Organizational Wellness

Motivate Your Workforce by Rewarding Employee Performance

May 15, 2023
Last Updated Jun 1, 2023

The success of any company relies on its workforce. After all, they’re the ones that get the job done! And, while comments from a manager like ‘Hey, great job on that project!’ can go a long way, truly rewarding employees is about more than a quick ‘thanks.’

Rewarding employee performance encompasses a range of recognition and appreciation strategies that acknowledge and celebrate the valuable achievements and unique contributions of your team members. Implementing effective reward systems can inspire and motivate a workforce, improving employee satisfaction and engagement while fostering a positive work environment.

To experience these benefits, organizations need to understand the underlying principles and best practices involved. A successful rewards program requires understanding why employee performance rewards matter, the types of rewards that can be implemented, and practical strategies for designing and implementing an initiative. This comprehensive understanding can help any human resource department contribute to its company's long-term success.

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Why Rewarding Employee Performance Matters

Engaged and hardworking employees are likely to be excited by satisfied clients, increased sales, or completed projects. But the satisfaction of a job well done is unlikely on its own to keep people working at peak performance. Rewarding employee performance can be a powerful way to encourage continued achievement: 78% of workers say they’re motivated to improve their performance when their efforts are recognized. Employees that receive meaningful recognition are up to 90% less likely to report feeling burned out regularly.

Rewarding performance can also contribute to a talent retention strategy. Seventy-nine percent of workers who have quit say they did so because of lack of appreciation – making it the number one reason people quit their job. On the flip side, employees at companies that prioritize recognition are 56% likely to be looking for a new job

Six Key Elements of an Employee Rewards Program

  1. Alignment with Organizational Goals: Any rewards program should align with the organization's goals and objectives. This ensures that the rewards program reinforces behaviors and outcomes that contribute to the overall success of the organization. You can embed this in your program by clearly defining the desired behaviors, values, and performance metrics that align with the organizational goals and then designing rewards that specifically recognize and encourage these aspects.
  2. Fairness and Transparency: A rewards program should be perceived as fair and transparent by employees. HR teams need to ensure that the criteria for rewards are clear, consistently applied, and based on objective measures. Transparent communication about the rewards program, its eligibility criteria, and the process of selection or evaluation helps employees understand the system and fosters trust. 
  3. Merit-based: Basing rewards on merit (instead of things like tenure) contributes to a performance-driven culture and motivates employees to strive for excellence. This can be implemented with performance evaluation systems, clear performance metrics, and pre-established reward tiers or categories that reflect different levels of achievement.
  4. Variety and Personalization: Employee rewards programs should offer a variety of rewards to cater to diverse employee preferences and motivations. You can consider individual differences, such as job roles, interests, and aspirations, and offer a range of rewards that appeal to various employee demographics. This customization and personalization enhance the effectiveness of the program by ensuring that rewards are meaningful and relevant to each employee. Conducting surveys or feedback sessions to understand employee preferences, maintaining a diverse rewards catalog, and allowing employees to choose rewards from different options are great ways to go about personalizing your program.
  5. Timeliness and Frequency: Timeliness and frequency of rewards are important aspects of an effective program. Rewards should be timely and delivered close to the actual achievement or performance, maximizing their impact. Regular recognition and rewards can also reinforce positive behaviors and maintain a high level of motivation. HR teams can embed timeliness and frequency by setting up systems that allow for real-time or frequent recognition and rewards, such as monthly or quarterly recognition programs, instant recognition platforms, or ongoing performance feedback channels.
  6. Ongoing Evaluation: Regularly assess the program's effectiveness, collect feedback from employees, and analyze the outcomes to identify areas of improvement can help you keep your program effective. By continuously monitoring and evaluating the program, HR teams can make necessary adjustments to ensure its relevance over time. You can embed ongoing evaluation and adaptation by conducting surveys or focus groups, analyzing program data, seeking feedback from managers and employees, and using the insights gained to make informed changes to the rewards program.

Ways to Reward Employee Performance

There’s no one-size-fits-all approach for rewarding employee performance. Every employee is unique, with individual preferences and motivations. While some may value financial incentives, others may find more fulfillment in personal development opportunities or work-life balance. By offering a combination of both monetary and non-monetary rewards, HR leaders can create a comprehensive and inclusive approach that caters to the diverse interests and aspirations of our employees.

