Reward systems are a means to encourage patronage and hard work. A lot of brands have these reward systems in place to attract new customers and retain old customers. Some businesses also use this method to encourage hard work among their staff.

A customer loyalty program or rewards program is a marketing strategy that rewards loyal customers that frequently engage with a brand.

By rewarding recurring engagement, you can increase customer loyalty and ensure continuous growth for your business. The idea behind an effective loyalty program is that the more loyal customers are, the more rewards they’ll get.

Employee reward systems refer to programs set up by a company to reward performance and motivate employees on individual and/or group levels. They are normally considered separate from salary but may be monetary in nature or otherwise have a cost to the company.

While previously considered the domain of large companies, small businesses have also begun employing them as a tool to lure top employees in a competitive job market as well as to increase employee performance.

• Types of Reward Systems in the Workplace
• What is the Benefit of a Reward System in the Workplace?
• What is the Benefit of Customer Loyalty Program
• How can Reward System be Effective?
• Why is it Important to Reward Students?
• What Are The Positive Effects of Giving Rewards to Employees?
• What is The Importance of The Reward And Recognition System?
• How do You Measure The Success of a Reward System?
• Benefits of Reward System for Employers
• Benefits of Reward System in Classroom
• Advantages And Disadvantages of Reward System For Employees?
• What Kind of Rewards Would You Like to Receive in an Organization?

Types of Reward Systems in the Workplace

There are a number of different types of reward programs aimed at both individual and team performance.

Variable Pay

Variable pay or pay-for-performance is a compensation program in which a portion of a person’s pay is considered “at risk.” Variable pay can be tied to the performance of the company, the results of a business unit, an individual’s accomplishments, or any combination of these.

Read Also: Credit Cards With Rewards Systems

It can take many forms, including bonus programs, stock options, and one-time awards for significant accomplishments. Some companies choose to pay their employees less than competitors but attempt to motivate and reward employees using a variable pay program instead.

Good incentive pay packages provide an optimal challenge, one that stretches employees but remains in reach. If too much is required to reach the goal, the program will be ignored.

Bonuses

Bonus programs have been used in American business for some time. They usually reward individual accomplishment and are frequently used in sales organizations to encourage salespersons to generate additional business or higher profits. They can also be used, however, to recognize group accomplishments.

Indeed, increasing numbers of businesses have switched from individual bonus programs to one which rewards contributions to corporate performance at group, departmental, or company-wide levels.

According to some experts, small businesses interested in long-term benefits should probably consider another type of reward. Bonuses are generally short-term motivators. By rewarding an employee’s performance for the previous year, they encourage a short-term perspective rather than future-oriented accomplishments.

In addition, these programs need to be carefully structured to ensure they are rewarding accomplishments above and beyond an individual or group’s basic functions. Otherwise, they run the risk of being perceived of as entitlements or regular merit pay, rather than a reward for outstanding work.

Proponents, however, contend that bonuses are a perfectly legitimate means of rewarding outstanding performance, and they argue that such compensation can actually be a powerful tool to encourage future top-level efforts.

Profit Sharing

Profit sharing refers to the strategy of creating a pool of monies to be disbursed to employees by taking a stated percentage of a company’s profits. The amount given to an employee is usually equal to a percentage of the employee’s salary and is disbursed after a business closes its books for the year.

The benefits can be provided either in actual cash or via contributions to employee’s 401(k) plans. A benefit for a company offering this type of reward is that it can keep fixed costs low.

The idea behind profit sharing is to reward employees for their contributions to a company’s achieved profit goal. It encourages employees to stay put because it is usually structured to reward employees who stay with the company; most profit sharing programs require an employee to be vested in the program over a number of years before receiving any money.

Unless well managed, profit sharing may not properly motivate individuals if all receive the share anyway. A team spirit (everyone pulling together to achieve that profit) can counter this—especially if it arises from the employees and is not just management propaganda.

Stock Options

Previously the territory of upper management and large companies, stock options have become an increasingly popular method in recent years of rewarding middle management and other employees in both mature companies and start-ups.

