Awards and prizes are a great way to motivate employees and reward them for outstanding performance. They can also be a powerful tool to recognize employees who go above and beyond the call of duty.
In HR and Payroll, awards and prizes can be classified as cash or non-cash rewards that are given to employees for:
Recognition: They have done something for the company.
Incentivization: They will do something for the company.
Why Do Prizes and Awards Matter?
Awards and prizes are important because they motivate employees to achieve their goals. They also give employees a sense of achievement.
Companies that recognize their employee's achievements often see:
Better customer service
Increased employee satisfaction
Recognition is one of the key reasons why awards and prizes exist. Employees will be motivated to strive for excellence if they feel appreciated for their contributions.
What Awards Are Considered Best for Employees?
Awards are a great way to show your employees that you value them and that their contributions are not going unnoticed. There are several types of awards that can be given out to your employee, from certificates to cash prizes.
The three major categories are as follows:
Behavior and Value Awards
1. Performance Awards
A performance award is given to employees who meet certain standards. For outstanding achievements at work, they can receive awards. This type of recognition can be given to employees who excel in their jobs.
Some performance awards examples are:
The Employee of the Month
2. Behavior and Value Awards
Behavior and value awards are given to the employee based on the employee's working principles. Those who have exemplary employee behaviors, transparency, and affection toward the workplace should be recognized and complimented.
You may have seen the following common behaviors and value awards:
Best Team Player
Best Attendance Award
3. Service Awards
A Service Award is given to employees who have demonstrated exceptional service over a period of time. The award recognizes the employee’s commitment to the company and its customers.
How Do You Recognize Employees for Their Hard Work?
Employee recognition programs are common in companies today. It's not unlawful to ask the employee how they like to get compensated. While some prefer to be known throughout the entire workplace, others might choose something more personal.
Here are five ways to recognize an employee's hard work for the company:
Get management involved: A manager can be crucial to recognize an employee's efforts for the company. In fact, 28% of the employees have reported that their manager’s recognition matters the most followed by the CEO or an executive.
Leave a thoughtful note: It’s expected that some employees might prefer something more personal and private. In this regard, you can give out notes or cards to show express appreciation.
Offer additional paid leaves: Paid leaves are something that every hard-working employee deserves. Offering paid leaves can be a great way to reward an employee.
Offer shout-outs: It is important to establish meetings with the team to highlight the performance of an employee and shouting out their name can be rewarding.
Offer money: Offering money doesn’t have to be in a form of cash. You can offer them gift cards, movie tickets, etc. in to reward them based on their interest.
What Can Motivate Employees to Hard Work?
Employees can be motivated in many ways. For example, you can reward them with praise, give them recognition, or even offer incentives to them. Identifying what motivates each individual is the key to success.
Some of the benefits that can motivate employees are:
Employee incentive programs: An employee incentive program (EIP) is a type of reward system that provides incentives to employees for meeting specific goals or objectives. EIPs are often used to encourage employees to achieve certain performance targets or to increase productivity. Employees who exceed expectations can also receive them as a reward.
Leadership and growth opportunities: An employer can offer career transition to its employees to keep them motivated and focused on achieving their goals. The majority of the employees expressed that they would like to stay longer in a company where growth and learning are expected.
Flexibility: Employers who offer flexibility to employees are more likely to commit to their work and it also helps boost motivation.
Are Awards and Prizes Subject to Taxation?
Awards and prizes are subject to taxation depending on the value, types, and other qualifications. If an employee receives taxable property as an award, they will need to pay tax on it, especially if the property's monetary value exceeds $1600. But at the same time, there are many non-cash awards and prizes or cash awards of small value that may not be subject to taxation at all.