Advantages and disadvantages of rewarding employees

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Over 40% of UK companies with ten or more employees are reporting widespread difficulties in recruiting sufficient numbers of job applicants.

Many more are struggling to find applicants with the correct skillsets. The 100,000 shortfall in UK lorry drivers is a much-discussed example of this situation.

These serious recruitment issues add to the importance of fostering employee loyalty and doing everything you can as an organisation to minimise staff churn.

Central to this is the debate about staff incentives and loyalty systems. We look closely at the advantages and disadvantages of rewarding employees.

Strong workplace culture

The importance of creating a supportive and positive workplace culture is now widely accepted. It helps you retain your staff but also plays a key role in optimising job satisfaction, and therefore boosting productivity.

A happy workforce is an engaged and motivated one!

There is a view that creating employee reward systems can result in an unhealthy level of fragmentation and competitiveness. For example, some of the more traditional ways to incentivise staff have put a heavy focus on sales KPIs, leaving support staff ‘in the cold’.

Zest is a better employee perks platform for organisations that want to recognise contributions of all types, across all job roles. In fact, the simple fact they are a continuing part of a team can be acknowledged with a realistic reward.

This means that one of the main advantages of rewarding employees is that they can be supported in an inclusive and equitable way.

Appreciating individual and collective achievement

According to research organisation Gallup, 79% percent of employees who leave a position cite lack of appreciation as their main reason.


Especially if you operate in an industry currently under severe economic pressure, it’s not always possible to retain staff with substantial pay increases or fast career progression. However, appreciation comes in many forms, including open communications between management and workforces, and the presence of employee reward systems.

The most versatile platforms for offering employee perks can be configured to show appreciation for individual contribution, and collective endeavours for example.

Creating a consistent reward system

One of the disadvantages of introducing an employee reward system comes from choosing an option that is time-consuming to operate, or which leads to inconsistency and ambiguity. If an organisation appears to reward ‘favourites’ or be arbitrary in its recognition of staff contributions, resentment is a natural outcome.

There are employee reward options with built-in limitations too, focusing too much on front-facing staff for example, or offering rewards that prove too costly to sustain.

This can be overcome by choosing an organisational rewards system that’s easy to manage and afford, and transparent in the way it delivers employee perks.

What to aim for to cash in on advantages

Weighing up the advantages and disadvantages of rewarding employees clearly pivots on finding a system that is:

  • Consistent
  • Company-wide
  • Sustainable
  • Equitable

Once you do this, the pros more than out weight the cons, and you get a well-motivated and engaged workforce, and improved staff retention.

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