8 Common Mistakes Retail Employers Make When Trying to Reward Team Members

Most people would agree that rewards and recognition programs can be effective at motivating employees. Data from Reward Gateway shows that 90% of HR professionals believe that these programs help drive business results. In addition, research by Deloitte found a high correlation between employee recognition and engagement. The study found that organizations that implement recognition initiatives have 14% higher worker productivity and performance compared to those that don’t. 

More engaged workers also tend to stay longer. This is especially important in the retail industry, which sees an employee turnover rate of 60% — way above the general average of 17.8%. To retain staff members over the long term, you need to keep them happy and motivated. And one of the ways to do that is through an employee rewards program.

That being said, not all employee incentive programs are created equal. To maximize the benefits of these initiatives (e.g., increased employee morale, efficiency, etc.), you need to make sure that you’re implementing the right strategies and tactics. 

To help you accomplish this, we caught up with a few experts and asked them to share the most common mistakes retailersemployers make when trying to reward team members — and what to do instead. 

Check them out below. 

Relying on a single person to decide who gets rewarded or recognized 

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When it comes to retail staffemployee recognition and rewards, someone obviously needs to decide on who gets the prize. However, giving this responsibility to a single person (usually the store manager or supervisor) is a mistake, says Craig Miller, co-founder of Academia Labs LLC.

“People tend to be very subjective and tend to favor one thing over the other so giving the deciding power to just one person is not beneficial at all. Though the supervisor knows the tasks and productivity levels of each of the members of her team, there is still a possibility that she may favor someone, consciously or subconsciously,” he says. 

How to avoid this mistake

To avoid this mistake, Miller recommends creating an awards and recognition committee, which consists of a group of employees. This committee will be tasked with deliberating on who deserves an award. 

It’s a fair process, and according to him, it will help prevent any employee doubts that may arise.

You should also change the members of the committee every year in order “to maintain the honor and excellence of the awarding system.” 

Failing to get feedback from retail employees ask for employee input

Your staff members are the ones getting the rewards, so it’s only fair to seek their input when devising your strategy. Failing to do so and assuming that you know what’s best for your team “takes away the agency and autonomy of employees themselves,” says Ryan Craver, co-founder of Mallary by Matthew.

If you don’t get input from your team, you could end up with a rewards strategy that doesn’t motivate or appeal to them. 

How to avoid this mistake

Be sure to obtain feedback from your team before launching your employee rewards program. According to Craver, this can be done through “an anonymous survey that lets employees rate the most impactful ways employers can recognize the efforts of their employees.”

“Although a small gesture, this is a necessary step to ensure employees are as motivated as possible,” he adds. 

Not being transparent with your process

Once you’ve ironed out the details of your program and how it works, don’t forget to share it with the rest of your team. Skipping this step can breed distrust among your employees. 

“One common mistake when rewarding employees is the lack of transparency on how the awardees were chosen. This can result in the employees doubting the validity of the award and may create further divisiveness in the company,” says Tony Grenier, CEO of Instrumental Global.

How to avoid this mistake

“To prevent this from happening, the awards and recognition body should properly explain the rewards categories and the grading system so that employees know where they stand. This way, when winners are announced, employees will not doubt its validity,” says Grenier.

So, make it a point to explain your rewards program prior to implementation. Depending on the complexity of your initiatives, it may make sense to create explainer documents or FAQs that outline:

  • The criteria for choosing awardees
  • Who’s involved in selecting winners
  • How the process works
  • When winners will be announced 
  • The types of prizes that will be awarded

Giving away “one-size-fits-all” rewards 

Every person is different and key motivators will vary from one retail associateemployee to the next. That’s why it isn’t recommended that you give the same reward across the board. 

“One of the primary pitfalls of an employee rewards program is thinking there’s any sort of ‘one-size-fits-all’ model,” remarks Braden Norwood, Product Quality Manager at VTR Learning. “Before you can ever think about implementing an effective rewards program, you must first ask what motivates your employees.”

Scott Hasting, co-founder of BetWorthy LLC, agrees. “The reward that suits one employee will not always suit another one. For instance, my previous company gives out luxury watches to those who have stayed in the company for ten years. Though this is highly appreciated by most, it is not always the need of each employee. Some would still prefer to receive cash incentives as rewards,” he says. 

Aside from varying preferences, you should also consider the value of the award in relation to the effort or result that you’re recognizing. As Norwood points out, “Giving a $50 bonus check to an individual whose efforts or ideas saved the company thousands of dollars is weak at best and potentially insulting.” 

How to avoid this mistake

Steer clear of one-size-fits prizes and be more thoughtful about the rewards that you’re giving away. For starters, ensure that you’re actually giving rewards that each employee would value. You can do this by asking what every team member values and what would motivate them the most. 

