Importance of Business Reward System

Importance of Business Reward System

In this age of cutthroat competition and most of the businesses going online, it is challenging to motivate the employees and other business channel partners to work hard and generate more revenues. With wide market options available, it becomes difficult to hold on to the employees in Singapore, where all brands from all corners of the globe are making a beeline to increase their business revenue, and the attrition rate is high. One of the powerful tools to motivate employees and channel partners is to provide loyalty reward programsHowever, these reward programs can be of many types and are of utmost importance to boost the employee morale to cross the extra mile. Let us discuss them a bit in details.

What is a Business Reward System?

Any unsatisfied employee lacks to complete the assigned task. Employee psychology is such that they always want some appreciation from the management. Earlier, a word of encouragement was enough; however, with time, employees and channel partners get more motivated with gifts and cash rewards apart from their regular remunerations. It aims to formulate processes, strategies, and policies to recognise the value of the workforce in an organisation to reach the goals. It can be financial rewards attached to the basic pay or no- financial like gifts and other material gains, including promotions. Both can be intrinsic as well as extrinsic. The system aims to determine the criteria of how an employee can be rewarded and dependent on the job performance. Even the business channel partners are rewarded depending o their work and garnering business for the organisation. B2B incentive helps the industry’s downward line like the distributors, retailers, and e-tailers to work hard to reach the company’s target and earn incentives.

The business reward system works on many complex factors. A company’s good management team does proper research, evaluation, estimation, and many others before the final reward proposition is set. However, the ultimate objective is to cross the psychological barriers of the employees and business channel partners. It is to motivate them to work hard to earn more revenues or achieve the organisational goals.

Why a Reward System is Important to a Business

Reward system is vital to business as unsatisfied, overworking employees or business associates never give their full efforts to make the organisational goals a success. Hence, the company may lose business; have lousy work cultures or a high attrition rate. The organisation may suffer, losing a highly-skilled workforce getting lured by the competitors offering fat pay cheques and other incentives and freebies.

If we follow the employees’ psychology, a proper reward system can work wonders for an organisation. It helps the company to reach new miles and recover lost grounds.

  • Retaining or attracting high skilled workers – No organisation can achieve the target unless there are highly skilled workers within it. Again, it becomes difficult to employ them as the employees may feel the salary is low, the incentives are not there, and there is no work culture. Thus a good reward system can cut down the attrition rate and attract new employees to be a part of the workforce.
  • Motivates employees to work for the extra mile – Employee or channel partner motivation is one of the critical factors to reach the organisational goals. It has been seen that a proper reward system can encourage the employees and business associates to work hard. The organisation and the employees, and the business associates are satisfied after reaching their target. The organisation meets the goal, and the team members get rewarded and feel the satisfaction of working hard getting the rewards after reaching the designated goal.
  • Helps to build a competitive and team-building culture – No single employee can fulfill the organisational goals. It is a team effort. Therefore, a reward system helps create a team culture and encourages employees and business associates to have healthy competition to get the bonus. It integrates any organisation more, and there is always an out effort by the employees. Sometimes the awards get shared amongst them.
  • Helps to attain the organisational goals – The main objective of introducing a reward system is to earn more revenues and profits or reach the organisation’s ultimate goal. Everybody works hard to get rewarded achieving the desired target, and thus the organisation benefits. The rewards also reflect the appreciation of the organisation towards its employees. It creates a sense of caring in the minds of the workforce, and belongingness settles inside them.
  • Helps to hone up the skills – The reward system encourages the employees to hone up their skills for working with the latest techniques, increasing their performance and giving more output. Employees work hard to upgrade themselves to learn the new skills and apply them in work to walk that extra mile effortlessly and win rewards. It helps to update their skills, competence and personal development.
  • Helps to have a fair policy – Many businesses fail as the promotions and perks are not distributed according to the employee’s competence but often being a yes-man or on the whims of the management. It creates a sense of jealousy amongst the employees. They try to satisfy the management and get promotions and perks without contributing much. Reward system thus negates the unfair policies in an organisation and encourages competent employees to contribute to the organisation. It creates a fair play environment within the organisation, and everybody tries to give their best without any grudges.

 

Takeaways

The business reward system works as a morale booster for the employees and channel partners. It is a psychological tool to encourage the employees to work hard and help the organisation achieve the ultimate goal. Unless the employees are rewarded for their excellent work, the organisation cannot grow big nor have a healthy work culture. Any organisation can considerably reduce the attrition rate by giving rewards to the employees for the excellent work over and above their basic pay. A fair business reward system can change the entire working system of any organisation and earn more revenues. Proper employee motivation is one of the keys to success.

 

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