When it comes to employee recognition and rewards (R&R) programs, points-based R&R programs have emerged as one of the most popular formats for driving effective and meaningful employee recognition and rewards.
Some organizations might hesitate to pursue a point reward system for employees out of concerns around potential “gaming of the system” or possible fraud involving allocated points. However, the benefits of point reward systems significantly outweigh any of these concerns. This article will cover ways to mitigate these perceived risks and highlight strategies and safeguards designed to ensure the continued integrity and effectiveness of point reward systems.
What are Points-Based Rewards?
Points-based recognition and rewards (R&R) programs allow peers, managers, and executives to send and receive recognition across all organizational levels, fostering a continuous culture of recognition and appreciation. In these programs, written recognitions are often accompanied by "points" that team members can send to one another. These points can be saved up over time and ultimately redeemed for a meaningful reward of the employee’s choosing.Benefits of a Points-Based Recognition & Rewards Program
There are numerous advantages to using a points-based R&R program or software:- Points allow employees to earn rewards they care about In a points-based recognition and rewards system, your employees can use points to choose exciting rewards. Point reward systems enable employers to offer powerful rewards to each employee without having to make an arbitrary selection based on guesswork or hope that most employees will be okay with the reward chosen on their behalf.
- Points-based systems increase reward frequency Increasing reward frequency can be a game-changer. By enabling more frequent employee recognition, point reward systems help maintain high levels of employee motivation and engagement. An organization-wide culture of recognition is created by maximizing the power of motivation by recognizing and rewarding behavior in real-time.
- Points-based programs incentivize key actions A points-based employee reward system can also incentivize key actions and values that matter to your organization. Assign a set number of points to be earned once employees complete specific actions important to your organization, such as completing IT training, anti-harassment courses, or an annual employee engagement survey within a certain timeframe. You will see participation in key initiatives improve, and employees will be far more motivated to complete certain actions.
- Points add additional impact and value to recognition Employee recognition alone is powerful. Indeed, many recognition programs are already strong and impactful, even without points. Some industries are inherently not suited to employee rewards programs (the government sector, for example) – yet companies within these sectors still purchase Employee Recognition software and use it to meaningful effect without activating the points functionality. But if appropriate to an organization’s culture and industry, adding points to sincere appreciation helps recognition go the extra mile.Make sure to ask your preferred R&R software vendor if they add a markup to points. WorkTango, for example, does not mark up points and therefore earns zero dollars on customer points / points redemptions. It doesn’t matter to us whether or not you choose to attach points to your Recognition program. The decision to utilize points or not should always be yours, based on what is most suitable for your unique organizational culture and your budget.
- Point reward systems generate measurable insights Analyzing the distribution of points given across your organization and points earned by completing key company actions through Incentives provides insight into what’s working, who’s getting rewarded the most, and if any potential gaps or inequities exist within your program. HR leaders can use these insights to increase participation among managers, leaders, and departments. They can also use it to observe which behaviors are being recognized. This supports the development of guidance for future leaders. Leveraging insights can also help predict employee attrition, offering another layer of strategic planning for talent retention.
- Point reward systems allow for collaborative team reward redemptions Team-based rewards within a point reward system are also called “point pooling.” Point pooling is when a team of coworkers combine their points for a shared reward—maybe a team lunch together or a joint donation to their favorite charity. Team-based recognition drives connection and camaraderie.
- Point rewards systems save time & security If your rewards program design requires a full-time manager, you’re doing it wrong. If you still have someone buying items to reward individual employee anniversaries, processing expense reports that include on-the-spot recognition gifts, or doing other manual management of employee rewards, you’re losing out on leveraging that employee’s time for more impactful work. Rewards systems should be streamlined and easy to manage. Points-based reward systems are low maintenance and save significant amounts of time. Additionally, they reduce the complexities and security risks associated with handling and inventorying physical items.
