In Short
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Financial Rewards: Offer salary increases, bonuses, or share options to motivate and retain employees.
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Non-Financial Rewards: Implement team events, professional development opportunities, and public recognition to boost morale.
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Targeted Recognition: Reward employees who exceed expectations to foster a culture of excellence.
Tips for Businesses
Recognising and rewarding employees is essential for motivation and retention. Consider both financial incentives, like bonuses or share options, and non-financial perks, such as professional development or team events. Tailor rewards to individual preferences to maximise their impact. Ensure that recognition is meaningful and aligns with your company’s values and goals.
It is vital that, as an employer, you reward your startup employees and recognise them for their hard work and efforts. Employee rewards can come in a variety of forms. Rewarding employees through ways they will appreciate is a way to motivate, satisfy and retain them. This article will outline ways to reward your startup employees, including financial and non-financial rewards.
How Rewards Can Be Beneficial
You should create a company culture that recognises employee performance and efforts. Without rewards and recognition, employees may be undervalued and demotivated, pushing them to be unproductive. Therefore, rewarding them is the easiest and most effective way to show appreciation for their hard work. Rewards motivate employees, and the happier the employees, the better the workplace environment. Thus, you need to reward employees to:
- retain employees;
- increase job satisfaction;
- form a positive team and company culture;
- decrease absenteeism from employees;
- increase customer service;
- increase employee engagement, productivity; and
- encourage high and above-average performance.
Financial Rewards
Financial rewards are a common way to reward and motivate employees for their efforts. It inspires employee loyalty and can increase productivity if employees know what they work towards. As a startup, your business may be small and therefore have limited ability to compete with market-rate salaries to attract talent. However, there are several ways to structure your financial rewards to be attractive. For instance, some examples of financial rewards include:
- wages or salary raises;
- commission based incentives;
- bonuses;
- paid time off;
- share options;
- retirement benefits or plans; or
- profit-sharing arrangements.
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Non-Financial Rewards
Due to the small scale of your startup, offering a fringe benefit such as a car or paid holiday is probably out of the question. However, there are still several non-financial rewards you can offer. Non-financial rewards often cost little money, but employees may appreciate them more than a financial reward. You can also ask your employees what rewards they would prefer so that the reward given is appreciated and can have a positive impact. Some examples of a non-financial reward include:
- paid lunch;
- team events such as a BBQ, lunch, or bowling – the options are endless;
- professional development and training – invest in employees who are willing to learn;
- one-on-one mentoring;
- vouchers or discounts for coffee, gym membership, etc.;
- movie tickets;
- flowers;
- free parking or covering transportation costs;
- positive feedback;
- saying thank you;
- social media recognition – posting online about the employee of the month, for example;
- recognising employees at a staff meeting; and
- promotions.
You can establish employee recognition programs with a defined process for recognising employees who have gone above and beyond. For example, the program may identify the employee of the month through their previous work.
Which Employees Should I Reward?
It is not sustainable to reward employees for simple tasks such as showing up on time. Giving rewards too freely may become costly and cause employees to feel entitled to a reward whenever they have completed a task. Therefore, you must recognise which employees truly deserve recognition for their extra work. By identifying such employees and rewarding them, other employees may feel motivated to work to the same standard, which can increase your startup’s output and productivity in the long run. Accordingly, you can identify these employees by looking out for behaviours such as:
- being always ready to help even if it means they have to do extra work;
- working overtime or giving up their own time to work or help colleagues;
- regularly hitting or exceeding goals and objectives; and
- working at your company for an extended time, demonstrating employee loyalty.
Key Takeaways
Rewarding your employees is a pivotal step to motivate, retain and satisfy your employees. When employees receive rewards for their hard work, they feel recognised and are more inclined to keep working hard while motivating others around them to do the same. Your employee turnover may be high without a reward and recognition system, directly impacting customer service quality. Rewards can be financial or non-financial. However, you must reward employees in a way that they will appreciate. It is also essential to recognise the right employees who deserve to be rewarded rather than rewarding every employee just to motivate them.
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Frequently Asked Questions
This depends on what your employees may prefer. For instance, you can send out a survey to all your employees asking them how they would like to be rewarded. In recent years, employees have tended to be more motivated by non-financial rewards; however, some employees are only motivated by money, which is vital to recognise.
Understandably, you may not have a large budget to spend on rewards as a small-scale startup. Therefore, in cases like this, internal and non-financial rewards are the best way to go. For example, you can reward employees through promotions, posting about their hard work on social media, or congratulating them in a team meeting. Social recognitions such as these will significantly motivate employees and help them feel seen and recognised.
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