Employee stock-option programs give employees the right to buy a specified number of a company’s shares at a fixed price for a specified period of time (usually around ten years). They are generally authorized by a company’s board of directors and approved by its shareholders.

The number of options a company can award to employees is usually equal to a certain percentage of the company’s shares outstanding.

Like profit sharing plans, stock options usually reward employees for sticking around, serving as a long-term motivator. Once an employee has been with a company for a certain period of time (usually around four years), he or she is fully vested in the program.

If the employee leaves the company prior to being fully vested, those options are canceled. After an employee becomes fully vested in the program, he or she can purchase from the company an allotted number of shares at the strike price (or the fixed price originally agreed to).

This purchase is known as “exercising” stock options. After purchasing the stock, the employee can either retain it or sell it on the open market with the difference in strike price and market price being the employee’s gain in the value of the shares.

Offering additional stock in this manner presents risks for both the company and the employee. If the option’s strike price is higher than the market price of the stock, the employee’s option is worthless. When an employee exercises an option, the company is required to issue a new share of stock that can be publicly traded.

The company’s market capitalization grows by the market price of the share, rather than the strike price that the employee purchases the stock for. The possibility of reduction of company earnings (impacting both the company and shareholders) arises when the company has a greater number of shares outstanding.

To keep ahead of this possibility, earnings must increase at a rate equal to the rate at which outstanding shares increase. Otherwise, the company must repurchase shares on the open market to reduce the number of outstanding shares.

One benefit to offering stock options is a company’s ability to take a tax deduction for compensation expense when it issues shares to employees who are exercising their options.

Another benefit to offering options is that while they could be considered a portion of compensation, current accounting methods do not require businesses to show options as an expense on their books.

This tends to inflate the value of a company. Companies should think carefully about this as a benefit, however. If accounting rules were to become more conservative, corporate earnings could be impacted as a result.

What is the Benefit of a Reward System in the Workplace?

Companies that cultivate a culture of rewarding and recognition enjoys promising results from engaged and productive employees. A good reward and recognition system will not only show that the company appreciates the efforts of its employees. It will also value them because they are a part of the company.

Though at times the two terms are used interchangeably, they have different meanings. Rewards tend to look at the tangible motivation given to employees for good work. This can include things like gift cards, perks, etc.  However, recognition is intangible benefits reaped for good performance like a congratulatory note from a boss, a standing ovation at work, the employee of the month sticker, etc.

Increase Productivity

Rewarding and recognition tends to increase employee productivity in the workplace. It makes them go the extra mile. Engagement at work stimulates teamwork spirit and acts as a catalyst for high performance. Make sure that you reward and recognize your team timely.

Stimulates Development and Career Progression

Employees tend to do more when they are recognized and rewarded for good work. It encourages development and career growth since it puts the employee in the position to do more and elevate their work performance. It gives employees morale to do more and exceeding the expectations the company has on them.

Brings a Sense of Satisfaction & Builds Morale

Reward and recognition cultivate a positive relationship between employers and employees. The employer will benefit from a satisfied employee delivering good results. On the other hand, a recognized and rewarded employee will become confident and satisfied with their work. Enhancing employee morale can contribute to lowering the turnover rate.

Enhances Teamwork Spirit

There is a say that if you want to go fast go alone but if you want to go far go together. It is known that teamwork is a better way of achieving goals faster than “working in a solo” mentality. When employees are given the chance to recognize their colleagues for good performance. It further encourages friendships and positive work relationships. A healthy competition among employees is good for business.

Creates a Strong Employer Brand

Employees talk and share experiences with those of other companies. A company that recognizes and rewards employees builds a positive brand when its employees talk positively about it.

Organically, the company becomes recognized for its best HR practice and this can impact the way it works with external stakeholders. The company that recognizes and rewards its employees will not only be known for its productivity but also for its good leadership and people management skills

Attracts Potential Candidates

Jobseekers like to work for a good workplace and one that recognizes and rewards its employees. Rewarding and recognising the achievements of employees will attract high potential candidates.

