The history of reward and recognition goes way back to the first Olympic Games in Ancient Greece. The winners of the Games were awarded with various prizes, including medals. Fast forward to today and athletes still consider it to be a great honour to participate in the Olympic Games and be recognised for their achievement with a medal.
Over the years scientists and psychologists have studied this concept of reward and how it translates into motivating people. Many of these theories have been implemented into the workplace including Frederick W. Taylor’s monetary incentive to make employees more productive, and B.F. Skinner’s rewarding hard-working behaviour which resulted in a trend of pay incentive programmes.
You will still find some of these theories used in today’s society. However, experience has taught us that monetary incentives and payment plans, originally theorised as high motivators, no longer work. People have stopped performing better because they receive a lump sum of money. One-off cash handouts soon became meaningless and workforces wanted more.
In this article we’ll be exploring reward and recognition in depth to support your business in implementing the right strategies and techniques to get the most from your employees and customers.
If you’d prefer to skip the detail and look at reward ideas for your business now, download our The Indispensable Guide to Rewards eBook here.
What is the difference between reward and recognition?
An easy way to understand the difference between reward and recognition is thinking about rewards as being tangible, and recognition being non-tangible. For example a reward can be a gift card, cash or desirable item. Think of it as a prize, a trophy if you like. Yet recognition tends to be more conversational, such as a thank you or a well done from a direct line manager or colleague. Both however go hand in hand – you will often recognise someone by saying well done, and then reward them for their achievement with a gift. Not all recognition has to follow with a reward. However, when credit is due it’s advised that you do.
Why is reward and recognition important?
Think about how you would feel if you worked hard day-in-day-out for months with the only appreciation being your salary. You would feel ok for a while, however over time your motivation levels would drop and you’d become disinterested in what you were doing.
Now think about how you’d feel if you were working hard but receiving regular “thank yous” from your manager and a gift card every now and then to enjoy a meal out with a friend or family member. You’d no doubt enjoy your job more and gain a good level of satisfaction from working hard. Not only will you feel content with the output you’re providing, but you’ll be more likely to continue working hard for a longer length of time, without feeling bored or disengaged.
Unfortunately, feeling grateful for having a job or purchasing a product is not enough anymore. People want to feel appreciated in other ways, and adding value to someone’s life, through elements such as rewards, is a proven way to do that.
How do rewards motivate people?
An extensive amount of studies have been conducted over time comparing what happens when you reward people for behaviour, and when you don’t. One business that explored the impact of reward was The Academy of Management Learning and Education. It analysed whether rewarding students at Vienna University of Economics and Business would improve the number of people completing their online assignments. In an attempt to improve engagement the University offered an identical online course twice, with students on one course receiving a small amount of credit for homework completion. The results were outstanding. The average number of students submitting the homework in the group receiving the credit was quadruple that of the group not receiving any reward.
Other studies have shown similar results. The popular TV series, ‘The Secret Life of Four-Year-Olds’, revealed how humans are functioned to respond positively to recognition, even from a young age. Professor Paul Howard Jones, a contributor on the programme, explained how giving praise in different ways influenced a child’s belief in their ability – the more praise they received, the more they felt they could achieve.
Both examples clearly show how we, humans, respond optimistically to recognition and rewards. They motivate us to perform well and give us a sense of achievement.
What rewards do employees and customers want?
As the world has advanced the appreciation for receiving a carriage clock for long service or a one-off cash bonus has deteriorated. Lifestyles have become faster paced and people have higher aspirations. Our rewards research, Do Digital Rewards Right, analysed all aspects of society to gain information about what people want from rewards today. The results showed that people want rewards to be accessible online, flexible and received little and often.
1. Online rewards
Smartphones are a huge part of everyone’s daily lives, therefore rewards need to be available to function from the palm of your employee or customers’ hand. Digital rewards are the future and businesses need to invest in them now to ensure they don’t get left behind.
2. Little and often rewards
Customers and employees today want instant gratification as our behaviours have shifted to expecting things ‘now’ at the click of a button. Our own research reveals almost half of customers prefer a little and often approach to rewards and incentives. It’s time to scrap the big ticket rewards and opt for small prizes at more regular intervals instead.
3. Flexible rewards
There is no one-size-fits-all reward anymore. While we may have once all felt grateful for a bottle of bubbly, evolution has enabled us to expand our interests, beliefs and hobbies. It means that if a gift is right for one person, it’s highly likely that it won’t be right for another. The safest strategy to opt for is a reward that is flexible and gives choice. Hand the decision over to your employee or customer and they’re more likely to feel satisfied and valued with the gift they receive.
