Your organization likely puts a significant investment towards your employee rewards program, but do you really know where those dollars are going? And more importantly, are you getting the best return?
If you already have an employee rewards program in place, you may be finding it difficult to track and achieve your desired results. But don’t worry, you’re not alone. What you may not realize, however, is that your current rewards program may not be motivating your employees the way you had intended – which means your dollars could be going to waste.
Fortunately, there are many new innovative and sustainable options available to help make your rewards program a success and easier to track. To help you create a more effective program and put your dollars to better use, let’s take a look at the problem with most employee rewards programs so we can understand how to fix it.
Where Many Employee Reward Programs Go Wrong
With only 13% of the global workforce engaged, it is clear that most reward programs are falling short on delivering motivation and the tangible elements that employees value most. Here are the most common reasons why:
- Many cash bonuses and incentives have low perceived value
It’s a fact of human psychology: Money alone doesn’t motivate people to do better work. This includes insignificant cash bonuses and gift cards. So while annual compensation increases (that barely surpass inflation) are very costly for employers, they actually have a low perceived value among employees.
- Many rewards programs have restrictions that can discourage utilization
When it’s difficult for employees to access or claim rewards, they go unused. The result? Not only are your dollars are wasted, but these costly rewards generate no engagement with employees.
- Many rewards programs lack transparency and reporting data
Without a simple, real-time way to see if your employees are using their rewards and what types of rewards they are selecting, it’s difficult to make decisions and determine the ROI of your rewards program.
Since not being able to track ROI probably isn’t an acceptable outcome for your internal stakeholders, it’s critical to implement a program that makes it possible for you to prove the positive impact of the program.
Having an engaging employee rewards program can also give you a significant competitive advantage in terms of attracting and retaining the best talent, and increasing productivity and engagement.
For these two reasons it’s time to invest in a rewards program that gets results. Here’s how to get started:
Consider Replacing Ineffective Rewards with Lifestyle Spending Accounts
One innovative solution to consider for improving your current rewards program is giving your employees a Lifestyle Spending Account (LSA).
Research shows rewards that help employees prioritize their mental well-being and live healthier lives motivate engagement and performance more than traditional rewards, which is exactly what an LSA offers.
Similar to an Health Reimbursement Account (HRA) or Health Spending Account (HSA), a Lifestyle Spending Account is an individual employee account that provides reimbursement for a list of personal lifestyle and wellness expenses.
The concept behind an LSA is very simple: You curate the categories where employees can spend their LSA dollars, and then your employees get to choose what they want to purchase. Common purchases include things like yoga mats, gym memberships, cooking lessons and personal coaching sessions.
It’s also important to note that as the employer you pre-determine how much money employees will have in their LSA and you only pay for the LSA dollars that end up being used. It’s also extremely easy to give employees bonus LSA dollars as a reward for a job well done.
How an LSA Can Help Supercharge Your Rewards Program
With an LSA, you have the power to select benefits that work best for your team. You can tailor them to meet the diverse needs of your multi-generational workforce and choose from creative benefits that will improve health and well being while also building loyalty, such as:
- Fitness activities, personal training, athletic attire, gym membership, and sport equipment
- Therapy, counseling, and mindfulness services
- Food delivery, vitamins and supplements
- Professional development opportunities, continuing education, and training courses
An LSA can also help you streamline your employee rewards program, while allocating a predetermined budget – minimizing any end-of-year surprises. A digital platform allows employees to access rewards anytime, anywhere, which means less waste and better ROI. Because everything is housed under one digital roof, you stay organized and reduce administrative headache.
No more guessing about the effectiveness of your program: Let real-time data insights empower you to make better decisions for your employees.
Serious about making change? We’d recommend reading our Ultimate Guide to Employee Rewards & Recognition