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The Impact of the Reward System on Employee Retention

Impact of the Reward System on Employee Retention

Employee retention is a concern in every company in Malaysia and around the world. In fact, more companies now face a greater risk of losing their employees.

Aside from the expenses associated with hiring new workers, replacing their presence won’t be simple. Employee turnover not only costs a lot for businesses, but it can also easily disrupt the productivity of a workforce that is already efficient.

Therefore, businesses must make every effort to retain their employees. In this regard, one of the best ways to retain employees is through a reward system. Thanks to HR software and apps, a company reward system is now easy to set up and implement.

Employee reward systems assist businesses in appreciating the efforts and accomplishments of their staff by rewarding them with gifts, compliments, and both monetary and non-monetary incentives.

As a result, employers and managers can recognize their staff in ways that best inspire each member of the team.

How can a reward system help you keep your employees?

There is no one-size-fits-all reward type, and it is hard to please everyone all of the time.

But if you keep in mind crucial elements like employee feedback, employee demographics, and your company’s goals, you can better retain the support of the majority of your staff.

Here are some considerations:

a. Give workers a choice of incentives

Having a choice of rewards is more significant to employees than receiving a particular prize. It’s impossible to guess what employees prefer in terms of rewards because most workforces are made up of a diverse range of demographics spanning several generations.

Because of this, many companies choose to show their employees how much they appreciate them by giving them gifts like gift cards, eGifts, and once-in-a-lifetime experiences.

b. Reward your staff often

Employees can get disinterested in working toward long-term gains if the process is stretched out and difficult.

It is preferable to reward your staff on a consistent basis with modest but frequent prizes. You can simplify the entire process by using an HR app or software in Malaysia.

This not only gets your employees more involved but also keeps them thinking about the good actions and behaviours that your business wants to reward.

c. Give your staff digital incentives

Today’s employees are prepared to accept digital incentives like eGifts. And it’s simple to understand why digital incentives are appealing.

They are a simple payment option that can be issued instantaneously to any mobile device and redeemed at a large number of reputable shops from any location.

Digital rewards can be given through HR software. They are also cheaper than physical ones because there are no costs for printing or shipping.

d. Personalize your rewards

Employee retention depends in large part on employee engagement. Because of this, it’s critical to treat each member of your team as an individual and provide thoughtful, individualized employee rewards. This can increase their devotion to your company and make them feel appreciated.

For example, gift cards can be personalized with the recipient’s name, a thank-you message, and your company’s logo. This way, your employees will remember why they were praised and be more likely to keep doing the right thing.

How Do Reward Systems Impact Employees?

1. Productivity

Employees’ remuneration is based on their productivity. Incentives and motivation for team members are provided by an employee reward system. When such HR systems are implemented, employees are more likely to stick around.

2. Improved Corporate Culture

The ideal employee reward system can support your business and provide a foundation for your company culture to grow. For instance, if encouragement and compassion are your company’s values, an employee incentive system might assist in promoting such qualities.

3. Increased Cooperation

When a good reward system is in place, employees will be motivated to cooperate more often, and they will have every incentive to do so thanks to built-in communication tools and encouraging feedback.

4. Fewer Work Silos

When there isn’t the right tool to support cross-departmental communication, work silos frequently take place.

Employee reward systems encourage cross-departmental communication, which helps break down organizational silos and improve employee satisfaction and retention.

5. Happier Workers

Employee reward systems provide the motivation employees need to get through the occasionally dull workday. Everyone desires to feel unique, cared for, and acknowledged. Thanks to an employee incentive scheme, nobody in the office will fall between the cracks.

6. Improved Interactions with Colleagues

A reward system serves as a reminder to support and boost one another. This is because it provides more opportunities for employees to notice one another and get to know each other better for improved interaction and teamwork.

Final Takeaways

Employee retention is the main concern for HR professionals in Malaysia and all over the world, so it’s more important than ever that hardworking employees are rewarded and recognized for their work.

EasyWork, a complete company and HR system mobile app, comes with a powerful point-based reward system. Not only can employers reward their employees, but employees can also reward their peers for a favour they received.

For instance, as an employee, you can reward your colleague who is willing to clock in extra hours to complete the task when you are on sick leave by using points.

He or she can then use the points to redeem a pre-set reward, such as a sumptuous meal at one of the famous local restaurants.

At the same time, employers can pre-set a list of rewards, such as an iPhone (200 points), PS5 (400 points), a trip to Europe (500 points), and more, for the employees to claim when they obtain sufficient points. This way, the entire reward system is digitalized and highly efficient.  

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