Every business leader has their own idea for how to reward employees for great work. However, most rewards programs are lacking in one way or another. When it comes to rewarding employees for great work, most people immediately think about money. But, that’s only half the answer.

After working with hundreds of businesses over the years, we’ve seen that the best employee rewards programs address four key areas: compensation, 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 great work.

Two Effective Ways to Reward Employees for Great Work

There are two effective and primary ways you can recognize employees for doing great work:

1. Formal reward programs built around compensation and benefits.

Formal reward systems tied to pay and benefits are key for keeping employees engaged and committed. These programs align with business goals and employee performance.

  • Salary and Compensation: Competitive salaries are a must to attract and keep top talent. A formal rewards program could involve regular performance reviews linked to salary bumps. This ensures employees feel recognized for their growth and dedication. Transparent and fair evaluation methods can build trust and motivation.
  • 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 rewards can also cover chances for career advancement. Promotions, skill-building initiatives, and mentorship programs show the company’s investment in employee growth. This rewards past performance and cultivates loyalty.
  • 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. Learning what makes them feel valued lets leaders offer personalized tokens of appreciation. It might be a heartfelt thank-you note, a small gift tied to their hobbies, or a public shout-out during team meetings.
  • 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: While big achievements matter, celebrating small victories shouldn’t be overlooked. Informal rewards can involve spontaneous celebrations for completing a tough task, reaching a minor milestone, or simply pushing through a challenging week.

Both formal and informal reward programs create a well-rounded approach to recognizing and appreciating employees. Together, these strategies build an environment where employees feel valued, motivated, and eager to give 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.