Fostering Employee Engagement And Performance With Employee Rewards

Looking to build a recognition program that aligns with company goals? There’s a perfect solution for you.

February 20, 2024
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As the piano is seemingly useless without responsive keys, even in the hands of a professional pianist, every company's success largely depends on responsive employees. 

And how do you keep your workforce responsive? Engagement and rewards! 

Employee rewards are at the heart of employee engagement and motivation. According to Quantum Workplace Research, one of the primary reasons employees leave their jobs is due to a lack of recognition, and organizations with recognition programs have 31% higher staff retention rates than those without.

Humans typically need validation, acknowledgment, and recognition of their hard work. Therefore, rewards incentivize us to achieve more, and this principle also applies to the workplace. 

However, workplace reward programs go beyond monetary incentives. They include recognition, appreciation, and opportunities for growth. The result is remarkable when you consciously recognize the commitment and quality work put in by employees. Employee rewards are an effective means of guaranteeing job satisfaction and high morale.

In this article, we'll discuss the significance of employee rewards. We’ll also highlight the various types of rewards and offer insights into developing an effective rewards program.

Let's get started.

Types Of Employee Rewards

We can classify employee rewards in several ways, each bearing one similarity. By understanding reward types, you can learn how to reward employees better and why it's necessary to appreciate them.

Employee rewards are of two main types:

  1. Financial rewards.
  2. Non-financial rewards.

  1. Financial rewards

Financial rewards entail using bonuses, stock options, pay raises, paid time off, and gift cards as motivators. 

Financial rewards are one of the most popular ways of recognizing employees. It's rare to find an employee who isn't excited about receiving a salary increase or paid time off. Traditionally, organizations have distributed financial rewards top-down, with team leaders occasionally providing monetary incentives to their employees.

  1. Non-financial rewards

Intangible rewards are also excellent employee reward ideas. Non-financial rewards are internal motivators. 

They include:

  • Peer-to-peer recognition
  • Public employee appreciation, 
  • Flexible work schedules, 
  • Opportunities for professional development.

Non-financial rewards are also a crucial component of any effective employee rewards system, although they may not be as tangible as monetary rewards. These rewards hold value due to their ability to connect with employees deeply, providing a sense of purpose and fulfillment that employees cannot obtain through other reward types. 

Non-monetary incentives are highly effective in a workplace where employee recognition is a regular and frequent practice for everyone, starting from top-level management. Such a workplace culture can significantly boost employee productivity by encouraging employees to put in their best effort to complete projects within the given deadline.

It is crucial to educate team leaders on the importance of non-financial incentives. Additionally, employees should be encouraged to recognize and appreciate their colleagues whenever they are inclined to do so. The best way to facilitate this is by providing an effective employee rewards platform.

How Recognition And Rewards Impact Employee Engagement And Performance

Recognition and rewards impact employee engagement in various ways, and we’ll highlight a few through recent reports and research. 

A significant correlation exists between employee satisfaction and recognition, per a report by BambooHR. According to another report by Forbes, employees noted that they would work harder if their company leadership acknowledged their efforts. A study by Harvard Business Review also indicates that recognizing employees in the workplace enhances individual and organizational performance. 

In a recent research by WorkTango, 40% of HR professionals surveyed believe that employee recognition fosters employee engagement and that high employee engagement is a potent catalyst for business success.

In summary, employee rewards and recognition influence employee engagement and performance in the following ways:

  1. Increased productivity.
  2. Positive workplace culture.
  3. Retention of top-performing employees. 
  1. Increased productivity 

Employee recognition translates to higher employee engagement among an organization’s workforce. In a study by O.C. Tanner, 37% of employees noted that recognition awards would spur them to produce improved work quality regularly. Employee engagement is vital because it encourages employee teamwork and loyalty by creating a vibrant, goal-oriented, and empowered workforce poised to take on and resolve challenges constructively. 

According to Gallup’s State of the Global Workplace Report, disengaged employees lost $7.8 trillion in lost productivity, equivalent to 11% of the World’s GDP.

The psychology behind employee rewards is such that a behavior publicly recognized and appreciated by company leadership is more likely to be constantly repeated. Hence, when you continually acknowledge your employees' good work outputs, you increase their productivity.

  1. Positive workplace culture 

A recognition program based on company values encourages widespread adoption and practice of company culture

When your employees receive recognition gifts based on your company's culture, it incentivizes them to consistently reflect your company's values in their daily work.

Rewarding employees for demonstrating behaviors that reflect an organization's core principles also encourages them to understand and embody the company culture, leading to a higher connection to the organization. This positivity can then spread to other employees, helping to inspire optimal performance toward achieving company goals. 

  1. Retention of top-performing employees 

Gallup’s recent report showed that organizational turnover is still rising. So, what can you do about it?

Employee motivation not only impacts employee engagement but also boosts an organization’s retention efforts. In a research conducted by SHRM, 68% of HR managers concurred that employee recognition positively impacts employee retention, while 56% of respondents agreed that recognition programs aid recruitment efforts.