Monetary Rewards

  • Salary Increases: A pay bump is the most sought-after performance reward, with 67% of workers in a Quality Logo Products survey saying a salary increase is how they would most like to be rewarded for a significant accomplishment. They reflect the recognition of an employee's valuable contributions to the organization and their growing skill set. Salary increases provide financial stability and serve as a long-term incentive for employees to continue excelling in their roles. It can in turn improve job satisfaction and enhance the perception of fairness within the organization, making employees feel more motivated and committed to their work.
  • Bonuses: In this same Quality Logo Products survey, 53% of workers said they would like to be rewarded with a bonus, making it the second-most popular reward. Bonuses provide a direct and tangible recognition of an employee's exceptional performance. They are often based on specific performance metrics or targets, clearly indicating that the employee has exceeded expectations and contributed significantly to the organization's success. Employees often appreciate this reward as it establishes a sense of fairness and reinforces their value within the organization, and inspires them to set higher goals for themselves that can lead to continuous improvement.
  • Stock Options: Stock options are a form of equity compensation that offers employees the opportunity to own a portion of the company. This reward is especially prevalent in startups or companies with potential for future growth. Stock options align employees' interests with the organization's success, incentivizing them to work towards its long-term goals and share in its financial success. They provide a chance to benefit from the company's growth and success beyond an employee’s regular salary, fostering a sense of ownership and commitment to the organization's performance. Stock options also offer the potential for significant financial gains in the future, encouraging employees to stay and contribute to the company's long-term success.
  • Profit Sharing: This reward system gives employees a portion of the company's profits based on predetermined criteria. Like stock options, it aligns employees' efforts with the organization's financial performance and encourages them to work towards shared goals, such as increasing productivity or improving profitability. Eligible staffers appreciate profit sharing as it directly links their individual and team performance to financial rewards. It creates a sense of fairness and transparency, as the reward is based on objective criteria. Profit sharing can also foster a collaborative work environment, as employees recognize the impact of their collective efforts on the company's success. 

Non-Monetary Rewards

  • Professional Development: This shows employees the company is invested in their professional growth and offers a chance to advance their careers. Opportunities for training, workshops, conferences, tuition reimbursement programs, or certifications for employees can be distributed based on individual performance or as part of a broader development program. 
  • Charity Donations: A meaningful reward, this allows employees to contribute to a cause they care about. By donating to a charity on behalf of the employee, the organization demonstrates its commitment to social responsibility and provides employees with an opportunity to make a positive impact beyond the workplace. When employees know that their efforts are not only benefiting the organization but also making a difference in the lives of others, it can foster an additional sense of pride and purpose in their work.
  • Additional PTO: A program like this recognizes employees' hard work and provides them with much-needed rest and relaxation. It acknowledges the importance of work-life wellness and supports employee wellbeing, which can boost job satisfaction and productivity.
  • Local Goodies: Localizing your rewards is a thoughtful gesture that recognizes and celebrates employees' unique contributions. It promotes a sense of belonging and connection to their community, fostering positive employee engagement and loyalty. It adds a personal touch to the reward program and allows employees to experience and enjoy flavors, crafts, or products unique to their region.
  • Written Recognition: Never underestimate the power of a handwritten thank you note. This can be done through team meetings, personalized thank-you notes, or in company announcements. It can be a great way to acknowledge specific achievements and contributions of employees, highlighting their value to the organization. Written recognition also serves as a lasting reminder of their hard work and can be shared with others, boosting their professional reputation and sense of pride. 
  • Employee of the Month/Quarter/Year: An employee recognition program where outstanding performers are selected and honored on a regular basis provides a consistent opportunity to recognize employees. This can be accompanied by certificates, trophies, or plaques. This highlights an employee’s achievements in a public setting and establishes them as role models within the organization.
  • Public Appreciation: Achievement acknowledgment doesn’t have to stay in-house. You can publicly recognize employee achievements in company newsletters or social media platforms. This highlights the great work being done in your organization while holding up your top talent as an asset to the industry.

Regardless of the specific rewards offered, authenticity is a crucial element that should underpin any employee recognition program. An authentic show of gratitude goes beyond just checking boxes or going through the motions. It involves genuinely valuing and appreciating employees' contributions and achievements. Involving employees in the design and implementation of the rewards program can help you build an authentic rewards program. It enables you to better align the initiative with their needs and desires, and shows that employee feedback shapes the company’s activities. 

Support The Performance of Every Employee

A rewards program is a great way to recognize and encourage quality work, but it’s not the only way to improve employee performance. Benefits are another powerful lever — 73% of employees whose benefits were updated said their performance improved — and research shows wellness programs especially can have a sizable impact on the quality of work people produce. 

Nearly 9 out of 10 companies that track spending on employee wellbeing see a clear improvement in employee engagement, customer satisfaction, and profitability. If you’d like to support employee performance with a wellness initiative, speak with a wellbeing specialist today about how Wellhub can help!




Wellhub Editorial Team

The Wellhub Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.


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