Why Rewards and Recognition Feels so Good (and Why Employee Incentive Programs Work!)

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“Good job!”

There, that felt good to hear, didn’t it?

Wired for Reward

We are wired for rewards. Literally. In fact, when people receive a positive recognition or reward, it creates a shot of dopamine, sparked by the neurotransmitters in our brains. According to Kevan Lee in his article on the The Science of Motivation: Your Brain on Dopamine, “The brain can be trained to feed off of bursts of dopamine sparked by rewarding experiences.”

Imprinting the Behavior

The dopamine shot is felt in many ways, including motivation, memory, behavior and cognition, attention, sleep, mood, and learning…leaving an imprint on our brains reminding us to repeat the behavior that earned the reward.

Thankfully, more and more managers and business owners are understanding the power of positive reinforcement, and are using it to create more rewarding workplaces resulting in happier, more loyal and more productive employees. In fact, according to “The Power of Perks” by Bruce Shutan, (March 2013), “By using interesting perks that are simple and cost-effective, businesses will reap a higher return on investment (ROI) in the areas of employee engagement, morale, recruitment, and retention, as well as improve productivity, innovation, customer loyalty, and revenue.”

If you’re not already utilizing the power of positive reinforcement, give it a try. And keep these three things in mind when rewarding employees:

  • Timing
    According to a behavioral guidelines checklist published by Utah State University, positive reinforcement is most effective when it occurs immediately after the behavior. The sooner you can spot and reward the behavior, the stronger the connection is between the two events.
  • Non-Cash Rewards
    Eighty-four percent (84%) of employees prefer to be rewarded with a wide variety of gift cards, says the Society for Industrial and Organizational Psychology. And according to a recent study by the Aberdeen Group, “Non-cash incentives / rewards are a vital component of sales performance management.” In other words, while compensation and bonuses are important, non-cash rewards and incentives are also a key element in any successful work culture.
  • Frequency
    Rewards and recognition don’t have to be large events or items. In fact, keeping it small enables the employer or manager to dole out the rewards and crank up the dopamine more frequently. The more dopamine, the more we learn and desire to repeat the good behavior that earned the reward. In other words, smaller rewards, handed out on-the-spot, are more effective than larger, less-frequent recognition events.

An Easy Solution

According to the authors of Values Shift: The New Work Ethic and What It Means for Business, Companies that build non-cash perks and incentives into their corporate culture are 44 percent more likely to have above-average profits than those that do not adopt this approach.

An easy and effective solution is simply exploring employee gift cards. When purchased and kept handy in smaller denominations, tangible gift cards provide an opportunity for frequent, on-the-spot use by managers to immediately reward favorable employee performance.

Explore Employee Incentives and Gift Card Options

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