12 July, 2022
Experiential Rewards in an Employee R&R Program: A Guide
Do you have a rewards and recognition program in place at your organization? If not, are you looking to introduce one? Whether you are in the ideation or implementation phase, it’s important to deliberate upon the types of rewards that you include in your R&R framework.
The traditional set of physical products, digital vouchers, and cash payouts are all good choices, but what makes an R&R program stand out? Enter Experiential Rewards, the type of rewards that give your employees something to do, rather than just buying an item off the grocery checklist or paying the electricity bill. This blog walks you through the rationale of offering experiences as rewards and also enlists a few examples for you to consider!
It’s All About The Experience!
When we experience something new, exciting, or personally significant, it involuntarily turns into a cherished memory. What if we were to leverage this human proclivity to inform our experiential rewards catalog? The result would be the creation of cherished memories which would be tied back to the employer who made it happen! Thus, experiential rewards are a refreshing alternative to traditional rewards that can help strengthen the employer-employee relationship, differentiate your organization from the competition, and instill impressions that last much longer than fleeting transactional rewards.
The benefits of experiential rewards are rooted in the underlying psychological mechanisms that influence human behavior, such as:
1. Mental Accounting: Mental accounting is the process by which people categorize and evaluate their expenditures, usually on the basis of its source or intended use. Experiential rewards fit naturally with mental accounting, as both the source of the experience (being recognized and rewarded) and the intended use of the reward (doing something memorable) are extremely impactful to the receiver. Put more simply, experiences as rewards are unforgettable!
2. Effort Justification: This is a human tendency to attribute a certain value to a task, that is usually evaluated based on the effort that goes into accomplishing it. Experiential rewards involve a level of personalization and dedication that most transactional rewards lack, due to which they are deemed exceedingly effective in the eyes of the receiver.
3. Social Signaling: Who doesn’t like some healthy social validation and affirmation? Experiential rewards do just that- as people have a tendency to share their peak experiences with others, especially in the age of social media platforms where personal prestige is built through social sharing. And what’s better? Your employees might reference your brand while communicating the same to their family, friends, and social networks. This has dual benefits- your market reach expands whilst your employees are engaged, happy, and committed!
Millennials Love it- So it is the Way Forward!
There has been a marked change in consumer preferences over the years. Historically, the generations in the post-world war economy from the 1950s onwards preferred security and tangible goods with a lasting value. It was no surprise then, that service awards originally comprised of expensive watches, jewelry and the like, usually presented as retirement gifts. Fast forward to the current talent economy with short work tenures and the ‘you only live once’ mantra that the younger millennials espouse. This cultural change has undoubtedly shifted the focus from possessions to experiences and relationships, as highlighted in this Forbes article.
With millennials projected to comprise 75% of the workforce by 2025, their preferences determine the success or failure of any employee rewards program. Accordingly, traditional R&R programs must evolve to include a contemporaneous range of digital rewards. While physical gifts like mementos, plaques and keepsakes still have their place in an R&R program, most millennials would prefer more practical options to reward their performance and loyalty. The evidence? Research has found that 84% of people in the millennial cohort covet experiences as rewards. Additionally, they want the freedom to choose their experiential reward, which makes a digital R&R platform indispensable to a modern rewards program.
A Few Experiential Reward Ideas
- Spas
- Hotel stays
- Fine dining experiences
- Holiday packages
- Gym memberships
- Tickets to concerts, musicals, or movies
- Adventurous sports such as scuba diving, paragliding, horse riding etc.
Ready to Ramp Up Your Employee Rewards Program?
It is worth mentioning that irrespective of your workforce demographics, experiential rewards are worth giving a shot to, as they offer something for everyone! At Gratifi, we provide a diverse range of reward options to choose from and also help you design a personalized catalog that caters to your organizational needs in a befitting way.
Connect with us today to explore the robust features of our R&R platform!