Employee points based reward programs are reported to drive higher motivation, organizational identification and increase employee engagement.

The IRF together with researchers from the University of Waterloo and the University of Central Florida conducted research in which they interviewed 1000 respondents in North America and Europe to understand the effects of reward programme design.

They found that respondents whose organisations had points based reward programmes vs non points based rewards programmes reported:

• Higher intrinsic motivation
• Higher organizational identification
• Higher employee engagement
• Greater satisfaction with their rewards and recognition
• Greater preference for working for an organization with a points reward program

With the amount of reward and consumer points programmes out there, it would prove difficult for employees to keep track of their loyalty programmes and where they are earning points.

So what is it about points based reward programmes that drive employees to identify more with their companies? From the research conducted (surveys and interviews) they found that employees cared more about the recognition and belonging associated with earning points than what the points are redeemed for.

Receiving the points is part of the reward experience for customers and by offering points to complete tasks or reach specific goals, this motivates employees and keeps them engaged with your brand. Points based reward programmes are also memorable as participants/ employees can use points instantly or save points for bigger Value rewards like Travel.

According to the research “overall, points programs appear to reach employees beyond a transactional level. Points earners, by and large, perceive their rewards as separate from compensation and more as ‘gifts of appreciation.’ A large majority of respondents agreed with the following statements (See Appendix A for additional findings related to the psychology of points):

Researchers also identified that what makes points based reward programmes so effective is the psychological effect it has on the consumer. They found that the anticipation of receiving the reward delivers a greater amount of dopamine and pleasure than the reward itself.

The budget is an important factor to consider when planning your points based incentive programme, as a sufficient budget assigned to points would be seen as more valuable and meaningful. It would automatically increase engagement from participants by accumulating or saving points for a larger reward/prize. Multiple redemption options beyond a gift card should also be presented to the participant. Points can be redeemed for merchandise, travel, gift cards, cash, time off, at-home meal delivery, and other personal services.  The more choices that are presented, the more value the participant/employee will place on their points and on the programme as a whole.

 A substantial number of our survey respondents (79%) agree that they prefer to save their redeemable points to exchange for large-dollar item(s). However, a majority (58%) also agree that they frequently redeem points for small-dollar items. In fact, almost half of all respondents (49%) agree to both statements.

Conclusion 

In Conclusion, based on the research, one can deduce that by implementing a Points Based rewards system, you create a more memorable experience for your employees that would therefore be more effective at motivating them to perform. These findings led to the conclusion that adding point’s rewards to a broader incentive and reward program is a wise choice and would be beneficial to organisations in the long run.