Finding ways to reward and motivate valuable employees is vital to businesses of any size. Rewarding employees for their efforts, especially those who go above and beyond their job duties, improve the likelihood of retaining those employees.
According to Interview Stream, a recruiting software company, about a third of employees will quit within the first six months. Additionally, 80% of corporate leaders feel that employee retention is a critical issue. So, businesses across America and the globe are looking for new ways to encourage, motivate and reward their most valuable employees with the goal of improving their retention rates.
Although increased pay, bonuses and promotions are always a hit, many businesses and corporations today are getting creative when it comes to rewarding and motivating their employees in big and small ways. Here are nine ideas to get you started.
1. Peer-to-peer rewards
Peer-to-peer rewards are one excellent way to encourage your employees to recognize each other. These kinds of rewards can include anything from a small certificate that highlights what the recipient is being rewarded for to company-branded ‘fake money’ that can be saved up and spent at a company store for branded merchandise. That's what one company — Zappos, does. Zappos employees reward their peers for outstanding effort using "zollars," Zappos internal currency. There's a lot that you can do with a peer reward system. The key is taking the time to get to know your employees, what they like, and what motivates them.
2. VIP wall story
Many employers, large and small, use a VIP wall to recognize and encourage top employees. The idea behind it is simple and falls in line with what used to be known as "Employee of the Month." The difference is that the VIP wall puts a modern spin on its predecessor.
You can use the VIP wall in many ways and personalize it for your brand and the purpose of your business. However, the idea is generally to include a photo of the employee or employees, if there are multiple recipients, and a short story about the employee, their career background and what their accomplishment was that landed them on the wall. Some employers pair this with a small consolation prize like a gift card to a local diner or merchant, cash prize, or luxury corporate gifts to make their top employees feel extra special.
3. Front row parking for a month
VIP parking. Hero of the month parking, or whatever you choose to call it, is another great way to motivate your employees. This one works particularly well if your business has a large parking lot and you can set aside one coveted spot to entice your top performers with. To create a larger impact, make a big deal out of it. One idea is to pair it with another reward like a certificate, honorable mention in a company newsletter or website, inclusion on the VIP wall, or something else of your choosing.
4. Beer on tap
While it might sound counterproductive at first, many companies are offering occasional beer as a reward for hard work. Some businesses pass out a complimentary bottle while others keep beer on tap for special occasions. This doesn't mean that employees will have unlimited access and it certainly doesn't promote intoxication. However, it does serve as a creative, alternative reward that works well for many company cultures. If this doesn't work for your culture, consider other alternatives. Glassdoor, for example, offers its employees, free fitness classes. Other businesses offer branded swag like t-shirts, hats, mugs, water bottles, and more.
5. MVP picnic or barbecue
MVP or team luncheons, whether you opt to dine out or host a picnic or barbecue, are a great way to create a buzz among employees. It's also great networking or team-building opportunity. Some companies go all out to create a fun atmosphere and game out of it.
A department of one company in particular — American insurance company, Unum, held a holiday party at a local venue but didn't tell department employees the location of the venue. Instead, employees were placed in small teams and each group was given a clue and sent on a scavenger hunt throughout the local area to work together (team building) to find the next clue.
The game got local business partners involved and included such activities as singing a holiday song, sampling certain types of food from local vendors, and gaining signatures from local business owners after learning about the business and locating certain items. The final clue of the game provided the location of the holiday party and was a huge hit among employees.
While this level of coordination may not work for every business and budget, the idea behind it can be scaled, altered and customized to suit the needs of your business and reward your employees for their hard work.
6. Extra vacation days
Extra vacation days are another amazing way to reward employees because who doesn't like extra time off, especially if it’s paid time off. Although extra vacation time makes a great reward for any employee, it's even more valuable to those employees who might be single parents needing to care for a sick child or other loved one, those faced with personal matters, or those with medical needs of their own. The additional vacation time might allow these employees that much more time to take care of their family or personal needs. For other employees, it's a great way to reward them with a little extra rest and relaxation.
7. MVP monetary rewards
Monetary rewards are always a winner because everyone can use cash. Monetary rewards come in many forms like bonus checks, cash, prepaid Visa or Mastercards, or other gift cards. The most coveted monetary rewards are usually those that employees can choose how, when and where to spend their reward. If you choose to offer a bonus check, though, keep your country's tax laws in mind. Some tax laws require employers to withhold taxes under certain conditions.
8. Company stock
Stock options used to be all the rave … until they weren't. While they are still a great way to reward your employees, employers need to learn and understand how and when to use them and when not to use them. A stock option during a down market, for example, does not a good reward make.
However, there are other alternatives out there that today's modern businesses are picking up on and having success with. They include phantom stock, which is essentially not your company’s real stock, but a promise to pay a cash bonus equivalent to the value of your stock.
A second option is offering restricted stock, which is rewarding the employee future stock based on their performance and time vested.
Finally, a third option is to reward top employees with stock appreciation rights. This works similar to phantom stock, except that it offers employees the appreciation value of a certain amount of stock over a predetermined amount of time.
9. Annual trips for top contenders
If you're looking for a big way to reward top employees, an annual trip makes a nice touch. Many companies use these opportunities to schedule trips for their best employees to some of the top coveted travel destinations, but they also make it a business trip. So, for example, you might go with your team of top employees to Florida for a few days to enjoy some time at Disney with its "Business Excellence" course. The days itinerary might include team-building exercises, motivational speakers, and, of course, some free time to explore the park. Or, maybe you take your top crew to a luxury destination and venue for a fun, motivating and learning convention like the beauty brand Avon RepFest in America.
Employee recognition is one of those things that even a small amount has superior staying power. A study by Gallup found that only a third of employees surveyed said that they had received some type of recognition in the previous seven days.
Employees who feel they aren’t getting enough recognition from their employers are twice as likely to quit their jobs in the next year. Yet, precisely "who" is doing the recognizing is also important. Gallup found that employees' direct manager creates the highest impact — 28%, but this is followed closely behind with recognition from a high-level leader or CEO — 24%. That says a lot about what you can do today to improve your employee retention rate tomorrow.
Compensating and rewarding top-performing employees play a key role in keeping these valuable employees and that's not likely to change anytime soon. So, when you review your employee compensation and reward plan, dig in and get creative with your ideas — even a little can go a long way.