Driving Engagement with Experiential Employee Rewards

Right now, more than half of your employees are reviewing various job sites.

They flick through the most recent listings, looking for a new organization with whom to share their talent.

But for many employees, it’s not the prospect of a new career or higher salary that makes them leave. They miss engagement and the sense of appreciation at work.

Today’s HR leaders, must, therefore, understand that to engage and retain the best human capital, they need to change how they make employees feel valued and recognized. They need to recognize employees’ emotions to strengthen their connection with the company.

In this guide, you’ll learn about the industry movement towards experiential rewards and how the most successful companies are utilizing this strategy effectively. You’ll discover how developing a memorable recognition program helps:

  • Boost employee engagement
  • Make your staff more dedicated to their work
  • Retain them for longer

Along the way, we’ll illustrate the business case and provide the framework to help you launch a program at your organization.


Engaged employees are your company’s strongest asset.

Countless research studies have shown a direct connection between employee engagement and an organization’s growth.

A Harvard Business Review’s report titled The Impact of Employee Engagement on Performance found a connection between high-performing companies and a focus on employee engagement. Companies that prioritize engagement significantly outperformed the rest in every single category.


The effect of employee engagement on several key business metrics.

Data source

While the study noted performance improvements across the board, there were several areas with significant differences described below.


Area #1. Customer Service
The level of service your organization provides links directly to customer satisfaction, loyalty, and retention.

Companies with high employee engagement enjoy twice the customer loyalty. (source)

Companies with the greatest engagement scores also receive 10% higher customer satisfaction ratings? (source)

Engaged employees showcase a positive behavior and attitude towards their work, that, in turn, leads to better service.


Area #2. Productivity and Performance
Engaged employees are motivated by factors that go beyond getting a paycheck and holding a steady job. They care about what they do and recognize the importance of their efforts to the company’s success.

In fact, Gallup’s State of the American Workplace report tells us:

“Data show that engaged employees spend 4.5 hours of their day so absorbed in their work that time passed quickly for them.”

Another study that analyzed 199 research studies across 152 companies in 44 industries and 26 countries discovered an 18% drop in productivity and performance between organizations at the top 25% of engagement and their bottom counterparts.


Area #3. Revenue
The effect of engagement on revenue is irrefutable.

For example, a whitepaper by Kenan-Flagler Business School entitled “Focusing on Employee Engagement” reveals:

“With high levels of engagement, firms can see revenue growth 2.5 times that of their peers and a 40 percent reduction in expensive staff turnover.”

Furthermore, it adds that having a motivated and “enabled” workforce can lead to revenue growth up to 4.5 times that of peers.

An Aberdeen research report, titled Employee Engagement: Paving The Way To Happy Customers, shows that companies with engaged employees see a 26% increase in annual increase in revenue.

Finally, Gallup’s 2016 meta-analysis that examined the effect of employee engagement on a company’s bottom line discovered that:

“The top-quartile business units outperform bottom-quartile units by a staggering 21% in profitability.”


Addressing Burnout

Engagement yields productivity, better customer service, and higher revenue; burnout causes the reverse. Low productivity, high turnover, and a drop in quality of service are just some of the impacts of a burnt-out workforce.

Enlightened organizations recognize that burnout isn’t always a personal problem and take steps to address the causes. As Marissa Meyer, one of the Silicon Valley’s most famous working mothers pointed out (cited via Eric Schmidt, How Google Works):

“Burnout isn’t caused by working too hard, but by resentment at having to give up what really matters to you.”

To battle burnout, organizations must recognize the importance of an employee’s life outside work and encourage them to engage in non-job-related activities. A recognition program that helps employees connect with their community and loved ones through experiences is a step in the right direction.


Keeping Employees Engaged and Avoiding Burnout Is an Ongoing Challenge (And We Don’t Always Win)

According to the most recent State of American Workplace report by Gallup, only 33% of US employees are engaged at work. Furthermore, just 21% believe their organization manages them in a way that motivates them to do an outstanding job.

“Organizations are not giving them compelling reasons to stay, so it should come as no surprise that most employees (91%) say the last time they changed jobs, they left their company to do so.”