If you haven’t come up with a good reward and recognition system, develop and implement one today and enjoy the benefits of a productive and engaged workforce.

What are the Benefit of Customer Loyalty Program

Loyalty programs have been given new recognition in recent years for several reasons. First, because customer loyalty programs have a variety of benefits for companies, but also because they have become an expected part of the consumer experience.

However, in today’s market, simply having a traditional loyalty program is not enough. In fact, a 2015 survey found that 42% of Americans will stop shopping with a brand that they are loyal to after two bad experiences.

In order to increase loyalty program ROI and overall consumer retention, companies have taken to expanding their loyalty rewards to incorporate social and behavioral actions, such as referral rewards and points for user-generated content, while also attempting to provide their customers with a more personalized experience. The expansion depends on a combination of careful planning and the right customer loyalty software.

1. Increase revenue: Increasing customer retention helps boost profits simply because loyal customers already have trust in your brand and therefore are likely to spend more. According to the research referenced above, increasing retention by just 5% through customer loyalty programs can boost revenue by 25 to 95%.

2. Save money: While creating and implementing a loyalty program is an investment, customer retention strategies are often less expensive than attracting new customers. Acquiring new customers can be 25% more expensive than retaining current customers.

3. Gather valuable data: Most modern consumers prefer a personalized experience, with more than half of Generation K and Millennials reporting personalization as a high priority.  By encouraging your customers to fill out profiles as part of your loyalty program, you can get the data so you can not only personalize the customer experience, but to also create targeted marketing campaigns, increase your bond with customers, and even implement your referral program.

4. Make consumers feel appreciated: A comprehensive, personalized loyalty program will make your customers feel like they have an emotional connection with your brand and will increase customer patience in case of mishaps. You can increase appreciation by incorporating “surprise and delight” points or rewards for special occasions such as a customer’s birthday.

5. Increase sales: By personalizing the consumer shopping experience through gathered data, you can make better suggestions to your customers, which will then increase the likelihood that your customers will purchase a suggested product.

6. Measure loyalty through engagement: Program data allows you to track analytics and view reports, measuring the efficacy of customer loyalty on your sales. Measure important retention metrics like program engagement, repeat customer rate, and purchase frequency.

7. Better communication: Loyalty programs give you a direct way to communicate to customers, which can be particularly useful in an emergency such as a recall. By matching purchase dates, you can email relevant customers about a recalled product instead of sending out a generalized email which will be ignored. In addition, you can utilize your loyalty program to promote sales, special events, and showcase new products.

8. A good program is self-sufficient: While it takes a bit of work to structure a strong loyalty campaign and to find the software that fits your needs, the program itself is self-sufficient. While it is advised that you monitor its metrics, the program will continue to run on your chosen settings.

9. Attract new customers: A good rewards program can attract new customers in several ways. First, if you offer points or discounts for a signup, you will automatically be able to add new customers to your mailing list simply because customers want to take advantage of discounts. Meanwhile, if a customer sees a good loyalty program where rewards are within reach, they are more likely to try your brand simply because the rewards are easily accessible.

On the other hand, customers who are satisfied with your brand may share their experience with friends even without a referral program. Of course, it is fairly easy to incorporate your loyalty and referral rewards into an omnichannel platform in order to further boost referrals and attract new customers.

10. Plenty of room for growth: A good loyalty program doesn’t need to be stagnant. While loyalty programs are fairly self-sufficient, you can also change and improve your loyalty program by incorporating even more marketing aspects, including referral marketing and visual commerce.

For instance, if your company needs a stock of customer photos featuring a new product, your loyal customers will be your go-to source. After all, who better to promote your brand in a photo than someone who is already familiar with your products?

By creating a comprehensive loyalty program that allows for modern marketing techniques, you can turn your customers into advocates for your brand. Since modern consumers trust peers over advertising, fostering loyal customers who will then speak out on your behalf is simply a smart business move.