Recognition awards increase job satisfaction and reduce employee turnover. When employers publicly acknowledge and appreciate their employees' contributions, they are more likely to retain their staff. 

Formal recognition of employees reinforces the idea that every employee's contribution is essential in achieving the organization's goals. This concept motivates employees to take pride in their work and put in their best efforts. Employee recognition provides a clear sense of purpose, which enhances commitment and leads to better performance.

When a company invests in employee morale, it becomes more appealing to top talents and industry leaders. According to the US Bureau of Statistics, Organizations lose 30% of an employee's first-year earnings when replacing them. Therefore, it makes financial sense for companies to maximize employee rewards and recognition.

Future trends in employee rewards

A robust rewards system is the gold standard for drawing in and engaging highly skilled employees, particularly in a competitive work environment. Thus, to stay relevant, organizations are rapidly adjusting to the emerging trends in employee rewards to cater to the various peculiarities of their workforce.

Rewards trends that are poised to make a sweeping overhaul of the recognition strategies of organizations include:

  1. Personalized rewards.
  2. Wellness incentives.
  3. Technology-driven recognition program.
  1. Personalized rewards

Gallup’s recent data reveals that sincere, genuine, and individualized recognition is the most effective. The one-size-fits-all approach doesn't apply to employee rewards. 

Employee rewards resonate more when they are personalized. Thus, a significant change in employee rewards will be a shift towards personalization. Personalization requires tailoring rewards to meet the unique needs and personalities of employees. 

Personalized rewards can be both financial and non-financial. They include flexible working hours, customized welfare packages, and individualized professional development opportunities. They have immense potential to cultivate a positive workplace atmosphere and promote organizational growth by enhancing employee job satisfaction

Fortunately, the advancements in AI-powered data analytics have made it feasible to implement personalized rewards across the company, which would be a challenging task if done manually. AI-powered recognition tools like Assembly use sentiment analysis to determine the rewards that motivate employees the most. 

Assembly also allows employees to set their individual goals and rewards. Its performance management feature incentivizes employees to complete their goals by automatically activating rewards after they achieve each milestone. Try it Today.

  1. Wellness incentives

Another trend that will characterize employee rewards is prioritizing employee wellbeing. Companies will be looking to offer employees a fully integrated well-being package, combining both conventional health benefits and special health incentives such as mental health aids, economic stimulus initiatives, and work-life balance provisions

Organizations are now incorporating wellness incentives in their recognition programs to promote the well-being of their employees and support the advancement of their rewards programs. This trend is becoming increasingly popular and progressing towards becoming the norm

Employees receive gifts for participating in activities promoting good health, such as regular exercise, healthy eating, yoga, and meditation exercises. Additionally, they obtain incentives such as gym memberships, wellness retreats, mental health days, and wellness bonuses. 

Wellness incentives motivate employees to prioritize their well-being and help employers ensure a healthy workforce.

  1. Technology-driven recognition program

Leveraging technology for employee recognition has resulted in a paradigm shift in how organizations approach employee appreciation. Increasing the automation of employee reward systems brings a wholesome employee experience, cementing recognition as a tool to drive employee engagement and performance.

Gamification is another significant way technology finds applications in organizations' reward programs. In the coming years, more companies will adopt this recognition approach. It involves using AI to facilitate real-time monitoring and recognition of employee contributions.

Gamified reward systems acknowledge and celebrate the positive actions of employees by integrating rewards with personalized goals. These systems use badges, points, and leaderboards to encourage employee engagement with an organization's rewards program while strengthening company culture, allowing recipients to redeem points for cash or other prizes in real time to help sustain employee recognition.

Another application of technology in employee rewards that highlights innovation is employee recognition software. These digital recognition platforms, such as Assembly, streamline the process of automating rewards programs and delivering recognition awards, making them more convenient for employees.

Frequently Asked Questions About Employee Rewards And Employee Engagement 

Employee rewards and engagement are closely linked concepts that are discussion topics in HR departments of organizations. Due to their interrelatedness, many frequently asked questions surround these topics. We’ll address two commonly asked questions.

  1. What is the relationship between reward and employee engagement?

Research has shown that companies that use rewards, especially non-monetary incentives, have 44% higher employee engagement rates compared to those that don't offer incentives. Additionally, organizations with effective employee recognition programs have a voluntary turnover rate of half as much as organizations with ineffective recognition programs.

  1. How do you foster employee engagement in the workplace?

The most effective engagement strategies are the ones that engage the top leadership of a company.

Employee engagement begins with regular communication and collaboration between managers and employees. When company leaders actively participate in engagement efforts, employees become more committed to their jobs because they understand how their contributions contribute to the company's overall success.

A perfect approach to fostering employee engagement is through a bottom-up approach. It involves inviting employees to participate in decision-making processes; it's a way of acknowledging the value of your workforce.

Also, having effective internal communication is crucial for fostering employee engagement. Therefore, utilizing a dedicated employee engagement tool that provides your workforce with a central hub for accessing updated company news feeds, employee incentives, and personalized learning plans is essential.

