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A Guide to Points-Based Employee Rewards & Recognition Programs

May 9, 2024

Foster employee belonging and encourage peer recognition with a points-based employee rewards and recognition program.

Fostering a culture of appreciation and recognition has never been more important. With disengagement and burnout rising, employees need a positive work environment that motivates and supports them. When employees feel valued and appreciated, they thrive -- and so do their companies.

One of the best ways to foster a positive culture is through a points-based employee rewards and recognition program. In this blog post, we uncover what an employee rewards point system is and how it works.

What is a point system for employee rewards?

An employee rewards point system is a structured recognition program that allocates monetary points to employees for their achievements and behaviors. Employees can earn points through various activities such as completing major projects, achieving employee milestones, or demonstrating exemplary teamwork. These points can then be redeemed for rewards, ranging from gift cards and merchandise to charitable donations or even experiences.

Organizations often implement this type of recognition program to encourage frequent peer-to-peer recognition and build a culture of recognition. A points-based program allows organizations to implement both a top-down and bottom-up approach to employee recognition, ensuring all employees can participate and maximizing its impact throughout the organization.

How does a point system work for employee rewards?

An employee reward points system is typically managed through a digital rewards and recognition software, like Inspirus Connects, where employees can accumulate points and redeem them for rewards. These digital point systems can often be tailored to meet an organizations needs. 

Monthly vs Yearly Allowance

There are two main methods for sending points in a points system: monthly vs yearly points allowance. 

  • Monthly allowance points programs enable users to send a set amount of points each month. At the start of every month, each user's points will be replenished. This type of program can help organizations foster a culture of appreciation by encouraging employees to recognize their peers consistently.
  • A yearly allowance points program, on the other hand, provides employees with all of their points at the beginning of the year. All employees have access to their full amount of points and decide to send them however they would like throughout the year. For instance, they could send half of their points one month, and zero points the next month. 

Setting Points Tiers for Users

When setting up a program, administrators can often determine which employees are eligible for sending points. For example, they could allow all employees to send points or only allow their managers and leaders to. Depending on the platform, they may also be able to create point tiers for their staff based off specific criteria. For instance, they may provide managers with an additional amount of points for each direct report they have.

Points to Dollar Conversion

The conversion between number of points and dollars varies from tool to tool. However, there are a few common conversions organizations use:

  • 1 point = $1
  • 10 points = $1
  • 100 points = $1

Points Reward System Examples

There are endless options for how a points reward system can be used. From performance-based achievements to teamwork to special occasions, points make it extremely easy to reward all the important moments in an employee's journey. 

Here are a few examples of how points can be used:

  • Wellness initiatives: Encourage employees to develop healthy lifestyle habits by setting up monthly or quarterly wellness challenges and rewarding participants.
  • Core values program:  Recognize the employees who embody your company's core values by rewarding them with points for their behavior.
  • Peer-to-peer recognition: Cultivate a culture of recognition and appreciation by allowing employees to send points to one another, empowering them to celebrate each other's achievements and success.
  • Employee milestones:  Honor employees' big milestones by sending them points -- allowing them to select a meaningful gift of choice.
  • Special awards: Make prestigious awards, such as Employee of the Year awards, extra meaningful for your staff by presenting recipients with points.

Benefits of Employee Reward Point Systems

Cultivate a Supportive Culture

A points system encourages employees to frequently recognized their colleagues. When colleagues award points to one another for exemplary work or assistance, it fosters a supportive atmosphere where everyone feels valued, supported, and appreciated. This, in turn, can strengthen employees' connections, encouraging more collaboration and teamwork.

Encourage Employee Participation

Unlike traditional reward systems, which are often managed solely by an HR team or management, a points system empowers all employees to participate actively. By giving them a stake in the recognition process, employees are more likely to engage with the program, leading to increased morale and motivation across the board.

Create a Sense of Purpose and Belonging

When employees earn points for their contributions, it reinforces their sense of purpose within the organization. Knowing that their efforts are recognized and valued helps employees feel a stronger connection to their work and the company's mission, ultimately fostering a greater sense of belonging.

Improve Engagement and Productivity

A points system provides tangible incentives for employees to perform at their best. Employees can become more engaged and motivated to excel in their roles as they strive to earn points through exemplary work, collaboration, or achieving specific goals. This heightened level of engagement naturally translates into increased productivity and performance across the organization.

Get Real-Time Insight into Participation

One advantage of using a points-based system is the ability to track participation and engagement in real-time. This type of rewards program provides instant visibility into who is actively contributing and how frequently they are. Managers and team leaders can access dashboards or reports to see which employees are earning the most points and sending the highest amount of points to others.

Centralize Rewards and Recognition

A rewards and recognition points system helps centralize all rewards and recognition into one central location. Beyond distributing points, these platforms are often designed to also manage other employee rewards, such as service anniversary and milestone rewards.

How to Set Up a Points-Based Rewards Program

1. Outline the Programs Goals and Objectives

Start by clearly defining what you want the points-based rewards program to achieve.  Consider the following:

  • Are there any metrics you want to improve?
  • Are there any organizational goals this program can support?
  • What types of activities do you want the program to reward?

Understanding your goals will help you shape the design and implementation of the program, ensuring it aligns with your organization's objectives.

2. Establish a Budget and Select a Tool

Once the program's goals are outlined, you will need to establish a budget and determine which tool you will use. Identify how much you're willing to invest in the rewards program. For the budget, consider what types of programs you want to run, how many employees your organization has, and how many points you want to allocate to employees. For example, do you want all employees to have the same number of points, or will leaders and managers have more? To get a rough estimate for your budget, fill out our rewards and recognition budget calculator.

Once the budget is approved, select a suitable tool or platform to manage your program. Choose a user-friendly, scalable solution that aligns with your organization's needs and budget (like Inspirus Connects).

3. Determine Programs and Point Allocation

After determining a budget and tool, you will need to outline the specifics for each recognition program you plan to launch. Identify the activities, behaviors, or achievements that will earn employees points within the program. This could include peer-to-peer recognition, behaviors aligned with core values, completing projects, employee milestones, or monthly challenges. Assign point values to each program, ensuring they reflect the level of effort or impact involved.

4. Launch Program & Monitor

Once the programs are set up, you are ready to launch! Introduce the rewards program to your employees, clearly explaining how it works, what actions are rewarded, and how points can be redeemed. Consider hosting a kickoff call or sending out a company-wide email to generate excitement.

Once the program is underway, monitor its progress closely. Track employees' participation using available dashboards and analytics to understand engagement levels and the program's effectiveness. You can even solicit feedback from employees to identify areas for improvement and to ensure the program remains relevant.

Summing It Up

Point-based reward systems offer a dynamic approach to employee recognition and rewards, aligning individual efforts with organizational goals. Implementing a points-based reward system can be a strategic investment for organizations -- empowering them to cultivate a motivated and productive workforce that drives tangible results.

Ready to create a culture of appreciation? We can help! Talk with an Inspirus specialist today to see how we can help implement a tailored recognition program, or learn more about Inspirus Connects.

Graphic shows an image of Inspirus' digital reward shop on the left. On the right, the graphic sayas "Employee recognition & rewards made easy. Foster a culture of appreciation with a robust points-based recognition program. With Inspirus Connects, you can: streamline peer-to-peer recognition, offer rewards from 2,500+ rewards, automate rewards distribution. Get a points program."