Connection to peers and purpose gives employees a reason to remain with their organization. It’s also something, as the above data confirms, organizations struggle to facilitate.

The first step to developing an engaged workplace is understanding its definition.

Kevin Kruse, one of the leading experts on employee engagement defines it as:

“[…] the emotional commitment the employee has to the organization and its goals.”

The phrase, “emotional commitment” holds the key to unlocking higher engagement. Emotional commitment is what makes engaged employees care about their work and the organization beyond personal objectives such as a paycheck or promotion. Instead, dedicating themselves to achieving the company’s goals. It spurs initiative, responsibility, and involvement.



Motivated by emotional commitment, employees take additional steps to eradicate a problem, even if it falls outside of their competence. They commit themselves to their tasks and go beyond the required minimum. What’s more, they do so without being prompted by a superior.


Recognition fosters emotional commitment

Recognition is one of three emotional drivers that affect engagement, alongside pride+ satisfaction with work, and stimulation + challenge. However, organizations often fail when showing appreciation at work.

The State of Employee Recognition report by Deloitte shows that although 73% of companies have a recognition program, only 58% of their employees know about it. Framed differently, 42% of companies are missing an opportunity to build emotional connectivity and advance the goals of the organization.




According to a joint report by WorldatWork and ITA Group called Trends in Employee Recognition, the top recognition goal for many organizations is to recognize years of service, typically with a certificate or a plaque. Evidence suggests that acknowledging specific achievements leads to far higher returns.

Organizations know the value of recognition, yet they operate programs which are often forgettable and contradict proven strategies.


Why and How Experiences Boost Employee Engagement

For most, experiences provide far greater satisfaction than physical things. Cornell University professor, Thomas Gilovich explains:

“People often think spending money on an experience is not as wise an investment as spending it on a material possession. […] But in reality, we remember experiences long afterward, while we soon become used to our possessions. At the same time, we also enjoy the anticipation of having an experience more than the anticipation of owning a possession.”

Outdoor trips, events, tours, classes, and getaways give us the chance to gather new experiences and enhance social relations with friends and family.  Our internal shows, when given the opportunity, 67% of reward recipients select an experience to share with others.

At the same time, long work hours with limited leisure time can inhibit employees from having an active social life, denying them of activities proven to result in lasting happiness.

Experiential rewards empower organizations to recognize employees in a fun, memorable and personal way by giving them something to do, rather than offering company swag or cash rewards.

By leveraging human behavior and psychology, experiential rewards leave a lasting impact. A CEB/Gartner study found that for a reward to impact an employee’s behavior and engagement, they must perceive those rewards as relevant and important. Bonuses, gift cards, and other traditional incentives must be of significant value for a recipient to see them as meaningful. Experiences capture the value of anticipation, social connectivity, and memories that cash incentives do not.

Experiential rewards also influence the work environment – boosting office social interactions and bringing employees closer.

They’re memorable
Outdoor trips, events, classes or getaways offer a chance to create lasting memories that reaffirm the feelings of happiness.  

They’re aligned with personal interests
Being able to tailor the reward to their current situation or experience, makes it more relevant, and what goes with it, important. Not to mention that being able to choose the preferred experience makes the reward fit their lifestyle.  

They’re social
Experiential rewards enhance relationships with friends and family. As our data confirms, 67% of experiential rewards recipients select an experience they could share with others.

A quote from the same Cornell study illustrates the inherently social nature of experiences:

“Turns out people don’t like hearing about other people’s possessions very much, but they do like hearing about that time you saw Vampire Weekend.”

At Wishlist Rewards, we see this propensity for sharing and storytelling on a daily basis. From marriage proposals to family carriage rides, our customer stories highlight this crucial element of offering experiential rewards.


Launching an Experiential Rewards Program

We’ve talked about the value of employee engagement and the role recognition plays in enriching the emotional commitment of an employee to an organization. You’ve also learned how experiential rewards help foster that commitment.

