A challenging concern that recognition program owners often have is when employees do not redeem their reward points that they have received.
This situation leaves the unresolved concern for organizations having a liability for these points until employees redeem their points and are paid for.
One question that is often asked is how come employees haven’t redeemed their points yet? Have they forgotten what they have? Do they know how to redeem them?
I will share some observations with you and let’s see if together we can address the issues.
When using nominal reward amounts in rewarding employees the typical options available to organizations are cash, points, and gift cards. Researchers have conducted many studies on the benefits of cash versus non-monetary rewards—what about points-based rewards? Further research by Dr. Patricia A. Norberg from Quinnipiac University in Hamden, Connecticut, provides insights from which these Top 10 Ways Points-Based Rewards Are Super Meaningful are based.
1.People think about points more often. For example, individuals who receive reward points tend to think about and plan out how they plan to use them more so than reward recipients who receive cash or gift cards do.
2.They’ll even talk about their points more. Think about personal loyalty points you’ve collected. Employees who receive reward points talk about their reward points more often than employees who get cash or gift cards.
3.Point recipients report higher satisfaction levels. Employees who receive reward points report significantly higher levels of satisfaction with their reward than those reward recipients who got cash or gift cards.
4.People receiving points remember how they used them. Employees receiving reward points were significantly better at remembering what they used their reward points for than those recipients receiving cash or gift cards.
5.There’s a higher perceived trophy status with points. Employees perceive points at a higher currency ratio value than associated with cash rewards, making them more meaningful to employees to hold up with pride.
6.Points get redeemed for more meaningful gifts. Studies show that cash gets used for more utilitarian and practical items such as bills and household necessities. Points get used for meaningful gift items that employees talk about.
7.Using point-based rewards encourages greater engagement. Employees receiving point rewards engage more with company reward sites than cash, which appears on pay statements, or gift cards they have to top up to use.
8.There’s greater potential of emotional appeal with points. Point-based rewards have greater emotional appeal to employees than cash. Emotional draw creates intrinsic connection for the employee with their company.
9.Points generate greater social-emotional impact. If you want a rewards program to create better word-of-mouth promotion across employees and higher levels of employee satisfaction, then points-based rewards appears to fit the bill.
10. Nominal points-based reward programs work. By all accounts, points-based reward programs offer an all round memorable, meaningful, and motivational option to consider in your reward program planning.
Recognition Reflection: Has the organization clearly defined the benefits of a points-based reward program to our employees?
Roy is no longer writing new content for this site (he has retired!), but you can subscribe to Engage2Excel’s blog as Engage2Excel will be taking Roy’s place writing about similar topics on employee recognition and retention, leadership and strategy.
If you are considering setting up a points-based reward program, consider following this list of basic principles before meeting with a vendor or with your own IT team. Points-based incentives are a great tool to use for achieving amazing performance results and for motivating your employees.
Clarify the need for an incentive or reward program. Incentive and reward programs reinforce specific behaviors or actions achieved within a specific time period. Does this fit your purpose for why you want a points-based program?
List the perceived benefits of a point-based reward system. Points are an easily understood reward currency and an alternative to cash. They can be problematic if unredeemed or you paid on issuance. Ensure a great merchandise selection.
Create a business case for using a points-based rewards program. Discuss with all stakeholders the purpose, benefits, and costs, of a points-based program. Outline your action plans for monitoring and any course corrections as needed.
Identify the specific behaviors and positive actions you want people to do. Articulate the specific, actionable, objectives to be achieved that merit earning points. Tell employees things must be done in an ethical and non-gaming way.
Determine how you will track the occurrence of specific results. Figure out the right things to measure using the right measuring stick to do so. How will you know when an employee has performed the desired results in order to reward them?
Find the right way to measure the desired activity. Measure employee productivity and desired behaviors appropriately. Set up systems, recording methods, reports, and online processes needed to measure your target activities.
Figure out the appropriate reward levels for different actions. Different behaviors merit different point values. You can either reward incremental progress towards an end goal or wait for full task completion or target output reached.
Select meaningful and motivational items for point redemption. Make your reward values match the level or degree of performance done. Also give a wide range of merchandise items to choose from when employees redeem their points.
Ensure activities are done the right way for the right reasons. Points-based reward programs can instill gaming or manipulative behaviors. Tell employees to always do the right things that are aligned with both organizational and social values.
Set up analytic opportunities to mine the point-based reward data. Use advanced analytics to look at your points-based incentive data. Find out why certain activities are happening and prescribe what can be done to make great things happen.
Roy is no longer writing new content for this site (he has retired!), but you can subscribe to Engage2Excel’s blog as Engage2Excel will be taking Roy’s place writing about similar topics on employee recognition and retention, leadership and strategy.
As we prepare to enter a whole new decade and move into a future still to be determined I cannot help reflecting on the most popular posts from the past decade. They shed some light on where readers minds are and what they need to learn to make recognition better.
I hope you will benefit from reading these previously shared posts in order to ride into 2021 with confidence and clarity of thought about your recognition strategy.
Many people have clicked on a previous version of this blog post wanting to learn how they should set up a point-based reward program.
Unfortunately, some individuals and recognition and reward providers suggest certain ideas as being best practices so the client’s employees will consume more points. So, buyer beware and let’s learn some principles versus supposed best practices to guide you.
My goal is to provide you with objective information along with solid principles for you to make wise decisions by. I will also give you some pros and cons for some options.
I was recently asked what the benefits are of integrating all of your recognition programs under one recognition portal.
Consolidating or bundling your recognition programs together, allows for greater flexibility with giving better and more frequent recognition in multiple ways.
Let’s take a closer look at what happens when you house your recognition programs under one portal. (more…)
I received this question from a colleague wanting to help a client on how they should set up a points-based reward program.
Some individuals advocate certain ideas as being best practices. Often incentive and reward providers espouse these principles as being absolutely right.
With all this advice out there I will do my best to be objective. I will provide you with some pros and cons along the way for what you can do. (more…)
