Programs that award points to employees when they achieve goals have been part of companies’ recognition mix for decades, yet they played an elevated role in the past two years, as team celebrations in person have been mostly on hold.
Wanting to learn more about the psychology that drives points reward programs, The Incentive Research Foundation (IRF) surveyed more than 1,000 workers during 2021, nearly 70% of whom had participated in a work-sponsored points reward program. While individuals seem inundated with similar points programs offered through consumer goods companies as customer loyalty efforts, the IRF found that respondents who work for companies that use points reward programs have higher levels of several desired emotions when compared to workers who have not participated in points reward programs. This includes:
- 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
Depending upon how an employer structures its program, points can be redeemed for gift cards (including cash-equivalent cards), merchandise, travel and experiences, such as movies, restaurants, concerts, sports and other events.
“There is a psychological aspect to points reward programs that goes beyond the basic transactional elements of receiving and redeeming points for tangible rewards, and even past the well-known psychological benefits of receiving recognition and appreciation,” the IRF report states.
Other key findings of the IRF survey support earlier research on the psychological aspects of points reward programs, including the insight that program participants tend to be more engaged in the program if they start from a point of already being invested. That is, starting each program participant with some points already deposited in their account will often result in better results.
It’s also important to include an element of peer-to-peer recognition. When the giving of appreciation is restricted only to leaders and managers, impact is limited. “There are few things more powerful in building trust than getting appreciation from your colleagues,” said Allan Schweyer, chief academic adviser for the IRF.