Perceived Risks of Points-Based Rewards Systems
Even with the benefits of points-based reward systems, some companies harbor concerns about potential risks. Potential concerns sometimes include:
Employees trying to gaming the system / conducting point swapping: “Point swapping” involves a reciprocal arrangement where two employees agree to exchange points back and forth to maximize their total points haul. This type of behavior is unethical and goes against the philosophy of a recognition program, as it undermines the integrity of the R&R program by focusing on the sheer accumulation of points rather than genuine recognition of great work. Companies can avoid this concern by emphasizing to employees that the program is designed to promote genuine recognition associated with company values and great work and that the program will be governed in accordance with existing employee handbook regulations.
Point hoarding: A few employees might try to collect points without redeeming them right away. Often seen as “point hoarding”, this behavior should not be viewed as a risk but as an indication that employees are either saving for bigger, more valuable rewards, or because the existing rewards do not resonate with them. Employees have rightfully earned their rewards and should be free to spend them as they see fit. Therefore, having a policy where reward points expire undermines the purpose of an R&R program.
NOTE: It is important to remind any executives potentially concerned about point hoarding that points are typically only worth one US cent. Most organizations allocate just a few thousand points to each employee for use during each quarter. The maximum liability an organization could face from a few employees hoarding tens of thousands of points is therefore typically limited to a few hundred dollars.
Fraudulent Incentives claims: This involves claiming points for non-existent achievements, such as claiming Incentive points for completing a training when the employee has not in fact completed the assigned modules. Such actions not only threaten to devalue an Incentive system but also could serve to demoralize other employees who observe or become aware of such dishonesty. To prevent this, implementing a simple approval process can be effective. Requiring a manager or supervisor’s verification before points are awarded ensures that only genuine achievements are rewarded, thereby preserving the integrity and motivational purpose of the incentives system.
While these risks are real, they are small and can be effectively managed with the right tools. While no system is perfect, well-designed points-based R&R programs should discourage misuse by setting clear expectations with employees from the start and continuously maintaining transparency and accountability.
How to Avoid & Address Potential Point Misuse
To effectively mitigate risks within points-based Rewards and Recognition (R&R) programs, organizations are able to leverage a suite of tools and features designed to promote fairness and accountability. Implement the three tips below to avoid any potential concerns around point misuse:
- Educate employees and demonstrate what good recognition looks like. It's essential to continually educate employees about the R&R program's mission and keep them updated on any policy changes. This ongoing training is crucial for fostering transparency and reinforcing the objectives of employee appreciation initiatives. It ensures everyone understands and aligns with the program's core goals – and understands the types of recognition that are acceptable at your unique organization (and those that are not). Educating employees about what great recognition looks like will also help ensure that points are given for genuine great work.
- Align R&R programs with company values. Ensuring that the points-based R&R program is closely aligned with the organization's core values and objectives guarantees that recognition and earning of points towards rewards are tied to genuinely contributive actions. This alignment significantly reduces the incentive for employees to “game the system.”
- Utilize analytics and public visibility. Analytics and tracking are crucial in monitoring point distribution patterns. Audit trails provide a transparent record of all transactions, enabling quick intervention when anomalies are detected and adding an essential layer of security.
Additionally, using public recognition software is an effective strategy for enhancing accountability within points-based R&R programs. This approach makes it difficult for employees to game the system, as all recognition is visible across the entire organization, and random, recurring recognitions between two individuals without valid descriptions of great work will immediately stand out.
Through these comprehensive measures, companies can safeguard the integrity of their R&R programs, ensuring they operate as intended.
While points-based recognition and rewards programs are not perfect, any potential risks are very manageable with proper program implementation and oversight. The benefits—increased employee engagement, customizable rewards, and enhanced motivation—make these systems a valuable tool for any organization aiming to foster a positive and productive work environment.
By leveraging advanced R&R software - like WorkTango - and maintaining a proactive approach to program management, organizations can effectively minimize risks and maximize the rewards of their R&R program.
