee rewards
Energy waste reduction firm Ndustrial uses HeyTaco to build connections on its remote team. They share virtual tacos with one another, attaching positive feedback related to the company's values.
Twenty-five tacos nets you a $25 gift card, but they've made it more meaningful by linking that to their values, too. Ndustrial partners with Karma Wallet to incentivize environmentally conscious choices. It reinforces the importance of what really matters every step of the program.
Employees even have the option to donate the monetary value of their virtual tacos to a tree-planting program.
Not bad for a team that initially thought "the taco thing" was silly.
Creative employee reward ideas that aren't gift cards
Already offering gift cards? Here are some ideas to mix in that feel valuable without becoming too transactional.
1. Adventure/vacation fund contributions.
Machu Picchu or Michigan? The ultimate destination for this experiential reward is up to them. Travel savings benefits help employees use the time off they've earned to the maximum.
2. An afternoon off.
All forms of recognition work best when they happen right away. Many rewards are the same. Giving someone a few hours of me-time is the perfect surprise reward for extra positive reinforcement on the spot.
3. Personalized care packages for remote employees.
Remote employees are subjected to standard gift cards more than any other type of worker. If you want to go the extra mile in forging a more meaningful connection, send physical, thoughtful rewards.
4. Manager for a day.
If someone has done a great job leading a project, let them fill their manager's shoes for a day. They'll have the opportunity to demonstrate their leadership skills and gain insight into what it will take to develop them.
5. Food truck visit.
Food is one of the most in-demand redemptions in many HeyTaco rewards centers. Make a real taco truck a collaborative reward for project completion or teamwide recognition participation.
6. Commuter perks.
Oil changes, ridesharing stipends, auto detailing, and parking reimbursement. These are underrated perks for in-person teams that fit like a glove inside of a total rewards strategy.
7. More remote hours.
Hybrid work arrangements are most popular among employees with a choice. What varies is the amount of time they'd like to be at home versus in the office. Letting employees have that extra day to work from home if they want.
8. New headshots.
Hire a top-rated photographer to update a winning employee or team's business headshots. Remote employees will appreciate this too; just research photographers in their local area.
🌎 Something for everyone. Rewards are extra effective when they feel personal. Get enough ideas for every individual with the full list of 35 employee rewards.
Low-cost tangible reward ideas (remote and budget-friendly)
What if you want rewards to resemble gifts? A tangible reward can stand out more when delivered with genuine praise. Here are some ideas for physical rewards that help build connection without costing a fortune.
1. Stationery and supplies.
Monogrammed leather journal covers, planners, and fountain pens are all resurging in popularity. It's a very meaningful gift for someone who embodies company values or never fails to recognize their peers.
2. Streaming and app subscriptions.
Personalize a gift card by making it a subscription that the employee will actually use right away. Premium music streaming, mindfulness apps, and movie streaming services all offer gift subscriptions.
3. Device accessories.
A great alternative for those employees who prefer screens over journals and stationery. Choose from Bluetooth speakers, wireless chargers, headphones, and phone or tablet cases.
4. Cozy socks or house shoes.
Company swag is also a popular reward we see redeemed in Taco Shops. Offer more of this for remote teams without massive spending on fleece jackets and trendy thermoses. People working from home can feel part of a community in complete comfort.
5. Games, puzzles, or crafting kits.
For the employee who's always inspecting a crossword or knitting a beanie during break. Any gestures that involve leisure or recreation can feel like more of a reward. They're more obviously removed from the recipient's compensation.
🪄 We always have more up our sleeve. Get more ideas plus tips for giving out high-impact rewards with our guide to inexpensive appreciation.
Intrinsic vs. extrinsic motivation: A shortcut to choosing rewards
You have employee reward ideas. You know on what occasions you want to distribute rewards. Now one must merge these in a way that makes sense and has the intended effect on both employer and employee.
The easy way to do this is to identify whether the reward idea in question is intrinsically or extrinsically motivating. In many cases, they will be both. Knowing the difference means you can tell what the dominant force is.
What is intrinsic motivation?
Intrinsic motivation comes from within. Passion, joy, curiosity, personal growth, purpose, and pride influence behavior.
Intrinsically motivating rewards primarily encourage feelings of belonging, being seen, and being genuinely appreciated. They inspire longer-term motivation and performance as a natural result of higher engagement.
