The data is clear: recognizing and rewarding great work has a significant and measurable impact on employee retention. A Gallup/WorkHuman study found that employees who feel the recognition they receive matches their needs are 56% less likely to be looking for new job opportunities, three times more likely to be loyal to their organization, and five times as likely to see a path to grow at their organization.
But what are the best ways to recognize and reward employees for their work? We’ve got four types of rewards and recognition you should try.
Rewards vs. Recognition
Employee rewards and recognition are often grouped together, but they’re not quite the same—and knowing the difference can help you create a more effective strategy.
Recognition is about thanking employees for their contributions in the workplace, whether that’s with a shoutout from a manager in a team meeting, a note from a peer, or a call from a leader to highlight great work.
Rewards can be a part of recognition, but they specifically refer to giving employees a tangible (and typically monetary) perk for a job well done.
Both rewards and recognition are important to your retention efforts. If employees are regularly getting praised for their hard work but not seeing any improvements in their pay or career path, that’s eventually demotivating. And if they’re not getting any acknowledgment for their work in any way, that’s an even larger issue.
But only giving financial incentives for performance can also reduce intrinsic motivation, which can actually negatively impact performance. Combining rewards and recognition therefore makes your retention plan more effective, and your employees more satisfied—here’s how to do it.
Offering bonuses to employees who go above and beyond in a certain quarter or year is a good way to reward your top performers. You can also offer bonuses to all employees if your business hits certain targets to show them that everyone shares in your company’s success, which is motivating for future performance and also encourages retention because employees know great work is rewarded.
2. Employee Awards
Employee awards are a form of recognition that publicly recognize employees who perform well, and show other employees what great performance looks like as well.
You can (and should) go beyond the clichéd “employee of the month” award and come up with more creative designations. Some larger corporate organizations have a version of the Chairman’s or President’s Award to recognize their most impactful employees. You can award the employee with the most creative ideas, best process improvements, or for contributing to team morale.
And the award doesn’t need to come with a reward to be effective, though it certainly can if you think it’s warranted. As a rule of thumb, the larger the contribution being awarded, the more likely it should come with a proportional reward.
3. Time Off
Getting extra time off is a thoughtful reward that doesn’t come with a direct monetary cost in most cases. For example, if an employee or team has been putting in extra hours for months on a big project (and they’re salaried), rewarding them with an extra day off once the work is completed can make them feel appreciated and rejuvenated.
And that time off can reduce burnout after going all out as well. Since burnt-out employees are 2.6 times more likely to be looking for a new job, allowing hard-working employees to take the time they need to rest and recover is good for your retention rates too.
It’s extremely difficult to retain your best people if you can’t promote them at a reasonable rate. A promotion is both a recognition of an employee’s growth, performance, and potential, and a financial reward in the form of a raise as well. You should announce promotions publicly and proudly so other employees can see what a path to career growth at your company could look like for them—plus it makes the promoted employee feel great.
Looking for more ways to improve your employee retention rates by hiring the right people from the start? Cangrade can help—our platform can even help you identify the right promotions and future leaders for your organization.