Credit card companies have long used reward point systems to encourage customers to spend more. You have probably heard it before: “Spend $1000, Earn 1,000 Points” or “Earn Double Rewards on Gas and Groceries.” Details aside, the logic is simple: The more you spend, the more you earn. Earning feels good, so spending hurts less.
Positive reinforcement is the key. Reward a good behavior and it is more likely to occur again. It has worked for credit card companies, and, fact is, it can work for employers too.
Reward points programs in the workplace can be powerful. Racking up points gives hourly employees incentive to go above and beyond, to work a little harder to complete tasks and take on additional responsibilities.
As it turns out, these programs are especially lucrative when employees have the option to choose their rewards. According to Anat Lechner, a clinical associate professor of management and organizations at NYU’s Stern School of Business, allowing employees to choose the awards to pursue translates to giving them power of their own destiny. Of course, you can’t offer everything. But allowing employees to choose even from a small list of awards makes the experience more personal. Like credit card customers, employees are more motivated to earn points when the ultimate goal is their own.
Giving employees the power to pursue their own choice of dreams has another major benefit: Reduced turnover rates. Once employees are on the road to winning an award, they are less likely to leave the company for another job.
When designed right, gamified reward programs are simple and effective ways to reinforce best practice behaviors and training. It may seem paradoxical, but making the work feel a little more like play can boost employee productivity, motivation, and long-term commitment.
We’d love to hear from you—have you experimented with “build your own rewards” programs?