Peer recognition leverages intrinsic motivation to become an everyday occurrence. As far as rewards go, everything having to do with growth, flexibility, and great detail in personalization fits.
What is extrinsic motivation?
Extrinsic motivation is when we perform a behavior to achieve an external result. Money, privileges, and prizes are the reasons employees engage.
The headline with extrinsically motivating rewards is monetary value. These rewards are very good for meeting goals on time (or faster) because they boost performance, but only in the short term. This is why we must use them more rarely and pay extra attention to making them meaningful.
The vacation contribution fund is a prime example of a high-value, extrinsically motivating reward done right. The employee gets money toward an experience that's personal and memorable.
🙌 Making meaning and chasing goals at once. We have more to say about using both extrinsic and intrinsic motivation in employee rewards.
What HeyTaco's research says about employee rewards
Recently, HeyTaco partnered with experienced researchers to answer specific questions about what makes a reward effective.
Some relevant findings:
- Rewards increase employee engagement. Teams that include rewards have 80% higher participation in recognition programs.
- Monetary value truly isn't that important. Cultural alignment and personalization determine how valuable a reward feels.
- Intrinsic rewards feel fairer and more equitable. Monetary, performance-driven rewards feel less attainable and transparent.
👩🏻🔬 There's science behind worthwhile employee rewards. See how research can help you design the best employee rewards for your team. Plus, download the white paper to learn even more about rewards that work.
Recognition plus rewards: Why you need both
Some companies think they don't use rewards, but technically do as "extra special recognition." That's how well the two work together when done right.
They can make celebrating milestones and performance feel more special.
When might sincere appreciation not feel like enough? A reward is like an enhancement or booster pack that differentiates an achievement from everyday recognition.
Sudden rewards make change feel positive.
It's a good thing when recognition feels normal. Rewards can make a statement and get everyone's attention when we need to increase the presence of a core value or make changes to the culture.
Rewards are another way to personalize recognition.
Employees want to feel seen and valued as humans. The right rewards can carry as much meaning as some forms of recognition.
Recognition + rewards = 💛. Do you know what occasions are best for introducing rewards for the first time? The answer is among our helpful tips for using recognition and rewards together.
Daily recognition, meaningful employee rewards
Adding employee rewards to a successful recognition program shouldn't be a burden for HR and People Leaders to shoulder solo. The secret to motivating rewards and engaging recognition lies with employees themselves. They help define the culture that resonates with them.
When everyone has a say (not just managers), there's a stronger chance that everyone gets what they need at work. Using the right tools and software ensures that recognition happens every day, and can automate the stickier parts of reward redemption.
Learn more about how meaningful symbols like a 🌮 translate to meaningful rewards, and start your free trial of HeyTaco.
Frequently Asked Questions
What is an employee rewards program?
An employee rewards program is a complement to a recognition program. The purpose of adding rewards is to reinforce the elevated engagement and morale that recognition can provide. Rewards can also increase motivation for a stronger culture or higher performance, depending on the prize.
How do employee rewards differ from recognition?
Employee rewards are intermittent prizes or special considerations distributed based on specific factors. Events such as hitting a project milestone, meeting a quarterly goal, or going above and beyond. Recognition, on the other hand, is given much more freely and frequently. It usually costs nothing and acknowledges the smallest of wins.
What are examples of low-cost employee rewards?
Job flexibility, small tangible goods, and activities are some of the most popular low-cost employee rewards. Offer employees an extra day of remote work or let the crew take the afternoon to play some games (they're great for team-building, too).
Do employee rewards really improve motivation?
Yes, although the type of reward motivates employees in different ways. Non-monetary rewards like job flexibility and professional development can be more likely to increase intrinsic motivation. Intrinsic motivation has longer-lasting effects and is associated with higher levels of engagement and feelings of belonging. Monetary rewards like bonuses are extrinsically motivating. They motivate employees to increase performance in bursts but don't have the same emotional impact as intrinsic rewards do.
How often should employees receive rewards?
For those who want to add rewards to a recognition program, consider the 80/20 rule. That's 80% recognition and 20% rewards. If recognition is being utilized effectively and employees can say they receive recognition weekly, they can expect some sort of reward every four to five weeks. Aim to make the majority of employee rewards non-monetary and tailored to the culture.