Every business owner has their own idea on how to recognize outstanding performance by employees. Most rewards systems, meanwhile, lack one aspect or another. Many individuals first consider money when it comes time to thank employees for great work. But that just addresses half the solution.

Working with hundreds of companies over the years, we have noticed that the top employee incentives programs cover four fundamental areas: salary, benefits, recognition, and appreciation. The problem for many businesses is that they’re either missing one or more of these elements, or the elements that are addressed aren’t properly aligned with the company’s other corporate strategies.

Here are some best practices your business can put in place to make sure you’re properly addressing each area in the ways you reward employees for excellent performance.

Two Effective Approaches to Honor Employees for Great Work

There are two effective ways you may reward your employees for their outstanding efforts.

1. Formal reward systems based on perks and pay.

Maintaining employee engagement and commitment depends mostly on formal reward systems connected to salary and perks. These initiatives coincide with employee performance and company objectives.

  • Salary and Compensation: To attract and retain top talent you must offer competitive pay. A formal incentives program could call for regular performance assessments connected to pay increases. This ensures employees feel appreciated for their development and commitment. Fair and open assessment techniques help to establish motivation and confidence.
  • Performance Bonuses: Motivating outstanding performance with bonuses is a strong driver. These can be connected to specific achievements like hitting sales targets, finishing projects early, or contributing innovative ideas. Structuring bonuses so employees see a clear link between effort and reward can amp up their drive to excel.
  • Benefits and Perks: Beyond base pay and bonuses, comprehensive benefits packages matter. Health insurance, retirement plans, stock options, and wellness programs are crucial. Employees see these as signs of the company valuing their well-being and long-term commitment.
  • Career Growth: Formal incentives can also offer possibilities for professional development. Programs for skill-building, mentoring, and promotions highlight the company’s commitment to staff development. This builds loyalty and pays for past success.
  • Milestone Recognition: Recognizing employees hitting certain tenure milestones can be part of a formal rewards plan. Celebrating work anniversaries, for instance, demonstrates the company’s appreciation for ongoing dedication.

2. Informal reward programs built around recognition and appreciation.

Informal reward schemes based on recognition and appreciation play a big role in fostering positivity and boosting morale. These programs tap into emotional aspects of employee motivation.

  • Personalized Appreciation: Effective informal rewards start with understanding each employee’s preferences. Knowing what makes them valuable helps leaders present individualized expressions of thanks. It may be a sincere thank-you email, a little present connected to their interests, or a team shout-out in public.
  • Peer Shout-Outs: Encouraging colleagues to highlight each other’s contributions builds camaraderie. Informal programs can include platforms where team members can publicly praise and thank peers for their support and achievements. This boosts self-esteem and team spirit.
  • Flexible Work Options: Providing work flexibility, like remote days or flexible hours, is a highly appreciated form of recognition. It acknowledges employees’ need for balance and their commitments outside work.
  • Skill Growth Opportunities: Investing in employee development shows commitment to their growth. Informal rewards can involve sponsoring workshops, online courses, or conferences linked to their field. This enhances skills and makes them feel valued.
  • Celebrating Small Wins: Although major accomplishments are important, small successes shouldn’t be understated. Informal incentives might be impromptu celebrations for finishing a difficult project, marking a small achievement, or just getting through a demanding week.

Formal and informal reward systems together provide a comprehensive means of honoring and valuing staff members. These approaches taken together create an environment in which staff members feel appreciated, inspired, and ready to do their best.

Need Help Developing an Employee Rewards Program?

Whether you have five employees or 500, every company needs a strategic reward system. It’s one of the most important things you can do to boost morale and improve company culture.

Wondering if you’re paying employees enough? Looking to create a formal rewards program? Realize your current program has lacked the important informal elements?

Our team at LBMC Employment Partners can help you create a program employees brag about to their friends. Connect with one of our team members today to learn how we can help you build a comprehensive employee rewards program that fits your overall business objectives.