While loyalty programs do take a bit of work and planning, they are certainly worth implementing and will help ensure future business success.

How can Reward System be Effective?

Seeking to increase employee motivation using rewards can sometimes be a daunting task for managers. But it shouldn’t be. When armed with the right information and the proper techniques, as well as industry-leading cloud call center software, managers can be experts at enhancing motivation using rewards in no time.

Managers who are developing, revamping or currently implementing an employee rewards program should consider these tips:

1. Involve all employees in the development, implementation and revision of rewards programs

Involving all employees (or representatives from different positions) will encourage communication between employees and management about the rewards process. It will also ensure that both employees and upper management are onboard with the reward system.

2. Ensure that employees view the rewards as worth the effort

Including employees in the reward program development process is critical to ensuring that they value the rewards and see them as worth the effort. Managers should value employee input and select rewards accordingly. Employees who see the rewards as worth the effort will be more motivated to work hard to obtain them.

3. Make sure that employees understand how to earn the rewards

Managers should clearly delineate how employees can earn rewards. When employees have a comprehensive understanding of what is expected of them, they will be more capable of achieving performance standards.

4. Set reasonable and transparent performance standards for rewards

Employees must see the rewards as attainable in order for them to engage in the necessary effort to obtain them. Check-in with employees to ensure that they believe the rewards are within their reach. Also, providing the employees with a dashboard where they can view their performance in real-time will allow them to accurately assess their own performance and have realistic expectations for rewards.

5. Base reward determinations on objective performance data

When rewards are distributed based on objective data, employees are more likely to view the process as fair and are also more likely to have a concrete understanding of what is expected of them. This will increase their motivation to achieve the desired performance results.

6. Make sure employees view the reward system as fair

When employees view the reward system as fair, they will be more engaged in trying to obtain the reward. Rewards should be distributed consistently according to pre-determined policies. Never engage in favoritism or cut corners as this will have a detrimental impact on employee performance.

7. Always link rewards to performance

In order for rewards to have the most impact on influencing employee performance, they must be directly linked to the desired behavior. Tie praise, recognition, cash rewards and non-cash rewards to specific results. When employees understand the connection between their reward and their performance, they will be motivated to perform optimally in the future.

8. Recognize small and large accomplishments

Employees should be rewarded when they meet large goals as well as smaller milestones. This will ensure that they receive recognition for their progress and that their behavior is consistent with company expectations.

9. Reward teamwork and cooperation

Team-based incentives were found to be more effective at increasing performance than individual incentives. If team-based rewards are not already included in the company strategy, they should be. Additionally, the resources devoted to team-based rewards should be substantial. This could have a significant impact on cooperation, employee cohesiveness and the company’s bottom line.

10. Never take a good performance for granted

It can be easy to stop rewarding top performers, but this could be a fatal flaw. In order to keep top talent on the team, ensure that your company continues to acknowledge and reward an excellent performance.

11. Provide rewards immediately after the employee achieves the desired behavior

There is a temporal component to the effect of the reward. The longer the delay in providing the reward after the employee’s achievement, the less of an impact it has shaping subsequent behavior. Reward behavior that meets performance standards immediately.

12. Match the reward to the employee

Allow each employee to select their own reward or decide what rewards employees should receive under predefined circumstances. This will enhance their commitment to achieving the reward by engaging in the required behavior. Understanding the needs of employees is central to this process.

Of note, the reward that each employee wants may not necessarily be the reward with the most motivational influence. A recent study found that the majority of employees prefer cash rewards; however, many employees will perform better in pursuit of non-cash rewards of similar value (Jeffrey).

Managers seeking to gain the biggest impact from their rewards programs should include both cash and non-monetary rewards for performance.

13. Offer financial rewards, non-monetary rewards and recognition

Reward systems that include a combination of cash and non-monetary rewards as well as social awards (e.g. recognition and praise) have the greatest impact on employee performance. Pay cash bonuses in a lump sum to maximize their effect as money only motivates when it is a significant amount.

