The choice between monetary and non-monetary employee recognition and reward

Whether employee rewards and recognition is a new concept for your business, or you’ve had a program running for years, you’ll most likely ask yourself what level of reward budget – if any – is necessary to have a positive impact on employee engagement, and whether that investment is worth it for your business.

People sometimes think that they need to include rewards to have an impact, but our research shows that 34% of employees wish for more verbal praise as a means to feel recognized (Reward Gateway | Edenred, 2024), so there is a place for non-monetary, genuine recognition. However, in that same study, 45% of employees wanted more tangible rewards (bonuses, etc.) to feel recognized. So the truth is you need variety to really make recognition work - your employees will want both non-financial recognition and financial reward

What message does it give your employees if they aren’t able to participate and share in the fiscal success of your business?

Start with the stories – connect effort to impact

For businesses that have little to no budget, the best thing about peer-to-peer employee recognition is that you can send as many as you want without impacting costs. Anyone can recognize a team member for a job well done, at no additional charge to the business. Taking time to tell the story of how employees support each other and business results builds a spirit of generosity of gratitude and helps reinforce your company purpose, mission and values. Take for example, our client Suncorp, whose employees send 76,000 eCards a year! By making it easy for their employees to say thank you, staff recognition is now a critical part of the employee experience. Giving your people the tools and space to say thank you more frequently is the first step towards creating a culture where recognition is free flowing and allows the genuine spirit of collaboration and gratitude to be felt by all.

Recognition allows you to provide a personal, meaningful touchpoint, so that an individual can see what their unique contribution has to the business. One of the most memorable moments of recognition I’ve received came from our former head of Marketing. During a week when I was working long hours preparing for multiple presentations, he sent me a simple, but effective message that let me know he saw how hard I was working and that my efforts would truly allow presentation attendees to make their worlds better places to work. I went from feeling overwhelmed to privileged to be able to deliver on our mission and support others, and I know my preparation really kicked into gear. It was a great move, especially since he had assigned me to do most of those presentations.

Connect people by collecting recognition moments

I always talk about how these moments of recognition are stories that organizations can collect and use to connect people to the purpose and values of the organization. If you’re struggling to communicate these things in your business (as I’m sure many people are), one of the fastest and best ways to get purpose, mission and values to stick and to drive engagement while you’re doing it is to get the people in your business to tell those success stories for you.

A simple example is from James, one of our Customer Success Managers in the UK. When was tasked to enhance awareness and build engagement for one of our clients in the gaming industry, he went all out and set up a casino for their employees. From 7 p.m. to 1 a.m., he and his project team provided games, treats and fun, all in the spirit of the employees getting to know their benefits and rewards program better.

James shared this experience globally in a blog post on our company's employee engagement hub, hoping to inspire other Customer Success Managers’ creativity and to encourage them to live one of our values, Love Your Job. The outcome? James’ story reached our 380 employees and got a steady stream of thumbs up, heart and applause reactions and comments on his post, as well as eCards that congratulated him for his innovative approach. Recognition came in from around the globe, and when I asked him how that made him feel, he replied,

“I’ve never felt more valued by my company, which was just the best feeling ever. The actual roadshow was quite difficult, as it was a 17-hour working day in total, but it was made completely worth it knowing that I had the recognition and support of everyone at RG. I have only worked at RG for 6 months, and technically I’m still in my probation, but I felt like I had been recognized as a really valued member of the team on an international basis, which was just the coolest feeling ever.”

Encouraging people to acknowledge and record daily stories of progress, success and values being demonstrated builds awareness and connectedness. Recognition does have a long-term impact on employee engagement – and it’s completely free, so it makes sense for many businesses to start here.

So, when is a monetary reward a good idea?

While supporting employees with thoughtful stories is a powerful way to motivate and engage with them, there are times when someone noticing isn’t enough. “I’m glad you see me, but how can the recognition be elevated higher to reflect my above and beyond work?” As its name implies, monetary recognition means that employees are given a financial reward when they perform exceptionally well at work. Traditionally, rewards with a monetary value have been used to say thank you or as a gesture of good will. Monetary employee recognition could be a cash award, gift cards to an employees’ favorite retailers or even discretionary company shares.

I recommend introducing this when you really want to distinguish good from great. Rewards show the recipient that what they’ve done deserves extra attention and something tangible. But even if you had an unlimited budget, introducing rewards is something that requires careful consideration. It makes sense to introduce reward when the reward:

• properly demonstrates that an employee’s actions are outside their "normal" role requirements and can be directly linked to impact on the organization.
• properly reflects the value that the person has contributed to the organization.
• is consistent and fair across the organization.
• is able to truly delight the recipient, because it is both useful and reflects their personal preferences.

The third “R” - Recognition, Reward and Redemption

The trick with providing rewards is to make them simple and easy to give AND also allow employees to use the reward for what is most valuable to them. Perhaps they would love to treat themselves with an expensive coffee to start their morning, or maybe they don’t even drink coffee. Maybe the employee wants to spend on something frivolous, or maybe they most want to upscale their family Christmas and get those top tier gifts (without top tier costs). If rewards are for above and beyond work, how can you make sure employees feel good about what they get without having them fill out a survey or sending managers all over town for gift cards?

For example, when I was in my 20’s I saved up my rewards to contribute to my first ever pair of diamond earrings. I loved the sparkle, but didn’t feel comfortable spending “my own money” on that expense. However, in my 40’s I redeemed my points through our Amazon integration to get a high end vacuum to REALLY get up the pet hair. My 20-something self would have been horrified by my choice, but my 40-something self watched the shipping tracker and couldn’t wait to try out my new toy.

When you add in rewards - for great work or as a part of birthdays and anniversaries - make sure your redemption plan honors employees and their unique needs as much as the recognition stories did.

A little reward can go a long way

It’s easy to get turned off by the idea of giving employees financial reward; many people think it’ll become too expensive, especially if they know that the reward amount needs to match the effort of the employee, lest it end end up insulting. I’m sure there are more than just a few employees who’ve been left disgruntled and demotivated after receiving a $50 voucher after 15 years of service.

So instead of thinking about cost, think instead of how to use what reward budget you have to build velocity and increase the impact of social and peer-to-peer recognition that is free. Start by laying a strong foundation by encouraging people to recognize the good in the business on a daily basis, and use reward to focus in on the great.

Achieving balance between non-monetary and monetary reward and recognition

If you’ve read this because you’re at the beginning of your employee reward and recognition journey or you know your program needs a refresh, you need to start by identifying what it is you’re trying to achieve with your R&R program.

Being intentional and strategic with recognition and reward, and how wins are celebrated in your business can move the engagement needle quickly.

There’s no need to come up with an over-complicated structure or your people will do nothing. Instead, keep it simple and clearly define the rules of the game. You could start with just 2-3 levels of rewards and recognition - with free eCards at the bottom which is available to everyone, a layer of rewards that employees can instantly give to employees, and a final layer of leader-led rewards that are high value and reserved for the best of the best.

Empowering and enabling your employees to choose between when and how often to recognize or reward their colleagues cultivates trust in your business and also allows you to cater for the different needs of your employees.

Once you understand this and provide both types of reward and recognition in your program, you have so much potential to do great things! Now it’s just a matter of getting creative with your rewards.

Employee recognition should be fun – it’s all about the moment and appreciating the person who has done an amazing job.

Learn more about Reward Gateway | Edenred’s Employee Recognition & Reward solutions and let us help you make your corner of the world a better place to work.