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Why are experiential employee rewards growing in popularity?
The benefits of experiential employee rewards are numerous. While the traditional view of a reward might be something tangible, or a cash payment, the idea of offering an experience in return for achievement is gaining a lot of ground - mainly because it really works. So, why does this type of reward have such a big impact when used for employee recognition?
It's a great way for employers to connect with employees
Experiences that tap into employees' wants or desires, inside or outside the office, are highly effective motivators. Some experiences are general crowd pleasers, such as nice holidays or spa days. But if you're able to choose an experience that is genuinely connected to what your employees want then you'll further strengthen employee morale and loyalty, increase engagement and consequently boost productivity.
Employees aren't all about cash
Commission and bonuses, like all monetary incentives, are important to employees but they aren't the be all and end all. In fact, CEB/Gartner research found that experiences generally have a higher motivational effect than cash. Furthermore, the research showed that in order for a bonus to be seen as meaningful for a top employee it would need to be at least 50% higher than that for the average employee. Obviously, if it's not viewed as meaningful then the payout isn't really effective as an incentive as it's unlikely to change behaviours.
Instead, it can be worth considering using tailored rewards to target the interests of your employees. This can be much more effective at genuinely motivating them to work towards given targets.
Millennials are all about the experiences
Employers across many sectors are struggling to engage Millennials and younger generations. One of the main reasons for this is a lack of understanding about the way they think. 84% of Millennials would choose experiences as a reward over monetary rewards. This is a generation that places much higher importance on community and self-value, travel and memories, than receiving cash rewards which they don't consider to be as meaningful. So, for employers looking to engage with this crucial generation, experiential rewards are going to play a key role.
Experiences have a much higher value now
Whether you blame Brexit or Austerity - or something else entirely - it costs more now to live than it has ever done before. This means many people have a lower disposable income to do the things they would like to for fun and enjoyment. As a result, experiences now have a much higher value than they did before.
For example, with the drop in value of the pound, European travel has become more expensive so it is now a much more attractive reward. If you're offering a paid-for experience then employees don't have to feel guilty about spending money that should be going towards bills. Instead, they can do something genuinely fun and free. By making them feel valued in this way, you are much more likely to have employees that are more engaged, loyal and interested in the success of your business.
The long-term value of experiences
Cash payouts can be exciting but experiences make memories that will last a lifetime. So, in terms of long-term value, there is something much more desirable in "doing" as opposed to "having". That makes experiences a much more popular choice amongst many employees. Giving your employees rewards like these, that can make them feel extremely valued, acts as extrinsic motivation. This ultimately generates a greater ROI for your company, while benefitting overall morale and company culture too.
Active are experts in delivering employee recognition programmes, supported by an extensive portfolio of experiential employee rewards. To find out more please contact us.
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