14. When employees learn an unfamiliar task, distribute rewards based on a continuous reinforcement schedule

The most effective way to encourage learning a new task is by reinforcing employee behavior on a continuous schedule. This can require considerable effort when executed by a manager, however, using an employee reward software program is a more feasible and cost effective solution.

15. Once the behavior becomes a habit, distribute rewards based on a variable ratio or variable interval schedule

Variable ratio and variable interval schedules of reinforcement result in the most significant behavior change once the behavior becomes a habit. This change in behavior is also more resistant to weakening. Therefore, one of these reinforcement schedules should dictate the reward distribution process after the behavior has become a habit.

16. Do not disclose the cash value of non-monetary tangible rewards

Employees who are unaware of the exact cash value of non-monetary rewards are more motivated by them. Do not disclose the amount unless necessary.

17. Use long-term rewards programs

Long-term rewards programs have the greatest effect on employee performance and the resulting gains last longer.

18. Balance competitive reward programs with non-competitive programs

Competitive incentive programs are just as effective as non-competitive reward programs in increasing performance. An effective rewards strategy should include both.

19. Make rewards an integral part of the company’s strategy

Rewards are invaluable in aligning employee behavior with the organization’s business strategy. Ensure that rewarded behavior is in line with company standards, objectives and strategy.

20. Change the rewards frequently

When the reward is changed frequently, employees will be more surprised and the process will be more exciting. When employees are excited about rewards, they will work harder to achieve them.

Why is it Important to Reward Students?

Whether we like it or not, humans need motivation. As we mature, most of us become intrinsically motivated. This means that we can motivate ourselves from within based on internal desires to do something — such as reading because you genuinely enjoy it and not just because you’re told to, or because you want to appear smart to your peers.

This is a tough concept for little kids and even some adults. After all, many people would not work if it weren’t for what they receive at the end of the week: a paycheck.

Although it’s good to encourage students to become intrinsically motivated, it’s also worth noting that extrinsic motivators are important, too. It will save your sanity to accept that external rewards such as money, grades, prizes, and praise will drive most of their behavior.

1. Appropriate behavior

Students conform to appropriate behaviors when rewarded either intrinsically or extrinsically.

2. Increased motivation

Students will show interest and raise their participation in the everyday classroom tasks, responsibilities and learning.

3. Joyful students

Incentives for students motivate them to be more productive because they create a feeling of pride and achievement. Being successful makes you happy.

4. Boosted self-esteem

Every success story helps students become more self-confident. They are proud and also encouraged to achieve another successful result.

5. Completed homework

The National Association of School Psychologists suggests that reward systems help motivate students to complete their homework. It’s rather shocking that without rewards, students don’t complete it.

6. Improved results

Rewarding students encourages and endorses school effort. They lead to improved outcomes for students.

10 Reasonable rewards

When you choose a reward for your students or when you let them choose, make sure you are controlling it. Give them a list to choose from, or add a value to each reward. That way, students have to save their tickets, cards, etc., in order to choose a good reward.

Here are a few reward examples:

1. Pick a game at recess
2. Sit with a friend
3. Teach the class a favorite game
4. Take a homework pass
5. Be the teacher’s helper for the day
6. Draw on the chalkboard
7. Choose any class job for the week
8. Use the teacher’s chair
9. Take home a class game for a night
10. Do half of an assignment

These are just a few suggestions.

Online reward system for primary school

When it comes to class management in primary school you must have already heard of ClassDojo. If not, don’t worry.

ClassDojo is a free digital reward system in which every student gets evaluated on positive and negative behavior. Not only the teacher has access to ClassDojo, also the students and their parents can access the platform by entering a unique code.

As a teacher, you set up some “behavior tags”. A behavior tag consists of a description and an icon. You can add icons with a description of your own. Choose a description for the positive behavior tags and a description for the negative behavior tags.

Positive behavior gets the value “+1” and negative behavior gets “-1”. The teacher assigns the positive and negative behavior icons to the students.

When the class or week ends, you can take a look at the overview of the behavior icons you assigned to your class. You can check out the student individually or the whole class. You can also add a comment for the student’s parents.

