While the concept of rewarding and incentivizing employees has been deep-rooted within organizations for decades, the market has been evolving in response to the following factors:

  • Increasing complexity of the R&R processes involved
  • Ability to serve a multi-generational workforce
  • Disruptions caused by advancements in the HR tech market
  • Increasing employee-centric focuses
  • Need to make employee motivation intrinsic
  • Demand for a holistic employee experience solution

The rewards and recognition (R&R) industry began to evolve at the end of the 20th century. During this time, companies understood the value of performance-based bonuses and tangible rewards like trophies and plaques. They recognized that these incentives were more effective at boosting productivity and motivation than traditional employee benefits like paid time off and health coverage. This led the R&R industry to start outsourcing, involving rewards manufacturers and delivery services.

In the next 20 years, companies understood that rewards alone couldn’t make their employees feel appreciated. As technology advanced, many market players began to focus on creating platform-based solutions for recognizing and connecting with colleagues. This was an important change driven by the tech revolution and remains central to the entire employee experience ecosystem.

Now, with next-generation technology gaining popularity, the industry is largely being defined by several tech-based players. By leveraging technologies such as Artificial Intelligence (AI), Machine Learning (ML), chatbots, automation, and predictive and prescriptive analytics, their R&R platforms have become smarter, more intuitive, and highly user-friendly.

Key trends and use cases in the R&R platform space include:

#1 AI- and ML-based use cases for a smarter R&R platform

AI-based engines allow HR managers and program administrators to align employees with the organization’s values and objectives through KPIs and benchmarks. By implementing ML, employers can deliver personalized content and tailored rewards and benefits to employees, thus driving better incentive programs.

The most common use case of this technology is building a culture of recognition by sending just-in-time recognition reminders and nudges to team managers and senior leadership on employees’ service anniversaries and other relevant life events. But more recently, organizations have begun using AI to analyze employee’s sentiments and gauge word patterns to understand employees’ emotions. This helps HR team leaders develop strategies to uplift employees’ moods, stem attrition, and ensure a superior employee experience.

Another popular use case is around Diversity, Equity, and Inclusion (DE&I). Here, specific words and phrases are fed into the system to detect bias toward employees based on their gender, race, etc. When it detects a biased statement, it flags it to the user and suggests appropriate language changes in the message, thus providing a learning experience for the user. This is an essential use case as it addresses the growing attention and unrest caused by racist behavior and gender inequality around the world.

Chatbots are frequently used in employee experience suites for engagement analytics to track employees’ sentiments through one-on-one “conversations” with employees. The chatbot technology can also be embedded within frequently used applications such as Microsoft Office and Slack to streamline recognition and send appreciation.

Rewards services can be enhanced by bringing together automation and intelligent chatbots, wherein the chatbots handle complex rewards issues regarding ordering, processing, tracking, and delivery of rewards and provide an immediate resolution.

#2 Automating the R&R experience

Automation is an essential tool for improving the employee experience and, thus, as part of an R&R platform. Automation enables automatic delivery of rewards and recognition to employees on special occasions, thereby reducing the administrative burden on human employees. It also allows managers to automatically approve pending nomination requests for monetary recognition.

Use cases that enhance the accessibility of the platform for users are automatic language translation through detection of an employee’s geographical location and automatic application of a standard of living/cost of living increase for employees wherever they work in the world.

Some leading service providers are also exploring use cases using Robotic Process Automation (RPA), a more advanced form of automation, to develop, for example, automated workflows that track data on the time taken to send an employee recognition or for an employee to redeem rewards points. Such an operation is performed by the vendor on behalf of the client company.

#3 Drawing insights using advanced analytics

Enterprises are increasingly using robust data collection and analytics tools to collect and visualize data on their workforce, and to track key R&R metrics such as employee reach, points utilization, and managers’ and team members’ recognition moments to calculate employee recognition scores. These are particularly useful for decision-makers in evaluating the effectiveness of the platform and developing recognition strategies to bolster the R&R program.

An extremely valuable use case relates to learning and development for managers. This combines the power of eclectic data assimilation and prescriptive analytics to recommend targeted learning and training modules to managers on the importance of recognition and how to identify impactful recognition moments.

Predictive and prescriptive analytics can also be highly valuable when gathering Voice of Employee (VoE) insights. Here, employees’ responses to polls and pulse surveys are correlated to outcomes related to employee productivity and satisfaction. Leaders and HR personnel then use the systems’ recommendations on next steps and possible solutions to issues such as how to boost employee sentiment, decrease attrition, and build engagement levels throughout the organization.

Plans going forward

Augmenting the R&R platform with newer technologies and introducing more use cases into the solution is critical to the HR transformation journey and to ensure maximum ROI for the enterprise. While the role of the service provider is to build such advanced solutions, enterprises need to update their vision for R&R and accommodate plans for program design and implementation.

Learn more about the business impact of frequent recognition for your organization. Download the Brandon Hall report now.