Cash Bonuses Won’t Get Your Employees Motivated — But Experiential Rewards Might
We all want motivated, loyal, and productive employees. We want our workers to go the extra mile, to genuinely care about their roles, and to strive continuously to improve. We also know that a great way to incentivize and empower our employees to meet these expectations is to provide them with the right rewards.
But do we really know what our employees want when it comes to recognition?
Money has long been the go-to answer, but recent studies cast doubt on the efficacy of cash bonuses or salary increases when it comes to boosting motivation. Lavish bonuses paid to top employees only prove effective about 50 percent of the time, while merit-based raises only work 20 percent of the time.
If it’s not money, what do employees care about?
It all boils down to two words: meaningful and memorable. One year after a big bonus, employees might not even remember what they spent that money on. On the other hand, if you give an employee a tailored and carefully planned experience, it is likely to stay with them for quite some time. This is why experiential rewards are becoming increasingly popular in the world of employee recognition.
Experiential rewards are special events and experiences that employees can earn, and they prove surprisingly effective at driving engagement and morale.
In a survey conducted by Harvard University psychology professor Dan Gilbert, 57 percent of respondents reported they were happier after making an experiential purchase, compared to 34 percent of respondents after making a material purchase. Millennials are especially drawn to experiences: A Harris Group survey found 72 percent of them would rather pay for an experience than for material goods.
All of this suggests experiential rewards may be an effective replacement for cash bonuses and material goods in an employee recognition program. Not only do employees tend to value experiences over objects, but they’ll also associate the positive experience with you, their employer, thereby building goodwill and strengthening their drive to continue doing great work for you.
The Power of Personalized Rewards
When companies take the time to recognize and reward employees’ hard work, they are rewarded in turn with happier, more productive employees. However, employee recognition is no simple and straightforward task — especially when it comes to experiential rewards.
Employees are individuals, each with their own unique passions, hobbies, and aspirations. As a result, employee recognition needs to be tailored and personalized if it is to be effective at all. After all, the chance to go skydiving might be one employee’s thrill of a lifetime, while causing another employee to run and hide.
What all employees do want is an experience that is memorable, personal, and shareable. So, when considering appropriate experiential rewards for your employees, it’s important to provide a mix of memorable events to account for different tastes and personalities. For example, your experiential rewards might include a range of activities like:
- A paid trip to an exciting travel destination
- A six-course tasting menu at a Michelin-starred restaurant
- A creative class such as acrylic painting or pottery
- A relaxing spa experience
- Tickets to a concert or sporting event
- Kitesurfing, kayaking, or skydiving
Experiential rewards allow you to provide tailored recognition for your hard-working employees. Rather than giving every employee the same lump-sum cash bonus, you can give your workers rewards based on who they are as individuals. Employees will appreciate that you have taken the time to get to know them and have given them something they genuinely care about. This personalized approach will only make your employee recognition program even more effective. When you get experiential rewards right, employees will be motivated to perform to even higher standards, because they will know the payoff is worth it.
Experiential Rewards Are Great for Your Brand
When employees have a great time at work, they share their experiences. In the age of social media, employees are chattier than ever. If they earn an experiential reward that speaks to them, they are likely to share photos on Instagram, tell stories on Facebook, and possibly even live-tweet the experience! You should encourage this sharing, as it will help with your employer brand both internally and externally.
Internally speaking, your other employees will see their colleague having a great time and feel motivated to earn such an experience for themselves. Externally speaking, job seekers will see how well your company treats its employees and be motivated to land a job with you.
Perhaps the most important thing of all to remember is that experiential rewards can be customized to suit your budget. Whether you’re running a global conglomerate that can afford to hire an outside company to manage the whole recognition program or your brand-new startup springs for local sports tickets every quarter, you can invest in some form of experiential reward — and you really should. If you go the extra mile to show your employees they are valued members of your organization, they won’t hesitate to go the extra mile for you, too.
Eppie Shepherd is a marketing executive at Banks-Sadler.