However, experiential rewards programs are still a novelty for many organizations. The report by WorldatWork reveals:

“The most common types of 
recognition awards remain the same 
from 2011.” (source)

These include certificates, plaques, cash, gift certificates or branded merchandise. Implementing a rewards program can be challenging, especially when the program type is unfamiliar or novel. The following section empowers you to challenge the status quo by highlighting the traits of successful rewards programs and giving you a guide to launching one of your own

Recipient Choice
With Wishlist Rewards, you give employees something to do. Instead of receiving cash, they get an option to choose from a digital catalog of experiences within a specified budget. The ability to choose maximizes total utility within the program and ensures that rewards fulfill the needs and interests of a diverse workforce.

Example activities include:

  • an outdoor adventure
  • an event
  • a family getaway
  • resort vacations
  • wine tasting and tour
  • massage, art classes, and more


Well Defined Objectives
Launching a program starts with identifying objectives. Different organizations have different goals. Through flexibility and recipient choice, an effective rewards program fits the needs of a business, rather than the other way around.

The first step is to assess your pain points, objectives, and areas of uncertainty.

What is the most painful part of running our current program?
Where are currently underutilizing time or resources?
What would success look like in a new program?

Organizations looking to scale and improve efficiency might incorporate an automated anniversary program to reduce administrative costs. Companies looking to develop a decentralized reward system might opt for a program with 10-15 active reward accounts.

The act of assessing objectives and asking internal questions can bring clarity and set the foundation for a strong program.

Timely Appreciation:
Companies commonly hold regular events to recognize achievements of employees each year.

In practice, this means that smaller, albeit significant contributions get forgotten, overshadowed by larger achievements typically rewarded during such ceremonies.

Recognition is most effective when it closely follows the positive behavior. Habits are created in a time-sensitive loop. An action followed by a reward strengthens a positive feedback cycle which in turn form habits. This theory has been studied and illustrated in various models, from Charles Duhigs habit loop to Nir Eyal’s hook model.

A properly structured recognition program empowers managers to reward employees without having to jump through an arduous approval process.

A Rewarding Experience for the Rewarder

Traditionally, rewards and recognition work one-way, praising an employee for good performance or behavior. The desired outcome is typical to create a culture of productivity, good habits, and high-achievement amongst lower-level employees.

This view neglects the opportunity to shape the behavior of people issuing the reward who make up 1/2 of the experience. An effective rewards program should also acknowledge the people issuing the rewards. Connecting the gift giver and recipient through thank you notes and pass along comments, helps create a sense of connection and value for both sides. Rewarding the rewarder helps develop a culture where appreciation and gratitude are revered.


Calculating the ROI of Your Recognition Program

Finally, let’s assess a potential value of your recognition program. Now that you know why you need to launch a recognition program and what to do to get started, it’s time to look at the numbers and help you build the case for it in your organization.

To calculate the ROI of a recognition program, we’ll use this simple formula:

ROI = Retention + Administration + Motivation (RAM)


Retention Administration Motivation
Effect: Estimates suggest that it costs anything from 20% to 150% of an employee’s salary to replace them. Creating, managing, and tracking a milestone rewards program requires hundreds of hours of labor. Companies that engage in recognition programs typically enjoy an 18% lift in productivity.  

Similarly, companies with engaged staff see 37% lower absenteeism.

Potential ROI: At a $70000 a year salary, retaining just one employee would save company anything from $14000 to $105000, depending on the estimate you use. At a $70,000 salary and 100 annual labor hours of management, a fully-automated anniversary and birthday program saves companies $3,500 annually in labor costs alone. Productivity:

At a $2000 labor productivity per employee per week, the revenue from increased productivity would be $2360 per employee per week.


At $3000 average cost of absenteeism per employee, with engagement, the cost would drop to $1890 per employee.


Closing Thoughts

Every day, countless employees across the United States decide to leave their jobs, feeling unappreciated and their input unrecognized.

Of those who stay, many come to work uninspired to go beyond of the minimum an organization expects from them.

Launching an employee rewards program helps build a strong emotional connection with the organization. A connection that, in turn, inspires initiative, responsibility and a personal involvement in the business.

Employee Engagement and Experiential Rewards

Launch a program today!

Schedule a time to talk with our team about implementing an experiential rewards program at your organization.