The facts
What are points-based recognition schemes?These are platform-based schemes that enable staff to collect points that can be exchanged for rewards. Employees have secure access to an online portal where they can redeem their points for their chosen reward.
What are the origins of points-based recognition schemes?
Rapid advances in technology have enabled points-based staff recognition schemes to gain momentum over the past decade, in many cases replacing conventional, paper-based reward schemes.
Where can employers get more information and advice?There is no industry body for points-based recognition schemes, so employers should speak to several providers and, if possible, other organisations that have already introduced a scheme.
What are the costs involved?
The platforms can be very cost effective to implement, often with minimal set-up costs and system charges, and little in the way of administration because elements such as employee data management can be automated. Schemes are available based on a small licence fee per employee per month.
What are the legal implications?Employee recognition schemes must comply with data protection regulations.
What are the tax issues?
Many schemes are focused on recognition, so reward is not necessarily part of the process, but where it is, employers should check with current tax legislation to establish whether there are any advantages available.
What is the annual spend?
There are no recent figures available.
Which providers have the biggest market share?There are no figures available but providers of points-based recognition schemes include Edenred, Fair Care, Grass Roots Group, OC Tanner, P&MM, PeopleValue, Personal Group, People Care HR, Sodexo, and WorkAngel.
Which have increased their market share the most?There are no figures available to reflect this.
Advances in technology over the past few years have impacted traditional employee recognition schemes and are transforming the way that employers show appreciation to their staff.
Recognition is now known to be a key driver of employee engagement, and recognition schemes that reward employees for performance and achievements can help to increase levels of engagement in the workplace.
A growing number of staff recognition schemes are run on a points-based system via a technology platform that allows employees, either individually or in teams, to earn recognition or awards in the form of points for outstanding performance or achievements in the workplace.
The points are then redeemed by the employee for their chosen reward, which can range from vouchers, events, travel, and experiences to discounts on retail merchandise.
Personal incentives
Points-based recognition schemes can also be designed to appeal to the interests and motivational drivers of a diverse workforce by profiling staff based on age, status, and items they have looked at, for example, and promote rewards they might like.
The key benefit is that an employee’s goal becomes synonymous with a specific reward, rather than cash, which some employees may find more motivating. The accumulative nature of points-based schemes also creates an ongoing incentive for employees to continue striving for higher performance and personal accomplishments in return for the reward of more points.
Points can be awarded in relatively small quantities quickly and easily, and allocated for hitting performance-based goals, for example in sales, as part of a peer-to-peer recognition scheme, or for something specific, such as a thank you for the long hours worked on a given project. A key advantage of these schemes is that they are flexible enough to suit a variety of business objectives.
After implementing a points-based recognition scheme for its own staff, for example, retailer Boots saw an increase in employee satisfaction levels. The scheme links to Boots Advantage Cards, which are offered to its employees as reward vouchers in values of £5 or £20-worth of store loyalty points. Managers can also award points to be added directly to employees' cards.
Meanwhile, Sodexo Remote Sites Scotland’s points-based recognition scheme allows line managers and peers to send ‘thank you’ postcards to its members of staff for going the extra mile. Every time an employee receives a postcard, the scheme adds points to their reward account, from which they can access and pre-select rewards from an online catalogue that includes merchandise, travel, and vouchers. Points are also awarded for the submission and implementation of great ideas.
Technology as a facilitator
In many organisations, points-based systems have replaced the traditional corporate annual employee reward programme, with employee recognition via social networks, mobile phones, and web apps facilitated by the rapid development of software applications that can be used across multiple devices.
Given that smartphones are the information source of choice for many employees, an increasing number of points-based recognition schemes are expected to be developed as mobile-first platforms.
Technology firm WorkAngel, for example, has devised a mobile-first employee reward and recognition platform for employers that combines a private social network where employees can communicate and, specifically, call each other out for recognition, with a points-based voluntary benefits scheme. The idea is that the more recognition points employees accumulate, the more perks, including retail and leisure discounts and cashback, they can receive and access via their mobile phones
A scheme that enables employees to recognise their peers in real time, whether to nominate a colleague to receive a reward or just to say ‘thank you’, can be a powerful engagement tool.
Anecdotally, a trend observed by some providers has been that the adoption of points-based recognition schemes has been at its fastest among high-growth businesses in the IT sector that employ a high percentage of millennials. This has helped to drive another market trend: the introduction of gamification into employee recognition strategies, as part of a wider engagement and communications strategy.
The use of games to incentivise employees and encourage them to recognise each other’s good work can have a positive impact on their engagement with the business.
The points-based platforms can also be designed to include a leader board, to generate friendly competition between colleagues and teams. These can be highly effective at boosting motivation and engagement, but managers should also be mindful of the effect this can have on those employees at the bottom of the board.
Employee recognition has evolved from the days of traditional paper-based recognition. Points-based recognition schemes are social, interactive, online, and thanks to advances in technology, easier to share, all of which contributes to higher levels of engagement and performance, and the likelihood of a positive impact on the bottom line.
Statistics
- 37% of employees receive praise and recognition for good work (Source: Dragonfish, February 2017)
- 19% of employees are motivated at work by praise and recognition from management (Source: ADP, February 2017)
- 21% of employees said they have a reward and recognition scheme (Source: Capita, October 2016)
- 26% of employees cite the lack of reward and recognition for good work as their main grievance at work (Source: Perkbox, October 2016)
