The Power of Recognition & Rewards in Retail Industry

Rewards and recognition in the retail industry is a 46 billion USD business. With more and more companies investing in rewards and recognition programs for their employees, employees all around the world are finally receiving the support they were lacking.

Rewards and recognitions for various achievements at work helps employees feel special and actively engages them. 

Many surveys and research has proved the fact that the more the employees are recognised for their positive contribution at work, the more appreciated they feel at the workplace which in turn boosts their productivity and performance.

In this blog, we will look into the various types of rewards and recognition techniques that retail companies can use for their employees and how to celebrate employee success to positively impact them. 

The significance of employee recognition 

Employees are the most important resource for an organization. Employees help grow the company, achieve its goals and objectives and help in creating a brand in the industry that customers and clients will want to associate with.

Retail, of all industries, is one of the most competitive and saturated of all. Employee attrition and turnover is extremely high (estimated at 60 percent) in retail because of the lack of recognition that exists in this industry. 

A study on the meta analysis of employee reward programs in retail companies found that employees had a stronger employee performance with a surge of 27 percent in productivity. By improving employee recognition at the workplace by 15 percent, companies were able to capture 2 percent additional profits.

Research also proves the fact that employee rewards and recognitions go hand in hand with employee satisfaction, productivity and performance. Some of the incomparable benefits of having rewards and recognition at work include:

• Better work culture
• Positive growth and teamwork amongst employees
• Better attendance and willingness to increase work quality
• Better productivity, achievement of targets and sales quotas
• Healthy performance and lower turnaround of employees.

Types of recognition in retail 

The labor statistics bureau identified that there was high turnover in the retail industry with a high number of job openings (at 9.6 million) by August of 2023. The rate of job openings have been at an ever high because of the high attrition of 60 percent in the industry.

Employees reported that this was majorly because of the lack of support and encouragement from the senior management at the workplace which resulted in quitting amongst employees. 

Retaining employees who are experienced, trained and well invested by the employers is a major concern today in the industry. Recognition for achievements and major milestones in the career path of employees can help in retaining good employees and lowering turnaround. Here are some types of recognition that works for retail companies:

1. Informal recognition through praise and appreciation

This is the most common type and perhaps the simplest method all retail companies should adopt. A simple appreciation for achievement of various kinds at the workplace can help motivate employees.

Examples include greeting cards, applause and recognition in front of team members, a written note from superiors or the CEO, or even a social media shoutout, etc. 

2. Formal recognition programs and awards

Formal recognition programs are more sophisticated and involve handing out rewards in either form or cash to complement them for their good job done. This includes incentives, digital sales rewards, cash bonuses, gift cards and certificates and vouchers that they can redeem.

This is a more common practice and is being utilized to promote employee engagement and positive impact on employees and at the workplace. 

3. Peer-to-peer recognition and team-based acknowledgments

Another great way to reward and recognize employees is to hand down the power to them. By using a peer-to-peer recognition system, employees can recognize team member contributions and award each other to build team spirit and overall productivity.

Team based acknowledgement system is widely used in the retail industry as it helps in recognizing individual contribution within a team that increases the team spirit. 

Rewards and incentives

Another popular type of recognition in the workplace is by using rewards and incentives. This is the more common and perhaps the more appreciated form of recognition in the workplace.

Studies by researchers on job stress and performance linked rewards and incentives revealed that employees who were rewarded for their achievement appropriately had a significantly positive outlook on their job. 

There are many kinds of rewards and the choice of reward type and the mix of reward opportunities should be varied from time to time.

Giving employees some freedom and flexibility to choose the kind of reward that they would be most benefited from is also an important factor. Here are some of the popular reward options in the retail industry:

1. Monetary rewards

Monetary rewards are the most preferred kinds of rewards in the industry. Most employees feel engaged and appreciated when their performances are rewarded using cash based bonuses and sales commission and incentives.

Companies can make use of small gift cards and certificates and can go upto large one time bonuses, quarterly performance based incentives etc. 

2. Non monetary rewards 

Non monetary awards are just as effective as monetary ones. In fact, studies show that not all employees are into monetary appreciation - some employees feel just as satisfied and recognized with non monetary benefits such as appreciation notes, personalized gifts, honor certificates, badges, time offs etc.

This way, employers can truly show their staff how much they appreciate their efforts in deeds and form. 

