Just offering a standard benefits package is not always enough of an effective motivational tool. Sonia Rach looks at instant rewards and how employers can make them really work


It’s often said that a ‘thank you’ is one of the most powerful forms of reward. Certainly, backing up ‘thank you’ with an on-the-spot reward, such as a gift voucher or experience, can be even more effective. More employers are recognising the impact this can have on productivity but there is still a large number of organisations that aren’t – and are losing valuable staff as a result.

Saurav Chopra, chief executive and co-founder of Perkbox, is concerned. He says: “There’s a hole in terms of reward recognition, despite instant reward being an obvious driver of employee motivation.”

Following the recent change in the National Living Wage, many companies have either reduced some of their benefits or added a probationary period that has, in effect, made this ‘hole’ deeper.

So how is it supposed to be tackled? While many organisations offer standard benefit packages and pensions, something more personal needs to be done to acknowledge an employee’s achievements.

So if a staff member reaches a target or expectation, how do you reward them? Expecting a person to remain motivated throughout the year or even the month until they receive their bonus is often not enough. Research has found that those who are recognised for their efforts and rewarded instantly, whether through a verbal thank you or some type of tangible gift, are more likely to remain engaged and do it again.

Valued by employees

While employers and HR managers can easily implement reward schemes, it is just as important that they are valued by staff.

Bill Alexander, chief executive and director at Red Letter Days, explains the importance of involving staff in the process. “Getting employees to be a part of it when trying to introduce a new scheme works really well, as it allows them to have their input. The problem with getting staff involved is that they’ll always say they want cash rewards, but all the evidence is there that shows that cash is not as effective as something tangible.

“If you give cash to people, they never talk about it, you can’t really present it and it gets lost in the payroll.”

Equally, line managers play just as important a role in to how staff recognise the reward. Offering products or vouchers are the better option, as long as they are relevant. “I think executing the reward, in terms of involvement, should ensure line managers are the deliverers of the scheme, whilst HR and senior management should be the facilitators,” says Declan Byrne, managing director at One4all.

“When you’re doing small, instantaneous rewards, it is essential that the reward is structured properly.”

As Byrne says, delivery and communication are key. The golden rule when implementing a scheme is to ensure that everyone is clear about what the organisation is trying to achieve. Companies often implement an idea, but as the goals are not clearly communicated, managers and HR are unable to support it – and employees are left in the dark about what benefits they have and how they can use them.

A survey by Red Letter Days recently found that only 25% of staff receive a verbal thank you, despite it being the second most preferred form of acknowledgement among employees.

Chopra reinforces the importance of communicating to the employee and the impact that this has. “The first step of rewarding an employee is verbally. We then send out a notification to the employee, followed by a physical reward. It is important to shout about it and sing an employee’s praises – all of this contributes to boosting employee morale, engagement and motivation.”

Getting the amount right

Tackling the big question about ‘how much is too much’ is another factor to consider. Alexander explains that getting the amount and frequency right all comes down to the organisation’s initial purpose.

“Usually, a company wants to enforce its values, and offering reasons to adopt them through instant reward.

“People are not going to be doing it every single day, so it will be limited and managers should be given discretion, and a budget to work with.”

Ensuring that both senior members and line managers understand the aims, objectives and goals will ensure that the instant rewards are managed.

One4All’s Byrne agrees. “I think the reality is that there has to be a definite protocol as to when you award an activity. The issue with regular reward is that people start to reward for day-to-day activity, so you have to have a strict protocol around your rewards programmes to ensure that when people receive it, they know that they’ve received it for an extra activity or effort.

“The amount of the award is quite important and if you’re doing very irregular small rewards we advise employers to use the likes of the reward card as opposed to specific digitalised gift cards as the mechanism.”

Once that’s done, justifying the cost and understanding the return on investment is the final stage of putting a scheme in place.

Building the case

According to Perkbox, 60% of employees and employers agree that not enough is being done in the space of instant reward. Additionally, only 14% of organisations have actually implemented a reward programme. The impact of this on the UK economy is a factor in the development of an absenteeism crisis.

Through ‘sickies’ or just days off, businesses are losing 6.9 days a year per employee and it is costing the economy an estimated £100bn, according to a recent study by Catapult, a hiring platform. It appears that this is having a direct impact on productivity levels and engagement overall.

Byrne says: “The strong thing about instantaneous reward is the continual assessment, rewarding people very soon after the action they have taken, as opposed to a traditional end-of-year bonus whereby the action is very distant in the memory.”

Having implemented a similar scheme in his own company, Perkbox’s Chopra agrees, and justifies why other employers should, too. “In terms of return on investment, if you have an effective reward and recognition system in place, it will pay for itself many times over. There will be a definite increase in employee productivity, employee morale, fewer sick days and lower staff turnover – all issues that are having an impact on organisations in the UK.”

Despite being an additional cost, the reward sector industry remains positive about the impact it will have. Referring to it as a “broader challenge”, Chopra says: “Reward and recognition systems are not necessarily being embraced as quickly as they need to be – especially in sectors where they will have the most impact.”

Red Letter Days’ Alexander, agrees, adding: “Reward schemes will improve the bottom line, even if you haven’t got the cash. Duvet days, an extra day’s holiday or a ‘go home early’ day are just a few effective instant rewards.”

For many cash-strapped employers, there is an argument that this is a cost-efficient strategy in the long run. As an effective substitute to a cash bonus or standard benefits, it helps to make employees feel valued.