How Can Meaningful Rewards Transform Employee Motivation and Engagement?

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Imagine this: You spend weeks on a project that gets your company out of a bind. Leadership congratulates you and announces their intentions to shower you with rewards. Then, when the day comes for your recognition, you receive… a gift card. Three years later, that gift card gathers dust in a drawer full of gift cards. Why? Because gift cards were never what you really wanted. When managers get rewards wrong, it can backfire. If it happens repeatedly, employees might start doubting the manager’s intentions. Unaddressed, those feelings can intensify into resentment, chipping away at morale, motivation, engagement, and relationships. A gift card, or any other reward without meaning, will not make that better. In fact, it might trigger an exit and the loss of a great talent for that company.

Knowing and implementing rewards that employees truly value, on the other hand, can be the difference between keeping good people and losing them. Meaningful rewards can transform the workplace. As the global head of talent at a previous organization, I had a front-row seat when the new CEO implemented a fresh approach connecting high performance with recognition and rewards. He started with what he called the “First Annual CEO Award” and selected 100 recipients at every level of the company from around the globe for a monetary reward and a personalized, hand-signed letter from him. Emails of thanks poured in. The monetary reward was modest but unadjusted for currency, so for some recipients, it was life-changing. Most expressions of appreciation, however, were for the handwritten letters and the organizational visibility. That First Annual CEO Award ended up being an organizational game changer.

Initiate a Dialogue

Individuals are unlikely to say to their manager, “This is how I like to be recognized,” and few managers ask employees, “What rewards would you appreciate?” These conversations are missed opportunities to identify rewards guaranteed to motivate. By starting a conversation and being willing to learn, anyone at any level of leadership can be a changemaker within their organization. Surveying employees or having one-on-one discussions can unveil a wealth of insights into what truly motivates each person. Managers need to be proactive in creating a culture of openness where employees feel comfortable sharing their preferences and expectations.

When managers initiate a dialogue, they not only uncover individual preferences but also demonstrate that they value their team’s input. This fosters a sense of trust and belonging, making employees feel seen and heard. An open conversation about rewards can prevent the misalignment that often leads to dissatisfaction and disengagement. It can reveal preferences for different types of recognition, providing the necessary data to tailor rewarding experiences that will resonate deeply with employees. This process of engaging with employees about their preferred rewards can itself be motivating, as it signals respect and appreciation for each person’s unique contributions.

Incorporate Personalization Thoughtfully

For the colleague who values cash, increase the gross value for taxes, so they can truly use the full amount of the bonus. But also consider rewards for the employee who values recognition: a special “reserved” parking spot for the quarter or an “employee of the month” award with both verbal praise and a plaque or office signage. Some employees might find tremendous value in professional development opportunities like attending conferences or obtaining certifications. Tailoring rewards to individual preferences ensures that each person feels genuinely appreciated and recognized in ways that matter most to them.

Once we know what employees value, we can make a plan to intentionally integrate those preferences into our rewards approach to keep them motivated. The personalization of rewards acknowledges that employees are unique individuals with different needs and aspirations. This can lead to higher job satisfaction and engagement. For example, an employee who values work-life balance might appreciate additional paid time off, while another who is career-focused might value mentorship opportunities. Understanding these diverse needs allows organizations to design a more inclusive and effective reward system.

Maintain Element of Surprise

A reward is no longer a reward once it becomes an expectation. One organization where I worked always delivered flowers to celebrate birthdays, so on my birthday, I knew to expect flowers, which was less and less exciting every year (albeit always appreciated). To maintain the delight employees experience with each reward, put in an effort to keep it unexpected, fresh, and exciting. This can be achieved by varying the types of rewards and not sticking to a predictable schedule. Spontaneous reward acts can make employees feel in-the-moment appreciation, enhancing their connection and loyalty to the organization.

The element of surprise is crucial in maintaining the excitement and impact of rewards. It can transform an ordinary day into a memorable experience, reinforcing positive behaviors and boosting morale. Organizations might consider randomizing some rewards, offering them unexpectedly to highlight exceptional work or dedication. Recognizing employees in this manner can sustain enthusiasm and drive, as employees constantly strive to go above and beyond, never knowing when their efforts might be spontaneously recognized. This approach keeps the workplace vibrant, dynamic, and engaged.

Meaningful Rewards are Memorable

Imagine this: You dedicate weeks to a project that rescues your company from a tough spot. Leadership congratulates you and promises significant rewards. But on the big day, you receive… a gift card. Fast forward three years, that gift card gathers dust in a drawer full of neglected gift cards. Why? Because gift cards aren’t what you wanted. When managers choose the wrong rewards, it can backfire. If this happens often, employees might start questioning the manager’s intentions. Unchecked, this can lead to resentment, damaging morale, motivation, engagement, and relationships. Meaningless rewards like gift cards won’t solve this problem; in fact, they might provoke departure and result in the loss of valuable talent.

On the flip side, knowing and offering rewards that employees genuinely value can make all the difference in retaining good staff. Meaningful rewards can transform the workplace. As the global head of talent at a past organization, I witnessed the impact when a new CEO introduced a fresh approach to performance recognition. He launched the “First Annual CEO Award,” selecting 100 employees globally for a monetary reward and a personalized letter. The thank-you emails flooded in. Though the monetary reward was modest, its unadjusted currency made it impactful for some. Yet, most appreciation was for the handwritten letters and visibility. The First Annual CEO Award was a game changer for the organization.

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