The Impact of Reward Systems on Employee Performance in 7 Statistics

When your employee satisfaction and retention are an issue, there are some obvious steps that could help. Offering someone a significant salary raise, for instance, creates a high likelihood that they will stay and be a productive member of the team. But for some benefits, the results aren’t as simple to see.

Consider employee rewards. Showing the impact of reward systems on employee performance requires taking many different measurements into account: engagement, retention, morale, and more.

Here are some statistics that help prove the value and impact of reward systems on employee performance, as well as company success.

Building a Sense of Satisfaction and Loyalty

A majority of surveyed employees said getting rewarded by their employer with a gift card or prepaid card would:

• Make them feel valued (86%) and more loyal (81%).
• Motivate them to work harder (81%).
• Make them want to stay longer with their employer (79%). (Source: Blackhawk Network)

Employees are 13% more productive when they’re happy, and, in a separate survey, 82% of respondents said recognition is important to their happiness at work. (Sources: Oxford University/SurveyMonkey)

Giving appropriate rewards to your teams regularly isn’t just about making them happy — it has a positive effect that cascades throughout the entire employee experience. You’ll see the difference in morale, motivation, productivity, and engagement. And when you improve those measures, teams are more likely to collaborate better, be more efficient, and enjoy more success.

U.S. employees overwhelmingly agree that employers’ well-being rewards and programs:

• Make them feel better about their employer (84%).
• Make the company more attractive to potential employees (83%).
• Enhance or improve their overall employment experience (83%).
• Help them be as productive as possible (79%).
• Help them avoid getting sick (79%).
• Are one of the reasons they stay at their job (75%). (Source: Statista)

It’s no secret that the emphasis on employee well-being has been growing as workplaces change, economic pressures grow, and burnout becomes a real problem. When you incorporate these concerns into your internal rewards program, you not only show that you care about your team members as people, you also reap the benefits in workplace culture, recruiting, absenteeism, and more.

READ MORE: Find the Right Types of Employee Rewards and Programs to Promote Well-Being

Compared with employees who don’t feel appropriately recognized at work, those who do are:

• 2.6 times more likely to think that promotions are fair.
• 2.2 times more likely to say that their employer embraces innovative thinking.
• Twice as likely to say people at their workplace are willing to go above and beyond. (Source: Great Place to Work)

Again, it’s obvious that recognizing employees bleeds over into other parts of their experience. Creating an effective rewards program means your team members gain more satisfaction and understanding about their promotion cycles and feel more supported to share ideas. It also results in employees who care more and are more invested in their work.

What’s Good for Employees Is Good for the Company

Thirty-five percent of survey respondents would seek new employment if the prospective employer offered better rewards and recognition. (Source: 2022 Blackhawk Network EQ research)

Job seekers are looking for compelling rewards programs, so building an effective one can have an important impact not only on your current employees, but in your recruiting efforts as well. Anything you can do to attract top talent, especially in light of recent trends like the “great resignation” and “quiet quitting,” will pay dividends in the long run.

Organizations that report high employee engagement see, on average:​

• 81%​ lower absenteeism​.
• 23%​ higher profits.
• 18% higher sales productivity.
• 10% higher customer loyalty/engagement.
• 43% lower turnover. (Source: Gallup)

The impact of reward systems on employee performance and engagement may not be hard to prove, but the key is to remember that engagement leads to a lot of other desired outcomes. Executives are interested in the bottom line, and creating an engaged team is a major part of building that success.

Offering activity-based sales incentives, which reward reps for hitting goals such as number of calls made or demos given, boost sales by 6% to 9% over offering only incentives based on sales results. (Source: Journal of Marketing Research)

For the sales team in particular, you can move the needle by nurturing good habits with incentives, instead of just rewarding reps for closed deals. It’s especially important in today’s world of remote work to keep your salespeople motivated and productive.

Build an Effective Employee Reward System

To see the positive impact of reward systems on employee performance, you have to make sure you’re offering the right rewards in the right way. By creating an effective, motivational program, you can improve your team relationships and employee retention, not to mention your company’s success.

For more insight, download our infographic on 6 Employee Rewards Trends to Watch!

about the author

Hannah Prince

Hannah is a reformed journalist who has more than 15 years of experience and now focuses on content marketing for innovative tech companies.

Hannah is a reformed journalist who has more than 15 years of experience and now focuses on content marketing for innovative tech companies.