Employee Reward System 5 Factors for Deployment in 2023

1. Employee Reward System: 5 Factors for Deployment in 2023

2. Employee recognition and rewards are essential factors in assuring the success of a company. By implementing a reward system for employees, the company can ensure improved productivity and increased job satisfaction. Hence, it is essential to implement employee reward and recognition systems in organizations, irrespective of their size or complexity. • With the help of dedicated reward and recognition platforms, the company can also gather insights regarding the best performers and provide them with better value for helping them stay longer with the organization. • In this blog, we will be discussing the employee reward and recognition platform system, its types, components, and benefits, as well as understanding the various factors to consider while deploying it.

3. What is an Employee Reward System? • An employee reward system is a process deployed in organizations to motivate the staff to undertake their tasks better by recognizing their efforts and rewarding employees for their work. • A robust employee reward system provides multiple benefits for the company such as enhanced job satisfaction, improved retention, increased productivity, and profitability. However, employee reward systems are different from an incentive systems as incentives are usually provided for achieving a specific target and the associated reward is pre-set by the company. • Incentives are a part of the employee’s salary package, while rewards are presented to them for their excellent work. They are provided as extra motivation for them to perform their jobs well. • Rewards can be either of monetary value or non-monetary, with recognition being the most impactful form of non-monetary benefit. With the help of a robust employee reward system, companies can also understand their top performers and take additional efforts to ensure they are retained with the company for longer. • Reward systems can also provide HR and administration with additional information about the overall productivity of the company staff. It helps them plan for future job positions and make informed decisions related to staffing. • Reward systems also provide an overview of employee productivity and help them understand whether extra employee motivation is required in the form of team rewards such as team outings or team lunches.

4. Types of Employee Reward Systems • A major hurdle for companies in deploying a dedicated employee reward system is the initial cost of implementing it. However, the benefits associated with it can be minimised by providing the staff with non-monetary benefits. While it may seem counter-intuitive to the employee, non-monetary benefits such as public recognition, far outweigh the monetary value ones. • Based on the type of monetary reward the employee is presented with, we can categorize the employee reward system into monetary rewards, recognition, and additional benefits that cost money to the money, while not being direct monetary benefits for the employee:

5. 1. Monetary • Monetary rewards are the rewards which provide the employee with direct financial benefits such as bonuses, incentives, reimbursements, etc. Since salary is often the primary motivation to work in a company, providing monetary benefits such as additional bonuses proves to be quite effective in encouraging the staff to give their best to their service. • There are various options for the companies, when it comes to providing monetary benefits, such as: • ▸ Bonus • Bonuses are direct financial benefits provided to the employee in the form of cash for outperforming their team or accomplishing a specific goal. • They are often used as ‘incentives’ for specific roles such as sales and marketing, as their efforts have a direct impact on the business. • ▸ Variable Pay • Variable pay refers to the variable component in the salary package of an employee that enables the company to pay them according to their performance. • It can be awarded to an employee for their efforts in accomplishing a specific task or undertaking their duties methodically. • ▸ Profit-sharing • Profit-sharing refers to the practice of sharing a predetermined percentage of the profits generated by the company in a specific duration such as a fiscal year. • Profit-sharing is used as a long-term reward as it requires a combined effort from different departments. • ▸ Stock Options • Providing company stocks as a part of employee rewards is another excellent long-term strategy to ensure profitability. • Stock options are generally bestowed on upper and middle management to ensure they motivate the staff to work well.

6. 2. Recognition • Using the recognition system, an employee’s accomplishments can be shared with the company. It is a well-established fact that employees who are recognized for their work are more satisfied with their company and hence, stay longer with the organization. • While not necessary, you can present your employees with different kinds of accolades and awards to ensure that it makes an impact on their morale. • Employee reward and recognition at work is best given impromptu, and hence, you may even casually reward employees with verbal praise. You can also create an environment of mutual appreciation to enable the employees to appreciate each other for a job well done. • 3. Benefits • The additional benefits and perks provided by the company can also act as rewards to reward the outstanding performance, as the performers can be provided with an extra quota. Such rewards may not provide the employee with direct monetary benefits; however, it would provide them with a reward that they would appreciate. Some of the common examples include: • Office lunch party for the performing team • Option to leave work early for a specific period • Remote and flexible work options • Extra paid time off • Vouchers of famous brands

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