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Rewards and Incentives in the Workplace: Do They Work?

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Only 33% of U.S. workers are “very satisfied” with their current job, according to a 2018 survey. This statistic speaks volumes about the current state of employment in the United States. While 45% of workers answered that they were “somewhat satisfied” with their job, this leaves almost a quarter of the workforce as being unsatisfied. To take things a step further, we need to consider whether employees only being “somewhat satisfied,” which was the most common answer, is enough.

The happiness of your employees is paramount to the success of your business, and if you want to be in the upper-echelon of employers in your industry to attract the best talent, the goal should be to move a large percentage of those “somewhat satisfied” responses to “very satisfied.”  One way to accomplish this goal may be to integrate a program for rewards and incentives in the workplace.

But what types of programs should you be considering?

Do Rewards and Incentives Really Work?

Any recognition program is only as good as its execution. When done correctly, rewards and incentives in the workplace are highly successful in keeping employees engaged and driving results. 

Gallup found that “workplace recognition motivates, provides a sense of accomplishment and makes employees feel valued for their work. Recognition not only boosts individual employee engagement, but it also has been found to increase productivity and loyalty to the company, leading to higher retention.”

A recent study determined that 63% of the survey respondents who claimed they were “always” or “usually” recognized at work were also “very unlikely” to look for new employment in the following 3-6 months. This type of data shows a strong correlation between recognition and retention rates.

It isn’t only recognition programs that promote highly-productive employees. It’s also been shown that incentive programs can be highly effective. In a 2018 study by Genesis Associates, it was found that 85% of workers felt more motivated to do their job to the best of their ability when there was some incentive beyond just their standard compensation.

The evidence suggests that employee rewards, incentives, and recognition go a long way to creating a culture of happy, loyal, and productive employees. When workers feel their efforts are recognized by their employer, it leads to a high level of engagement. These types of employees are the ones that stick around for the long haul, and along with this culture of positivity comes higher productivity.

Types of Rewards and Incentives in the Workplace

There are a plethora of different options your organization can use to reward and incentivize the employees productivity. These programs aim to encourage higher output of performance and foster a culture of highly satisfied employees simultaneously. Let’s look at a few possibilities for your company to implement rewards and incentives in the workplace.

Top Achiever Rewards

One of the best ways to encourage employee satisfaction and garner higher productivity is to reward employees who achieve top results. Many companies use metrics in their employee evaluations, and unfortunately, many also use these metrics for adverse action rather than positive reinforcement. Giving your employees goals to reach is a critical step, but instituting a reward structure is the best way to keep employees excited, engaged, and excelling in their jobs.

Here are just a few of the many options you can consider to reward your top achieving employees:

Gift Cards

While handing out cash in the form of bonuses may be a viable option, these bonuses have many tax implications. If you choose not to go the bonus route, a better option may be to provide your top achievers for the month, quarter, or year with a gift card to the retailer of their choice.

Company Branded Items

Happy and loyal employees enjoy receiving gifts branded with their employer’s logo. Providing your employees with branded t-shirts, coffee mugs, hats, etc., is a great way to reward them for their hard work in addition to promoting your brand.

Travel Opportunities

How far you choose to go in your rewards program is entirely up to your business’s philosophy and budget. Travel can be expensive, but that is also what makes the gift of all-expenses-paid travel an extremely enticing incentive for your employees to become top achievers.


Partner with a rewards and incentives partner who can build a custom-curated, online/app-based catalog of all kinds of merchandise to appeal to different tastes and reward amounts. They can make it easy for your employees to accumulate “points” to pick items they really want. Tech gadgets are always popular, so offering prizes such as brand-name headphones, iPads, and smart home devices is sure to be a hit with your employees. 

Rewarding Years of Service

According to a 2020 news release by the Bureau of Labor Statistics, the median tenure for employees with their current organization is 4.1 years. In the grand scheme of things, this isn’t a particularly long time that workers are remaining with their employer. When you’re able to cultivate a seasoned workforce of tenured employees within your organization, it only serves to make your business stronger.

Because it is so critical to keep your valuable employees in the fold rather than losing them to competitors, rewarding their years of service annually is a fantastic way to provide employees with a token of your appreciation.

Each year, on the anniversary of employment, you can provide each employee with a gift, preferably increasing in value with each year they are with your company. Start out smaller, perhaps with some company-branded gear, and work up toward a highly-coveted travel package, for example, for employees who reach the 10-year mark in their tenure.

Related: 4 Recognition Trends We Expect in 2021

Who Uses These Programs?

Many companies have some form of incentive and rewards program. In fact, employee recognition is a $46 billion market worldwide. Why, then, do 40% of employed Americans say they would put more effort into their work if their employers recognized them more often? 

On the surface, these two statistics may seem contradictory. However, there is an obvious conclusion: Even though employers have recognition programs, they aren’t doing enough.

