Overcoming reward management hesitations
Some customers find themselves a bit hesitant when it comes to choosing which rewards to offer to their employee advocates or even deciding whether or not to offer them at all. There can be many reasons for this, of course, but generally speaking, people don't really know where to start, which rewards are good rewards and fit their company culture, or even how taxation around them even works. Let's clear the air and talk about all of these questions!
Adding a layer of gamification and rewards to your employee advocacy program is a great way to spark engagement.
It brings a fun element to your community, and employees are more motivated to participate.
In this article, we share some examples of how you can reward your employees and recognize them for their efforts and their commitment to being your advocates.
You might find yourself hesitant about implementing rewards, wondering how and where to start. We’ve written this article to provide you with more information and guidance to implement your best recognition program and strategy:
A few questions you may have:
- Is it complicated and expensive?
- What about the taxes?
- How about reward management?
Is it complicated and expensive?
The budget for rewards in an employee advocacy program depends on different elements, such as the size of your organization, the program's scope, and the desired level of employee engagement. That’s why it’s important to determine the budget beforehand in order to be able to configure rewards in the best way possible, in accordance with your company values and goals.
Here are some considerations to help you establish a budget:
- Types of rewards. Consider the kinds of rewards you plan to offer: rewards can range from tangible items such as gift cards, merchandise, or experiences to non-monetary incentives such as recognition, career development opportunities, or extra time off.
Real rewards typically require a financial investment, while non-monetary rewards may have a lower or no direct cost, which might make them easier to implement, but also need to be more thought-out.
- Frequency and intensity. Determine how frequently you want to reward employees and the intensity of the rewards. Will you provide rewards in the platform for employees to choose from and exchange their points for their favorite special rewards?
- Internal resources. Evaluate the availability of internal resources to manage the program. Consider the time and effort required for rewards administration and distribution, how much time the community manager has on their hands to handle all of this, etc.
- Scalability. Consider the scalability of your program: if you plan to expand the program in the future or include additional employees, factor in potential growth and adjust your budget accordingly.
- Monitoring and evaluation. Allocate resources for monitoring and evaluating the program's effectiveness and the role rewards are playing in that.
Remember that the budget for rewards in an employee advocacy program can be flexible and evolve. The program’s results and participants’ feedback are essential to regularly review and adjust your budget to ensure it aligns with the program's objectives and the overall financial capabilities of your organization.
What about the taxes?
In Belgium, the taxation of rewards allocated to employees is determined by the nature and value of the rewards. Here are some key points to consider:
- Non-taxable benefits. Certain benefits provided to employees may be exempt from taxation in Belgium. These include meal vouchers, eco-vouchers, and public transportation pass if granted in line with the regulation in force.
- Taxable benefits. Other employee rewards or benefits may be subject to taxation. The value of these benefits is usually determined on a lump-sum basis and must be included in the employee's taxable income. Examples of taxable benefits can consist of cash bonuses, gift cards, or company merchandise. The employer is responsible for calculating and withholding the appropriate taxes on these benefits.
Providing company merchandise as a reward within a reasonable limit is generally easier to manage in terms of taxes compared to cash bonuses or gift cards. If the merchandise is branded with the company logo or used during business activities, it may be treated as a deductible business expense rather than a taxable benefit.
Ambassify hat as an example of company merchandise
Another great example we see with other customers is offering charitable contributions as a reward. In many countries, charitable contributions made by a company are tax-deductible. This means that the company may be able to deduct the donated amount from its taxable income, reducing its tax liability.
A few examples of charitable rewards in our Ambassify Community
Some employees may appreciate supporting a cause they care about, while others prefer more tangible or personal rewards. It's important to gather feedback and consider the diverse preferences within your employee base to ensure the effectiveness and engagement of the program.
Smaller gifts such as Bongo vouchers, which have a value less than a certain threshold (e.g., 50 euros), may be considered a social benefit in some countries and may be exempt from taxes in the hands of the employee. However, the company may not claim a tax deduction for these expenses.
Another example is that of company milestones. Rewarding employees with a cash bonus upon achievement of company milestones are subject to taxes and social security contributions.
While taxes are an important consideration when implementing a rewards program, they should not discourage you from adding a layer of gamification and rewards to your employee advocacy program, as they can play a really important role in stimulating and maintaining engagement.
How about rewards management?
One aspect to consider is that some employees who are participating in the program as advocates may choose to wait to claim their rewards. Here are a few reasons why this might happen:
- Leaderboard Motivation. Some advocates may prioritize maintaining their position on the leaderboard or achieving a higher ranking over claiming their rewards. They might see the recognition and status associated with their position as more valuable than the immediate reward itself.
- Accumulating Points: Employees may save their points or rewards to get a higher number and redeem them for more valuable rewards in the future. This strategy allows them to work towards a specific goal or target, increasing their motivation and satisfaction when they eventually claim their desired reward.
As a program administrator, you don’t have to fear that everyone will start claiming their rewards immediately. It's good to provide a variety of reward options and create a flexible framework that allows employees to choose rewards based on their own preferences and goals.
Managing rewards in a larger company can be more challenging due to the scale and complexity of the program. In such cases, partnering with a company like Sunday can help you.
Overall, understanding the motivations and behaviors of employees about rewards can help organizations design and implement effective reward management strategies. Whether it involves employees deferring rewards to maintain their leaderboard position or saving points for higher-value rewards, companies can tailor their programs accordingly to maximize employee engagement and motivation.