With ClassDojo students can keep their own digital portfolio. Students can add pictures and videos of work to their Story, and share it with their parents.

Read Also: Why do People Use Debit Cards Instead of Credit Cards?

The fun thing about ClassDojo are their little monsters. Every student is a different monster. It’s very visual and funny!

How to put a reward system to work

School reward systems can help, but you can’t just try out something without clearly thinking it through. Here’s how you best put a reward system to work.

1. Set class goals

Set class behavior goals that are achievable and measurable. For example: when you raise your hand, all the students stop talking within 20 seconds. Let your students participate in setting up those goals. It will motivate them more to abide by the rules.

2. Define how you will use the reward system

This is the key to success. When are students receiving rewards? What are your boundaries? Make your intentions clear. For example: students will receive a reward when they help another student, they finish homework a day early, when they participate in class.

3. Explain why you gave a reward

Give your students specific, genuine feedback attached to the reward. For example: “John, you showed respect by letting Marc in before you”.

4. Give students a voice

Like I’ve said before, it’s important to let your students participate in choosing rewards. To be sure that rewards are valuable and motivating for the students, you can have a brainstorm about it. Let them put together a list of acceptable rewards. You still have the final word!

5. Reward early

Just like giving feedback, rewards must be given shortly after the shown behavior. In that case, students won’t forget what they did to deserve it and other students won’t get suspicious.

6. Lessen the rewards over time

Raise your expectations for the student’s behavior in order to receive the same reward. Students shouldn’t get addicted to rewards. They have to work because of an intrinsic motivation. As students achieve success in your class, they can learn to be motivated by their own achievements.

7. Give random rewards

Rewarding students randomly for their behavior and achievements keeps them on their toes. They’ll want to be on task just in case!

What Are The Positive Effects of Giving Rewards to Employees?

Rewards are a powerful method for encouraging good job performance. Good work may not be repeated and employees can upset customers when managers don’t recognize, encourage, and reward them for job performance that meets or exceeds customers’ expectations.

Rewarding employees for their job performance that meets or exceeds customer expectations is important because:

• It tells employees what standards their job performance must meet.

• When employees know that customers expect a particular level of performance, they’ll be more cooperative about performing at that level than if a performance standard seems to be based on a manager’s whim.

• Rewards improve employee job performance.

• The need to discipline employees is reduced because employee job performance meets customer expectations more often. This creates a more pleasant work environment for managers and their employees.

• Customers’ expectations are more likely to be met by employee job performance even when a manager isn’t present.

What is The Importance of The Reward And Recognition System?

Only one in three workers strongly agree that they have received a form of recognition or praise at work in the last week. In any work environment, it is very common for employees to feel ignored and underappreciated. This is even when they have gone above and beyond expectations.

For many employees who don’t feel adequately recognised, they are more likely to quit their job within a year.

With this being said, employee reward and recognition one of the largest missed opportunities amongst managers and leaders. Not only does it motivate your team, but it also provides them with a huge sense of accomplishment.

When employees feel truly valued for their work it will boost individual engagement and improve their loyalty to the business. Retaining members of staff is one of the biggest advantages to running a recognition and rewards programme in your workplace.

The knock-on effect of recognition is also considerable.

It sends messages to other employees about what success really looks like. Improving the overall culture around the work environment can be achieved by good recognition programs.

How do You Measure The Success of a Reward System?

To adopt a systematic process for evaluating reward program effectiveness, use multiple perspectives and rigorous and consistent processes. Here are some examples of ways to do this:

• Use employee opinion surveys and/or focus groups to understand how employees and managers feel about fairness in the employee reward program.
• Monitor the influence of fairness and equity on employee behavior.
• Assess the operational results that the employee reward program is expected to impact, such as turnover and engagement.
• Calculate the ROI, program costs, and value added by employee reward programs.

