How To Implement An Employee Point Based Reward System


There are several steps to implementing an employee point based reward system. Many studies have displayed a direct correlation between employee recognition and engagement. In fact, Gallup states that low employee engagement costs American businesses up to $370 billion annually. Alternatively, high employee engagement levels significantly increase absenteeism and turnover. As a business manager, point based recognition programs increase productivity by 21% and profitability by 22%. Read on to discover a five step plan for implementing an employee point based reward system.

Understand Difference Between Recognition & Rewards

Understanding the difference between the terms recognition and rewards enables a deeper knowledge of them, allowing you to make higher-quality decisions. Typically, recognition programs revolve around using employees’ skills such as life coach qualifications to increase their productivity. Alternatively, reward programs often use money and other financially-based incentives to reward strong performances. Usually, accumulated point reward programs combine both terms into one strong motivational tool with financial incentives. Surely, understanding the difference between these two terms enables deeper understanding of your reward system, so you make higher-quality decisions regarding it.

Determine Pros & Cons of Points

Second, determine the advantages and drawbacks of basing your reward system around points. For example, points make your reward system simple and easily understood by most employees. However, depending on the values assigned to the points, employees may get confused on their true worth. There are many more pros and cons to basing your reward system around points, and doing so lets you evaluate the system’s fit for your specific business. Absolutely, determining the advantages and drawbacks of a points-based system enables determinations of your business’s unique needs.

Enable Points Tracking

Next, enable points tracking so you can measure various business metrics. Traditional and manual rewards programs often lack a method of tracking metrics like productivity and morale. However, points-based rewards allow employee performance evaluations. In fact, when the rewards are tied to core skills and values, you track the number of times individual employees are recognized for a skill. Additionally, track the amount you spend on tangible rewards and metrics such as retention and absenteeism. This way, you see the impact the rewards program has on these metrics. Certainly, enabling points tracking allows recognition of several important metrics.

Communicate Perks

Communicate the perks and rewards employees can spend their points on to maintain the system’s effectiveness. If employees are accumulating points but don’t have anything to spend them on, they never see a true reward. The points become meaningless as a result. Reiterate the program’s implementation and the available rewards to perpetuate its longevity, maximizing its productivity and engagement benefits. Definitely, frequent reminders of the program’s existence and the rewards available gives the points meaning and maximizes the program’s benefits.

Consider Unorthodox Items to Reward

Lastly, it’s time to start the points awarding process by rewarding teams as well as individual behaviors. While rewarding substantial achievements such as sales goals and customer retention, consider some unorthodox reward requirements as well. Recognition for minor behavioral changes such as being consistently on time or reducing mistakes often encourages middling employees to improve. Additionally, rewarding whole teams for great performances typically fosters better collaboration. This way, you maximize the reward system’s potential by applying it to specific situations. Of course, considering unorthodox achievements to reward significantly increases the productivity and engagement benefits of your system.

There is a myriad of methods for implementing an employee point based reward system. One method involves understanding the terms reward and recognition as the first step to increase knowledge and maximize the quality of your decisions. Second, determining the pros and cons of basing the system around points lest you evaluate the system’s fit for your specific business. Third, enable tracking of the points to display several crucial metrics like absenteeism and retention as they relate to your system. Next, communicate the rewards company departments can spend their points on frequently to maintain the points’ value. Finally, consider some unorthodox items to reward so the productivity and engagement benefits of the system reach all aspects of your business. When wondering how to implement an employee point based reward system, consider the steps outlined above.

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