It is a well-known fact that a motivated workforce is the most important asset of an organisation. In recent years, the dynamics of how organisations recognise and appreciate their employees have undergone a transformative shift. Evolving business practices and changing socioeconomic conditions have significantly influenced employee expectations regarding rewards.
Importance of rewards and recognition at the workplace
Companies with a culture of rewards and recognition witness increased productivity and a sense of satisfaction among employees which helps them to build a positive brand. Also, motivated and engaged employees are more likely to produce high-quality work and generate more revenue for the company. According to Incentive Research Foundation report, companies with employee rewards programs had an average of 9% higher revenue growth than those without.
HR leaders substantiate this from their own experience and believe that it will continue to influence strategy in the year to come. Mahesh Medhekar, VP-Human Relations, Mercedes-Benz Research and Development India (MBRDI), identifies increased focus on flexibility, constant encouragement and recognition, and provisioning for productivity-enhancing tech tools as some of the trends that will reshape the culture of reward and recognition in 2024.
“Today, for most employees, monetary benefits are no longer a sole requisite. A workplace that promotes a healthy work-life balance is the most potent motivator for employees at every level,” says Medhekar. He adds that the frequency at which an employee receives rewards and recognition practices, and how customised they are to the receiver, is important. “Most employees today look forward to real-time recognition to feel valued and appreciated,” asserts Medhekar.
Personalised rewards and recognition
Customisation of employee interactions with the company has become a new and useful tool for HR, made even more effective by advances in AI. Research easily indicates simple ways of making rewards and recognition personalised. For example, according to a 2022 report by job portal Naukri.com, both men and women expressed a desire for their impactful work to be acknowledged in the workplace, but women exhibited a higher preference for equal opportunities (31%) compared to recognition at work (24%). In contrast, men indicated a preference for a substantial role in the business, coupled with recognition at work.
HR leaders also believe that personalisation will be key to successful rewards programme. Vivek Mani Tripathi, CHRO, Newgen Software Technologies states that rewards and recognition need to be personalised and sincere.
“The impact is higher, when rewards are given in public, in front of peers whose opinion and appreciation matters. There is a trend towards increased team awards as any significant outcome is almost always a team effort,” says Tripathi who emphasised that the usage of technology to host virtual recognition ceremonies, transcending geographical boundaries, ensures personalisation would get accelerated.
Similarly, Kajal Malik, Co-founder & CBO at PickMyWork believes that in 2024 the central shift in the culture of reward and recognition will be driven by a heightened focus on individualised appreciation and inclusivity.
“Organisations are expected to move beyond traditional, one-size-fits-all approaches and embrace personalised recognition strategies that cater to the unique preferences and achievements of their employees. This shift will heavily involve technology, particularly AI-driven platforms, for real-time feedback, fostering a culture of continuous recognition,” says Malik.
For instance, software companies might adopt a digital rewards platform allowing employees to select their rewards, from extra vacation days to enrollment in specialised training courses. Similarly, global marketing firms are likely to introduce a peer-to-peer recognition app where team members can reward each other for collaboration and creativity, redeeming points for gifts or even charity donations.
“Specifically within the gig industry, the evolving nature of work and the rise of remote and freelance arrangements will necessitate innovative reward structures. Companies operating in the gig economy are poised to embrace dynamic, performance-driven incentives, aiming to ensure freelancers and remote workers not only feel valued but also maintain a strong connection to the organisational culture. Notably, skill-specific recognition is anticipated to gain prominence within the gig sector,” adds Malik.
Sharing an example of PickMyWork’s bronze, silver, gold, and diamond badges, she expects that the gig platform could introduce a tiered recognition system, where gig workers receive badges and bonuses for completing a certain number of high-quality projects and earnings. “This approach not only motivates gig workers by recognising their specialised talents but also facilitates the creation of a talent pool where gig platforms can readily identify and engage top performers for future projects,” says Malik.
AI will power the evolution of rewards trends
Anjali Raghuvanshi, Chief People Officer, Randstad India expects that the landscape of reward and recognition (R&R) trends will go through transformation, guided by a commitment to tailored programs that resonate with individual employee needs, collective goals, and organisational values.
“Artificial Intelligence (AI) is expected to sustain its impact, facilitating instant recognition, timely acknowledgments, and adaptability to hybrid work setups. Adopting omni-channel approaches will become more prevalent, where employees can be recognised across various platforms. For example, LinkedIn can be used by the company to give recommendations for a well-performing employee, Instagram can be used to announce ‘employee of the month’, etc,” explains Raghuvanshi.
According to Raghuvanshi, companies will also imbibe a culture of non-monetary rewards and recognition (R&R) which includes verbal acknowledgment and appreciation, opportunities for professional development and skill enhancement, and flexibility in work schedules or remote work options. “As companies strive for innovation, there will be a surge in novel recognition methods, such as gamification and social platforms, to boost motivation and overall employee engagement. Amid these evolving trends, the foundational principles of diversity and inclusivity will remain crucial, emphasising the need for R&R frameworks that make every employee feel valued and enhance their sense of belonging within the organisation.”