Ways to Reward Your Employees

In every business, higher goals can be achieved when employees are motivated to perform their jobs excellently.

Retail employees, for example, have direct contact with customers. The impression a customer has after making purchases or doing other transactions will depend on how well they have been assisted by your employees.

Many companies have realised the importance of keeping employees motivated to ensure they can build a strong and productive team made up of employees who are happy with their jobs and willing to stay in the company.

It is best to avoid a high rate of employee churn which many organisations are plagued with. This is the rate at which employees leave the company, new staff will be employed to fill vacant positions, but you will pay more unavoidable costs to train new employees and while investing on the gestation period of the new employee till the time he / she becomes fully productive in the job. Research says that the loss incurred by the company upon 1 employee churn is approximately the CTC of the employee leaving.

In this post, I will be writing about some effective ways to reward your employees. If deloployed in the right ways, you can not only expect a reduced rate of employee churn but also expect to observe a gradual growth of your business and brand.

Types of reward systems for employees

There are various types of employee rewards. Here are a few types:

1) Company-wide rewards

2) Team sports competition

3) Rewards or Prizes to winners after a team sporting or gaming competition.

4) Peer to Peer appreciation

5) Public recognition rewards for good performance

6) Team outings or outdoor activities

Ideas of rewarding employees

Below are some ideas for rewarding employees.

Company wide rewards

Offering discounts on your company’s products - This can work well in consumer goods retail or manufacturing companies, and can be employed as a company-wide reward system where the reward is not conditioned on the performance of the employee. This reward policy has the potential to build brand awareness amongst the employees and their neighbourhood, families and friends - because there could be a high chance the employee may buy the products at a discounted rate for gifting to friends or a family members.

Birthday based Rewards - When the number of employees in a business unit is less than 30 (for example), and that business unit has a separate operating space, then having a cake cutting ceremony can make the employee feel rewarded and quite happy. However, when the number of employees is large and birthdays become almost an everyday affair then cake cutting ceremonies may become too distracting. In that case a practical approach could be to send out birthday wishes over the employee’s work-email id or keeping a birthday card possibly with some shopping coupon on the employee’s desk can be a pleasant surprise for the employees.

Team sports competition

Team sporting competition - Organising outdoor team sports competitions like football, basket ball, cricket and base ball competitions at least once a year can have a massive impact on employees’ morale and has the potential to reduce stress amongst the employees.

Prizes to winners after a team sporting or gaming competition

Free Tickets - You can offer free tickets for the winning and runners up teams for watching movies, attending sporting events or movie concerts together. This will surely build a kind of friendship amongst the winning team and is likely to affect work place dynamics positively.

Peer to peer appreciation

Handwritten note of appreciation - A genuine appreciation note and refreshing flowers will put a smile on the face of your employees. Typically the HR or manager in charge would need to arrange for the cards and flowers and this is likely to work well if conducted as a special event rather than keeping the cards and flowers always available in some corner of the office.

Peer-to-Peer mentions - Special mention from a colleague during a team meeting for small accomplishments or acts of kindness can go a long way in keeping the employees happy and motivated and feel rewarded at work place.

Public recognition rewards

Public recognition rewards - commending hard-working employees is effective; you can also set up a board at the entrance where the pictures of deserving employees are displayed until the next evaluation period.

As mentioned in the cons, there may be low esteem in employees who failed to meet the required standards or who feel they were not honoured for their hard work that the have put in. This specially happens in case of individual rewards and when the rewards are made public, for example in the case of public recognition rewards the rewards are inevitably public, so public rewards must be kept for really exceptional contributions made that have had a demonstrable effect on the business.

Now, its also very likely that public rewards would increase the competition amongst the staff. Sometimes, completion is good, but quite often it may lead to politics in work place.

A good way to control the damage in a preventive way could be by using a employee voting mechanism for electing their colleagues for public recognition rewards. Keeping some weight for the management’s score and some weight for vote counts of the employees is also a mechanism that can be explored (management may have more maturity to understand the impact on business). For example 50% 50% weights can be employed in deciding the winners of the public recognition reward.

Inspite of all the precautionary measures taken while floating public rewards , it may be likely that some employees are still left unmotivated after a recent rewards event. During such times, the best person who can control the damage is the manager managing the employees. Having a 1-on-1 lunch or coffee with them, asking “how are you, or how are things at home” may potential help them open up and it is likely that they return back on track in terms of focus and motivation after getting the needed attention from the manager.

Team outings and outdoor activities

Team outings and outdoor activities - Nothing can beat team outings and outdoor activities. This is surely going to boost the employees’ creativity and happiness and also reduce stress that could have been piling up at work.

The fun part is that it feels great to show appreciation to your employees. However, there are some pros and cons you should consider thinking about:

Pros and Cons of employee rewards system


1) Low employee churn rate.

2) Higher productivity in the workplace.

3) Increase in sales and quality of work.

4) Increase in customer loyalty and reduced customer chrun.


Cons 1) and 2) are likely to happen if the rewards are not kept secret or in case of public recognition rewards.

1) Unhealthy competition - Competition can sometimes lead to politics.

2) Low esteem - There may be low esteem in employees who fail to meet required standards.

3) Work quality and company-wide employee focus can suffer if too many employee fun activities are conducted.

Final Thoughts

Overall, your company can gain immensely by incorporating a healthy reward system for the employees. Even if the cost incurred for incorporating employee rewards in the company is somewhat more than the cost that could be saved from reduced employee churn, having a good and wholesome employee rewards system could potentially be a very impactful and welcoming idea in the company. The good and positive vibes are likely to flow from your employees to your customers and vendors, which eventually may have a gradual and long lasting impact on your company’s growth.