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The psychology behind rewarding your workforce

Published:31 May 2022

Human psychology is deeply rooted in the history and concepts of reward and recognition. You could argue it is synonymous with ‘animal’ psychology or, at least, closely related, (hence we have such terms as worker bee and drone, workhorse, computer monkey and lab rat. Therefore, animal psychology is an interesting and apt topic to mention in correlation with the workforce. After all, animals still feature as ‘employees’ in some fields of work, like labs, movies, farms, among others.

In an abstract for a psychology paper featured on ResearchGate, ‘The importance of reward-evaluating mechanisms for animal welfare,’ (van der Harst and Spruijt, 2009), states that "welfare is determined by the balance between positive and negative experiences. This implies that an interaction exists between stress- and reward-systems in the brain.” It hypothesises that there is a direct correlation between negative experiences and the need for counterbalance with positive outcomes.

And so it follows: if you want productivity and high output, offer incentives to achieve more than the minimum requirement. These can be both consequentially short- or long-term. The psychological theory behind employee rewards is a pretty simple one.

But then why do so many organisations still get it wrong? Lack of foresight, introspection, empathy? Or is it unevolved human nature that gets in the way? We know what Freud would say about that. The psychology behind it can be intricate when asking what went wrong?’, but the psychology behind the answer ‘why it went right’ is straightforward. Let’s take a look.

The psychology up close and personal

Consider animal psychology and the idea of expectancy, motivation, and equity from a TED Talk with Franz de Waal, a primatologist studying moral behaviour in animals. Two capuchins are given a task for immediate reward. The left capuchin gives a stone to the scientist, and she is given some cucumber. In the next cage, the right capuchin gives a stone and receives grapes. Immediately, the left capuchin becomes frantic with anxiety, tests the stone to see if there is anything wrong with it and tries the task again. When she is given cucumber the second time, she becomes agitated, rattles the cage, throws the cucumber at the scientist, and demands through her stressed demeanour to be paid fairly and treated equally.

How many of us have felt that same anxiety and agitation at work? We, like the left capuchin, can see when the other capuchins (humans) are being favoured over us. Favouritism and fairness are antonyms. One has a proper place in your organisation’s reward scheme, and the other (namely favouritism) needs to be eliminated from it. Hopefully, it has never taken hold within your office culture.

Two basic types of rewards

Reward management is not only concerned with pay and employee benefits. It is equally concerned with non-financial rewards such as recognition, training, development and increased job responsibility. There are two basic types of reward taken from psychology that we will discuss: intrinsic and extrinsic. The abovementioned principles of motivation

The Intrinsic The intrinsic reward is emotive and is used to reward through satisfaction, i.e., intangible benefit, a concession, like recognition, positive feedback, trust, and inclusion. Intrinsic rewarding promotes the development of an emotional bond between you and your personnel and an obvious necessity for any reward scheme to thrive, no matter how many extrinsic rewards, such as money, prizes, vacation days, and gift cards you throw into it.

An intrinsic reward should be incorporated into every employee reward scheme. But a word of warning: intrinsic rewards should be used to provide satisfaction; it should not be used to pacify the employee – this would be lip service and is a false reward that will eventually cause damage to your company culture.

The Extrinsic The main kind of reward this paper discusses is the extrinsic reward. We focus on this type of reward because it is not just an idea, it is tangible and can be offered through a service provider. It’s easier to implement as a scheme because of its demonstrable nature. Examples of extrinsic work rewards and gifting are benefit, perk, gift, and remunerative options, like a bonus, pay rise, company stock, and promotion. Some of these are long-term rewards and others are short- term. They relate more to the outward ‘performance’ of your personnel versus their inward ‘happiness’ (Reif, 1975). We could continue for pages and volumes on the intricacies of psychology in the workplace, but understanding the above information is enough to set up the fundamentals underlying your employee rewards programme.

Moving on now, to the crux of the matter, the ‘how’ and ‘why’ of staff rewards and corporate gifts...

The ’why’ for rewarding your workers

For improved productivity and engagement. Rewards schemes sweeten the deal, making the contract more appealing (the hook not only to catch the fish but to keep them swimming happily in your aquarium) – they are a dollop of whipped cream and cherry on top of the remunerations package. Why? Reward schemes: _▸ Entice top talent ▸ Enhance engagement ▸ Increase productivity ▸ Strengthen retention, thus thwarting unnatural attrition (or swim to warmer waters). _

The ‘how to’ for rewarding your employees

The rewarding employees concept we know is simple, as is the theory behind it. How to do staff rewards is simple too – recognise all employees equally for the efforts they put into the company. If others do more, give them extra to compensate according to the determined scale. The question ‘how much to spend?’ confuses many and anxiety for companies on a tighter budget than others. Make your rewards frequently achievable and reward as and when the achievement is reached. The immediate reward is not only a great way to train a puppy, it is effective for humans too. This doesn’t mean that every reward has to be a big expense or a big song and dance. It should be a recurring practice that your employees can rely on. This will develop trust and continued workflow.

Simply Thank You is here to help. We specialise in corporate gifts, customer rewards and employee treats. From handwritten notes sent from us in your own fonts to personalised gifts wrapped in your branding, we can help you show how much you care. Contact us today to learn more.