Reward and recognition ideas
Now we’ve explored all the reasons why reward and recognition plays a fundamental part in getting the best out of people, let’s look at reward ideas. Here are our top five reward solutions used to recognise employees and customers for demonstrating positive behaviours that grow engagement, productivity and business growth.
1. Prepaid Cards
Prepaid cards are a great alternative to cash.
We know from experience that the motivational benefits from receiving cash can be weakened as the money is spent on bills and other mundane payments. If however you still want to give your employees or customers money to treat themselves, prepaid cards are the ideal solution.
Prepaid cards can be uploaded with a sum of money that can be spent in a variety of supermarkets, retailers and leisure outlets. It means you can still give your audience ‘cash’, however you can be confident they will spend the money on something they will enjoy – not on paying off overdrafts or debt. Prepaid cards also give people choice and flexibility allowing them to spread the money across as many outlets as they like.
Our prepaid cards are developed to be easily accessible and can be added to your employee or customers’ mobile-wallet. Transactions can be made in-store or online, and cards can be topped up for ongoing reward programmes.
2. Gift Cards
Gift cards provide flexible rewards.
Flexible rewards are what employees and customers want today. As a society our interests, needs and wants have expanded because of all the extra assets and experiences that are available to us. It means there is no one-size-fits-all approach anymore. Gift cards, especially ones that give choice, are an example of a flexible reward employees and customers will love.
Gift cards that give choice can include multi-retailer gift cards, such as our One4all card, or themed gift cards that include a variety of brands under one umbrella theme, for example our One4all Favourites cards. In our On4eall Favourites range we have categories that span dining out, health and beauty, entertainment, sport, and fashion.
Multi-retailer cards are also growing in popularity. Expenditure on these type of cards hit £808million in 2019, representing over 17.4% of consumer gift card spending.
3. Digital reward codes
Want instant rewards? You need Digital Reward Codes.
Research shows people spend an average of three hours and 15 minutes on their phones every day. That means if you make your rewards accessible via a smartphone, your audience members are more likely to engage with them.
Digital reward codes provide instant recognition as they can be delivered within 24 hours, sometimes sooner. Within a matter of hours an employee or customer can receive a text or email with a personal message thanking or congratulating them with a digital gift.
Our digital reward platform, Select, enables employees and customers to redeem their codes for a gift card or eGift of their choice. So, not only will they receive a reward instantly, they are then given flexibility to choose their prize. Feedback confirms that people enjoy deciding where, when and how to spend their digital reward code. The time spent considering their options also means more time for them to benefit from feeling appreciated, which in turn gives them a longer motivational boost.
East Midlands Trains is a business that has been using our digital reward platform for some time and said, “Select really broadened our scope for recognition. It’s such an easy and seamless process.”
Give an eGift from brands people love.
eGifts are rewards that are delivered to employees and customers electronically via email. If you are confident knowing what your audience want from their reward, then eGifts are a great way to provide instant recognition.
Our eGifts send employees and customers a single-retailer gift card to their email, which they can automatically use online or in-store. All eGifts are from brands people love, and recipients feel instant elation when they see a reward pop into their inbox. As eGifts are via email it’s easy to include personal and individual messages with this type of reward. From telling an employee to treat themselves at Starbucks, to giving a customer an M&S voucher to buy their favourite indulgence, the options are endless when it comes to showing your appreciation with eGifts.
5. Discounted gift cards and gifts
Reward little and often with VIP access to ongoing discounts.
Almost half of people said they want a ‘little and often’ approach to incentives and rewards in our recent ‘Do Digital Rewards Right’ study. However, finding a way to do that without making the process labour intensive isn’t always easy.
To help businesses show their ongoing gratitude we developed Voucher Store, a closed user-group platform that allows VIP members to purchase gift cards or eGifts at a discounted rate, all year round. Our discounted gift card store can be white labelled, and API-technology means it looks like your own shop – not ours. We manage all Voucher Stores behind the scenes, including distribution, so you can concentrate on other business priorities.
Savings on essentials and treats will benefit many, if not all, your workforce or customer base. If you can help your audience by giving them rewards they’ll value, such as discounts, they’ll feel an ongoing sense of appreciation and loyalty towards your brand.
For more information about each of Blackhawk Network’s reward and recognition products download The Indispensable Guide to Rewards eBook here.
Want ideas for your reward and recognition programme? Fill in the form on the right and one of our experts will be in touch.