Revamp Your Employee Rewards System With Assembly

We cannot overstate the impact of rewards and recognition on employee engagement and performance. Employee rewards ensure business success while creating a conducive work environment for continuous productivity. A motivated workforce creates a positive work environment, leading to higher engagement and overall performance.

Companies are starting to see a positive relationship between employee-specific recognition awards and higher staff retention rates due to the increased use of technology in rewards programs. By acknowledging employees' diverse needs and aspirations, organizations can tailor reward programs that drive individual performance and contribute to the company's overall success. 

Assembly is an employee recognition tool powered by AI that simplifies identifying the varying needs of an organization's workforce. It allows organizations to offer customized rewards to their employees. With its comprehensive analytics, you can track the effectiveness of your rewards program in real-time. Book a free demo today.

Browse our Free Employee Recognition Guide

Get the foundational knowledge on creating an employee recognition program that boosts employee engagement and helps them feel valued.

Explore Guide

Frequently Asked Questions

Is Assembly SOC 2 compliant?

Yes, at Assembly, security is a top priority. Each quarter, we have ongoing security work that is everyone’s responsibility. While we maintain a strong security posture, it was important for us to prove to our customers that we do everything we claim to do. This led us to pursue a SOC 2 Type II report that would provide evidence of our compliance with industry gold-standard security practice.

What's the ROI for employee recognition?

There is study after study showing that employee recognition leads to increased engagement. This in return creates an environment where employees are happier and more motivated which increase productivity and reduces voluntary turnover significantly. In order to filled critical roles, companies tend to spend nearly twice the value of an annual salary. Assembly is an investment in your employees that supports your bottom line.

Does Assembly offer longer-term contracts?

Yes, we will offer contracts for companies with longer-term agreements to help larger customers have more certainty around future costs.

The minimum agreement term is a 12-month subscription.

Does Assembly offer onboarding support?

We do and for FREE! Any new customer needing further support to get started with Assembly to ensure you're set up for success can request custom onboarding support. Improving your employee experience is about much more than just using our amazing software; it’s about transforming your business to create a workplace that people love. That’s much easier to do with the personal support and advice from our passionate people experts.

Is there a free version of Assembly?

Yes. We offer a completely free plan for up to 50 team members. This plan is intended for teams or organizations that are looking to get started with an employee engagement tool. Keep in mind, this plan is limited in features.

All customers can open an Assembly account for free and get started without a credit card. Then you can change plans as necessary.

How much do rewards cost?

At the time of redemption (when your employees exchange their points for a paid reward) you'll pay face value. If a reward is a $10 Amazon gift card, your cost will be $10. All paid rewards are billed for on a monthly basis.

The good news is that you don't have to pay for rewards upfront because we only charge you when points are redeemed, not when they're earned.

Does Assembly offer discounts?

We offer discounts or educational or charitable organizations. In order to secure a discount, you'll first need to book a demo with a customer support specialist.

For all other organizations, we are willing to consider longer-term agreements in exchange for discounts. To set up annual plans or longer, you will need to book a demo with a customer support specialist.

How do I cancel my plan if needed?

If you're on a month to month plan, you can go here and cancel anytime. If you're having concerns or need help setting up your account for success, you can always book a demo with a customer support specialist.

If you're on a longer-term custom plan, you'll need to reach out to your customer support specialist to cancel your account or email us at

What customizations are available?

Great question! You can customize your core values to match your organization's to boost and track alignment. You can change your currency from the 🏆 emoji (our default) to any emoji of your choice. You can swap our logo for your own. You can also set up company culture rewards such as, "Lunch with the CEO," "Buy a book on us," and so much more!

Who can give or receive recognition?

While we recommend a peer to peer set up where anyone in your organization can give or receive recognition, you can set up Assembly however you want. If you need to limit the people who can give or receive recognition, that's perfectly fine and can be done from your Admin, here.

What integrations are available?

Assembly connects to the tools your employees use every day to offer an easy, seamless experience with minimal change management.  

Assembly has integrations with HCM/HRIS systems like ADP, Google, Office 365, and Slack. We also integrate with communication tools like Slack and Teams so you and your employees can access Assembly wherever they work now.

What's your average adoption rate?

That depends on the company's permissions set up. That said, over 90% of the employees on Assembly's platform are recognized on a monthly basis. That means nearly every employee across all of our customers are receiving regular recognition from their peers, managers, or leadership. We're extremely proud of this.

Must rewards be set up to use Assembly?

They are not required. You can use Assembly without having rewards set up. However, we don't recommend it if you intend to have a high adoption and usage rate. You can always keep the costs down by offering internal culture rewards that are fulfilled by you internally.

Are points required to use Assembly?

No, you can remove allowances from anyone or everyone. It's up to you but we do recommend using points whether they're worth a real dollar value or not. Companies that use points have a much higher engagement rate even if those points don't exchange for real dollars.

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