When doing these calculations, “there’s a balance between the quantitative and the qualitative measures, and there’s that balance of the perception versus the end results as well.” Amanda Wethington advised in a recent BLR webinar. “When you’re calculating the values of these programs, it’s really going to be a mix of [both], but first you [need] a tool to measure it so you can take a look and really understand how effective your program may be or where you may have some ability to make some improvements.”

These calculations are important because they set a baseline. The ultimate question for organizations is how to increase levels of employee effectiveness and thus profitability.

This is directly impacted by employee engagement, which is in turn directly impacted by the employee rewards program. By measuring and improving your employee rewards program, you will impact profitability.

Benefits of Reward System for Employers

1. Productivity

It’s well-known that engaged staff are significantly more productive, working efficiently and proactively in order to do a good job.  If efforts are likely to be praised and rewarded, then it makes sense that a member of staff will work harder to receive such employee recognition

2. Job satisfaction

Recognising an employee’s efforts demonstrates that the job they’re doing is valuable to the business. It sends the message that their hard work is worth rewarding and therefore must be important. This, in turn, makes the individual feel that they are making a difference.

3. Employee happiness

A happy and fulfilled employee can be motivated to perform better because of the positive feeling they have towards the company.  If an employer treats its staff with respect and gratitude, then those staff members will want to do a good job in return. This positivity can also be felt across the business, creating a happy working environment that people will want to be a part of.

4. Retention

A high staff turnover leads to poor morale that can make others want to look elsewhere. The time required to find and train new staff affects utilization and the fiscal costs are high, so retaining staff has to be a priority. The provision of rewards gives employees a tangible reason to stay.

5. Loyalty

If your employees are engaged with your business, they will be able to promote and sell your brand far better than someone who does not believe in or care about it. Rewarding hard work generates loyalty and helps your team to feel an emotional bond with your organisation.

6. Team culture

Rewards that incorporate peer-to-peer recommendations are great for team spirit, as they encourage staff to see the positive attributes in one another. Teams are well-placed to do this, as they work alongside each other every day. Plus, allowing colleagues to nominate one another for rewards is empowering, as it demonstrates that they value each other’s opinions.

Benefits of Reward System in Classroom

1. Appropriate behavior

Students conform to appropriate behaviors when rewarded either intrinsically or extrinsically.

2. Increased motivation

Students will show interest and raise their participation in the everyday classroom tasks, responsibilities and learning.

3. Joyful students

Incentives for students motivate them to be more productive because they create a feeling of pride and achievement. Being successful makes you happy.

4. Boosted self-esteem

Every success story helps students become more self-confident. They are proud and also encouraged to achieve another successful result.

5. Completed homework

The National Association of School Psychologists suggests that reward systems help motivate students to complete their homework. It’s rather shocking that without rewards, students don’t complete it.

6. Improved results

Rewarding students encourages and endorses school effort. They lead to improved outcomes for students.

Advantages And Disadvantages of Reward System For Employees?

When employees go above and beyond, it seems logical to reward them. Let your staff know that you appreciate exceptional performance or valuable ideas, and they’ll work twice as hard to succeed, right? Sometimes. However, there are drawbacks to incentive plans that can alienate the people under you. Design your program carefully to avoid them.

Advantages

Increased Productivity

Offering additional money or benefits for hitting certain performance milestones is generally an effective way of boosting productivity among employees. While not every employee is going to respond the same way to financial incentives, establishing a structure that recognizes people for delivering tangible results reinforces the idea that good work will be rewarded.

Such systems are easy to explain and treat employees fairly by emphasizing performance over more arbitrary measurement criteria. When rewards and recognition are at the team level, high performers have an incentive to help low-performing teammates to improve, which can boost overall team productivity over time.

Strengthens Succession Pipeline

When employees strive to reach performance incentives, they will often make an effort to improve their skills in the process. Whether they gain these skills through experience or by taking advantage of training programs, development enables them to do their jobs more effectively and put themselves in a better position to reach performance goals.

For the organization, this process is a huge benefit because it can also strengthen the candidate pool for succession situations, preparing high-potential employees even when there may not be an immediate opportunity for advancement.