There are some companies that have incredibly successful reward and incentive programs in the workplace. Bear in mind that those called out here are large corporations with massive budgets. However, notice that in some cases, the rewards that don’t involve money are the most successful in creating a culture of employee engagement. 

Here are a few examples of corporations that are doing things the right way. 


Apple is consistently rated as one of the best companies to work for, and much of it has to do with its culture of employee appreciation. The tech giant is known for being generous with its paid time off programs. For example, during holiday seasons, Apple has surprised employees with an extended holiday allowing the workforce to take an entire week off.

There is more to Apple’s employee recognition than simple time off, though. The company is all about celebration, holding many company events. One such event is the Apple “beer bash,” where employees can enjoy complimentary beer and food and take in performances from well-known musical guests.


If you haven’t heard of Zappos, it is a large multinational e-commerce corporation. Zappos has taken a novel approach to employee appreciation by instituting a peer-to-peer format. In this type of reward program, employees recognize each other rather than management making the call. For example, the company has a coworker bonus program, in which employees can reward each other with a $50 bonus for going above and beyond in their job.

The company also has its ‘Zollar Program’ where employees can earn ‘Zappos Dollars’ when they complete training modules. These Zollars can then be redeemed for Zappos branded merchandise, such as gym bags and water bottles.

Who wouldn’t want to work at a company with such fun and innovative programs?


Like Zappos, Google believes in the power of peer recognition. One of the company’s programs, called ‘gThanks,’ provides an opportunity for employees to recognize their co-workers, and they can even nominate each other for the peer bonus program. This program offers the winners a $175 bonus.

Monetary rewards are not the only way to make employees feel appreciated and motivated, though. Google also has what they call the “Wall of Happy,” which is an area where employees can put emails and thank you notes to recognize the accomplishments of fellow employees. This may sound minor, but people like the feeling of being recognized for the job they are doing. Often, these non-monetary rewards are even more motivating to employees.


The culture that Disney has cultivated among its employees is nothing short of amazing. The company has over one hundred awards to recognize its employees. In fact, the company even has an award ceremony it holds annually to recognize employees with excellent performance. This award ceremony is a red-carpet event where award winners receive special plaques, the most prestigious of which is the Walt Disney Legacy Award. The winner of this award also receives a special blue name tag to maintain their recognition year-round.

Related: Personalize Rewards to Strengthen Manager-Employee Relationships

How to Incorporate Rewards and Incentives into Your Business

Programs that recognize employees are effective, but how should you even begin?

While we are looking to do right by employees, the reality is that there is only so much cash flow within any given business. Some, like Apple, may be able to put together extensive and costly programs due to being one of the most profitable companies in the world. A smaller, one-location operation is likely to be on a tight budget.

With that in mind, the first step in building a rewards and incentives program in your workplace is always to assess your finances and determine how much you can budget toward reward and incentive programs. You can then decide the types of programs that fit within your budget and how extensive they can be.

Tenure recognition is one of the simplest to implement, and the cost can be kept relatively low. Start by putting together a tiered structure of gifts for each year of service, with increasing value. A first-anniversary gift, for example, may come in the form of a $50 Amazon gift card. For a second anniversary, perhaps step that up to merchandise worth $100, and so on.

Additionally, peer-to-peer recognition programs are becoming a more popular trend. Employees often feel more motivated when their co-workers show them recognition for their work than when their manager does the same.

Get Expert Help

One of the first steps to consider is outsourcing the running of these programs to a partner that is an expert in rewards and incentives in the workplace. Look for a partner that offers various offerings, including rewards, incentives, and recognition programs. A good employee engagement company will learn about your business’s unique needs and pain points to tailor a custom solution that fits perfectly with your organization.

While you could certainly handle your entire employee engagement program in-house, there is some risk in this. Simply instituting a reward or incentive program is not a guarantee of success. The programs you implement need to be strategic, and a lot of experience is required to confidently put a plan in place.

Building a Culture of Recognition

Rewards and incentives in the workplace are a great way to keep your employees feeling engaged and appreciated, which leads to greater productivity and retention. There are several possible programs to implement, such as tenure recognition, top-performer bonuses, and peer-to-peer recognition programs. Some of these programs can be costly, but other options are both cheap–if not free–and effective.

A free recognition strategy can be as simple as calling out a job well done by individual employees on your company’s social media page and rewarding the recognized employees with some form of reward. The key is in determining the best options that fit within your budget.

Running these programs doesn’t have to be expensive, but there are many strategies to consider and systems to be put in place to make it work. Xceleration is a highly-experienced and successful company that specializes in employee engagement, incentive, and loyalty programs. If you’re looking for a perfect solution to improve your employee experience, contact us today to see how we can help you build a motivating rewards and incentives program for your workplace.

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