Milestones and achievements

Celebrating employees' special moments helps connect employees with employers. Special moments can be both professional or personal. Employers who make a note of professional achievements such as sales wins, completion of 5 or 10 years of tenure with the company, overachievement of target for a consecutive period of time, excellent reviews or testimonials from clients and customers etc, can celebrate such achievements by rewarding them with something special. 

Not just for professional achievement, celebrating success should include personal achievements too such as birthdays, anniversaries, promotions, parenthood etc.

These personal achievements when recognized and celebrated in the office along with peers and team mates can hold special value for employees and help instill a positive work culture. Some of the popular types of milestone and achievement celebration for employees include:

1. Celebrating individual milestones

This includes things like birthdays, wedding of an employee, stepping into parenthood, promotions and other such personal achievement. Professional achievements like consecutive top performance or overachieving targets, completion of long tenure etc should also be chosen by management and celebrated. 

2. Recognizing team achievements

Sales employees who work as teams may sometimes not be rewarded individually. Since their output is group based, employers should come up with team achievement rewards that help recognize the efforts of the entire team such as continuous best performance, testimonials from clients or customers, completion of long term projects etc. 

A study revealed that 75 percent of the employees left their managers and not their work. A work culture where the superiors do not take notice of employee achievements and does not celebrate their success as the companies own, tend to lose out on hardworking, trained and valuable human resources over time.

Given that retail jobs are at an all time demand, it is easier for employees to find better jobs than employers to find better sales staff. 

Customer feedback and testimonials

Customer feedback is a valuable and often overlooked tool that can help in both training and recognizing your employees on a job well done. As a retail employer, you must have a system to capture feedback from your customers on how well your employees fared while selling a product or service to them.

This feedback or testimonial is an excellent way to find out if your sales team needs additional inputs, training, tools to succeed or if they are doing a great job and need to be rewarded for the same. 

By means of including customer success stories, testimonials, customer logs or videos appreciating their experience with the employee or the team is an excellent way to congratulate employees or sales teams on a job well done. Not only do they feel an instant boost of confidence and pride, they will strive to repeat such good work in the future as well. 

Losing good sales employees who work in the frontline on hourly wages can cost a company nearly 1500 USD. Whereas employers who utilize the most simplest and basic means of recognition tools or reward programs can easily retain valuable human resources.

Employee of the month and performance metrics 

Employee of the month is a common type of employee appreciation where on employee is chosen on the basis of various criterias such as:

• Productivity and performance
• Customer feedback and satisfaction score
• Helping coworkers and team spirit
• Contributing to overall organization goals etc

Using these metrics, employees can be rewarded both monetarily or non monetarily. Social media shout outs, putting up signs in the office or on office networks, team applause and superior recognitions can help create a positive work atmosphere and encourage employees to improve their productivity and performance. 

Employee of the month award can be clubbed with a small token of appreciation such as personalized gifts, gift cards, vouchers, additional retail discounts and other customized options that make employees want to win the reward and therefore work towards it. 

Measuring the impact of recognition

Recognition and reward can be an excellent way to generate employee engagement and deliver a world class working experience for your employees. To give out the best rewards and recognition to employees, employee performance should be evaluated using various KPIs:

• Sales attainment and quota achievement
• Overall turnover and revenue generated 
• Customer feedback and satisfaction score
• Referrals generated 
• Conversion rates from leads to customers
• Closing rates for sales employees
• Length of sales cycle
• Overachievement of target etc. 

A company that has over 80 percent participation rate from employees in rewards programs indicates that employees are happy and motivated by the existing program.

Managers should also keep track of employee feedback on how and what they feel about the current rewards and recognition program in place and what news measures can be added to make them better. 

Based on the market scenario, competition in the industry, needs of the employees and the market trends, managers and employers must constantly innovate and come up with new and creative ways to reward and recognize employees. 

Conclusion

Sales rewards and recognition is a staple in all the new age companies. Startups and unicorns today in the global market believe that employees who are happy and engaged in the workplace contribute to the overall growth and development of the company and therefore, rewarding and recognizing them for their efforts is a must.

Today’s sales workforce consists mainly of millennials and it is an observation that millennials seek more recognition and appreciation at work than other age groups. 

Using a robust rewards and recognition program, employers can engage employees and provide for better job satisfaction. It also helps in creating a work atmosphere that has a healthy competition, positive work environment and a progressive attitude at work.

All in all, appreciating sales employees will help in better productivity in the retail space and help improve their interaction with customers which eventually helps in boosting the brand value in the market.

By simple monetary and non monetary rewards and recognition systems, employers can ensure better employee retention thereby preserving the cost incurred on human resource.