Encourages Retention

A good incentive program increases employee job satisfaction and overall loyalty to the organization. Structured correctly, it can discourage them from seeking another position elsewhere.

Employees typically look for new employment opportunities when they believe they are under-compensated or unappreciated. Since incentive programs reward performance in tangible terms, these employees are more likely to remain motivated, engaged in their work, and loyal to their employer.

Disadvantages

May Encourage Deception

Results-driven incentives can sometimes get out of control when employees find that their current level of performance is not sufficient to achieve the incentive milestone. In these cases, the positive incentive may become a “negative” incentive as employees look for ways to make their performance appear to be good even though their actual results are not aligned with the incentive target.

An infamous example of this occurred at the Phoenix Veterans Affairs Health Care system in 2014, when VA hospital managers developed an elaborate scheme to falsify patient wait data for more than 1,400 patients rather than allow their poor performance to be reported.

Misaligned Incentives

It’s important that the performance results targeted by an incentive program are properly aligned with the long-term mission of the company. A good incentive program encourages and reinforces behavior that will contribute to sustainable success; a poorly conceived program may incentivize people to engage in risky and irresponsible behavior that actually undermines the organization over time.

For example, throughout the early 2000s, bonuses in the financial industry were tied to short-term objectives that were not in line with a long-term view or the best interests of customers, which encouraged the risky practices that contributed to the 2008 financial crisis.

Monitoring and creating internal controls help to identify such misalignments early so that corrections can be made before problems develop.

Can Lead to Conflict

While incentive programs are fair in the sense that they clearly state objectives anyone can reach, in practice, it’s very easy for employees to become convinced that pursuing incentives is a zero-sum proposition. Either they pursue their benchmarks and gain reward, or they make sacrifices to help others succeed.

This “look out for number one” mentality is common in toxic workplaces where employees feel like they’re in constant competition with one another for a limited share of recognition and reward.

Left unchecked, it can lead to bitter resentment, accusations of favoritism, and sabotaging behaviors that undermine team success in pursuit of individual goals. People may engage in bad behavior for the sole purpose of meeting their performance goal, which can make a tense conflict situation even worse.

What Kind of Rewards Would You Like to Receive in an Organization?

Recognition and rewards will vary from organization to organization, and how you appreciate employees will depend on your unique company needs.

Your team could be motivated by a company-sponsored outing, a thoughtful email, or a gift card to their favorite store. It’s up to you to understand how to most meaningfully appreciate your team members and with what rewards.

Bonuses

There are many types of bonuses, ranging from small to large.

Small bonuses, sometimes called spot bonuses because they’re given “on the spot,” are small monetary rewards given frequently by one colleague to another in recognition of a valuable contribution. Although small bonuses can be given by managers to their direct reports, they can also be given by other colleagues, and even from a direct report to a manager.

Small bonuses provide several unique benefits. Like spot bonuses, staff recognition in the form of bonuses can be given in the very moment that a valuable contribution is made by an employee. Employee recognition given in the moment has the greatest potential for impact, because the action is rewarded almost immediately, when it’s top-of-mind.

Because these bonuses are small by nature, everyone can give them out often, providing multiple positive instances of employee recognition without dramatically altering an employee’s compensation.

Their on-the-spot nature dictates that spot bonuses are given at an irregular cadence, in contrast to annual and quarterly bonuses.

Written praise

Writing thank-you notes can not only show appreciation, but is tangible proof of an employee’s contributions. Written praise is a flexible method of recognition and notes of praise are almost universally appreciated, whether written or sent as electronic communication.

Verbal praise

Verbal praise is perhaps the oldest, and longest-standing form of peer-to-peer recognition in the workplace. Verbal praise is given by colleagues, generally in an ad-hoc fashion, in recognition of a staff member’s valuable contribution.

Although nearly always informal in nature, verbal praise is occasionally solicited as part of a formal staff recognition program.

Conclusion

As we have seen from this article so far, everybody needs motivation, whether they are your customers or worker or even students a reward system is a fine way to do that.