Hasting recommends creating a program that lets employees choose the prizes they’ll receive. “Choices can range from material gifts like watches, laptops, and other electronics, as well as monetary rewards, and vacation leave credits. This way, you can cater to each of the awardee’s needs,” he says.

In addition to employee preference, think carefully about the action or contribution that you’re rewarding, and make sure that the prize you provide is proportionate to it.

Focusing solely on monetary rewards

There’s nothing wrong with monetary incentives, but concentrating on these types of rewards alone can diminish motivation and interest over time. 

“While employees may appreciate the extra money, it may not be enough to keep them engaged for long,” comments Curtis Lawson, managing editor of Project Gunner. “Furthermore, cash rewards lose their freshness after a while and may fail to elicit any enthusiasm from future beneficiaries.”

Not to mention that by focusing 100% on cash rewards, you could be ignoring a segment of employees who aren’t motivated by money. Some people, for instance, value things like recognition, time, and flexibility even more than monetary incentives. 

How to avoid this mistake

Provide a mix of monetary and non-monetary benefits. Aside from just cash rewards, for instance, you could also offer tokens of appreciation and recognition — such as badges, certificates, etc. 

Giving employees more time and flexibility — such as bonus vacation days or privileges to get more favorable retail shiftsset their own schedule — may also be good options. 

Waiting too long to give rewards or recognition

The cheesy line that goes, “If you love someone let them know” also applies to your staff. Failing to show employee recognition in a timely manner could result in team members feeling that you don’t value them. 

As Francis Locknear, founder of TheCostGuys puts it, “Realizing the value of someone a little too late can be detrimental to their loyalty to you and your organization. Your employees may already know now how valuable they are to your company. However, failing to see that immediately may make them feel less appreciated. The longer the recognition comes, the less relevant it may become.”

Unless you do it on time, in full, at every site, you are not executing at all

How to avoid this mistake

When you see a n retail employee doing a good job, tell them sooner rather than later. Always recognize their efforts. This doesn’t necessarily mean hosting large awards ceremonies every day. 

However, finding opportunities to recognize team members more often (e.g., during your daily huddles or weekly check-ins) can go a long way in ensuring that your staff members know how much you appreciate them. 

Thinking that rewarding employees is a one and done activity

Being inconsistent with your rewards initiatives, or worse — just doing it once or twice — communicates insincerity and a lack of commitment to employee recognition. 

“Rewards programs are not just supposed to be a one-time thing, but rather a continuous cycle,” says Amy Wampler, CEO at Spartan Mechanical. “Just rewarding employees once is not enough — you need to be consistent and make it a long-term program so that employees can have something to look forward to.”

How to avoid this mistake

The best way to keep the spirit of employee recognition alive is to be consistent with it. Hold awards sessions regularly. Make them official by putting them on the company calendar. 

“In my organization, we do a rewards and appreciation ceremony every month in order to keep the tradition alive and give workers something to look forward to at the end of the month, shares Wampler.

Only rewarding high-performance targets

Rewarding associatesemployees who contribute to sales or revenue targets is important, but focusing on these things alone can create a cutthroat working environment that only values actions that directly contribute to the bottom line. 

“Performance should not be the only scale or basis for rewards. When shortlisting employees for recognition, factors such as effort and integrity should also be considered. Employees who adhere to company principles or who are of the most supportive team players deserve recognition too,” says Katherine Brown, founder and marketing director of Spyic.

How to avoid this mistake

When considering employee rewards, go beyond sales contributions. For instance, you could think about your company values, then recognize workers who exemplify them. 

Wampler recommends digging into the attitudes and behaviors that employees demonstrate when doing their job. 

“What we do in my organization is that we do not just recognize workers on hard-set performance targets…. Those are not the only indicators of a job well done, albeit they are important,” she says. 

“The ‘How’ part is also very important to me. How did the person achieve his target? Did he involve his team? Was he a good team player? Was he honest or did he cheat the customer just to acquire that sale? Even workers who show learning ability and desire to succeed are awarded in my organization — because I make sure that the culture of my workspace remains good, and does not turn toxic after the implementation of a recognition program.” 

Final words

Employee rewards and recognition programs can be effective for retailers, but only when implemented properly. Having a fair, thoughtful, and transparent process will ensure that the right team members get the rewards and recognition they deserve. 

Bindy offers a number of tools to help you evaluate and recognize your retail employees. Explore our platform or take a free trial to discover how you can use our software to improve worker performance in your organization.

About the author:

Francesca Nicasio is retail expert, B2B content strategist, and LinkedIn TopVoice. She writes about trends, tips, and best practices that enable retailers to increase sales and serve customers better. She’s also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores.

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