Discovery: Top 5 Reward Management Trends In 2024

Throughout history, reward and incentive programs have been used extensively. However, in the dynamic landscape of the 2020s, they are experiencing a remarkable transformation. 

These modern evolutions are reshaping the way companies design and implement reward strategies, aligning them with the changing trends and preferences of individuals. As organizations strive to stay ahead in this competitive era, understanding and adapting to these transformative shifts in reward programs become crucial for sustainable success. 

In this article, we will take a look at the emerging trends in reward management that are likely to dominate the industry in 2024.

What is reward management?

Reward management is the process of creating, tailoring, and overseeing rewards programs to achieve the organization’s goals. If you’re in charge of reward management for your organization, you are responsible for adapting to trends and making changes based on what your employees or target audience want and need. 

By staying up-to-date with emerging strategies and innovative approaches, you can ensure that your reward system aligns with the evolving needs and expectations of employees, ultimately driving engagement and boosting performance.

How did reward management change in 2023? 

The introduction of AI chatbots like ChatGPT and Jasper AI in late 2022 significantly impacted numerous industries in 2023, including reward management. Companies now use AI to automate and enhance their compensation strategies and employee recognition programs, asking chatbots for reward inspiration and help with organizing employee data into manageable lists. 

But even the organizations that didn’t use chatbots in their reward management strategies increased their technology usage. Many organizations are straying away from manual rewards, where they track employee or consumer data by hand, reach out to reward recipients, and give them generic rewards.

Instead, they’re using technology to:

• Automatically track employee performance data and reward them accordingly
• Create custom rewards tailored to each recipient’s preferences
• Automate the process of rewarding employees without manual effort.

This shift towards technology-based rewards has created huge opportunities for companies in the reward management industry. For example, software companies are creating programs that allow organizations to track employee data, customize rewards, and automate the process of sending out awards. Additionally, companies are offering innovative reward solutions such as virtual gift cards that can be sent directly to a recipient’s phone or social media accounts.

What’s the shift to watch for? 

In 2023, practically every industry experienced labor shortages. Industries like hospitality, retail, manufacturing, and finance experienced high quit rates, further depleting company workforces. 

With the stress of understaffing, some companies neglected their employee recognition programs altogether. However, others turned to technology and automation to keep their reward programs afloat during busy periods. 

Companies have also taken measures to prevent employees from quitting and show appreciation to the staff they do have in the form of retention rewards and bonuses. 

Remote work is still booming in 2023, even as many companies call for workers to return to the office at least part-time. As many as 28.2% of employees worked hybrid or fully remote in 2023.

Companies have had to adapt their reward management strategies to account for remote workers, whose performance may not be as visible as in-person employees. They have altered performance-based rewards to account for more concrete performance data like the number of sales landed rather than employee attitudes. 

The influence of 2023 on 2024 and the emerging trends

In 2023, a noticeable shift occurred in the workforce, characterized by challenges such as understaffing, remote work adoption, and increased reliance on technology. This transformative year witnessed the emergence of several reward management trends, which are projected to extend their influence throughout 2024 and beyond. 

Employers and organizations are swiftly recognizing the unparalleled convenience, operational efficiency, and remarkable effectiveness of modern reward program structures, driving the continued evolution of this domain. With that, we uncovered the emerging trends in reward management organizations that you can expect to see in 2024.

For all the details keep reading, and then download the Infographic: The Top 5 Emerging Trends in Rewards Management for 2024 for a quick takeaway!

1. Integration of reward management and AI

By 2024, ChatGPT and other chatbots will have been around for over a year, but many people are still discovering their benefits. 

Employers and organizations will continue exploring how chatbots can benefit time-consuming processes like reward management in 2024, using ChatGPT and Jasper AI for tasks like:

• Employee recognition is a powerful practice that boosts employee morale and engagement. By going beyond the simple act of giving employee rewards, companies can take it a step further by generating personalized messages to accompany those rewards. 
• Customer loyalty is a crucial aspect of any business. One effective way to foster and maintain this loyalty is through the creation of personalized welcome messages and showing gratitude to customers for their unwavering support. By taking the time to craft thoughtful and appreciative messages, businesses can make customers feel valued and enhance their overall experience, leading to long-term loyalty and positive business outcomes.
• Reward management involves asking ChatGPT to generate detailed step-by-step instructions on how to create an effective rewards program within an organization. These instructions aim to provide comprehensive guidance and insights into designing a program that incentivizes and motivates employees, fostering a positive work environment and driving optimal performance. 

Organizations can also use AI to integrate rewards into the systems they use every day, effectively automating the process of rewarding employees and consumers. For example, organizations can use API integration to incorporate programs like Giftbit into their CRM systems. 

By leveraging AI capabilities, organizations can benefit from a well-structured rewards program that recognizes and appreciates employee contributions, ultimately leading to increased engagement, satisfaction, and overall success. 

2. Attention to environmental impact  

In today's world, there is a growing awareness of the importance of environmental sustainability, prompting many companies to actively make changes to their systems and processes to minimize their ecological footprint. Surprisingly, recent statistics indicate that as many as 66% of companies are actively working towards increasing their energy efficiency, demonstrating a significant shift towards greener practices.

In the quest to reduce resource usage, one effective strategy that companies are adopting is the transition from physical rewards to digital rewards. By opting for digital gift cards instead of traditional physical rewards, companies can not only save valuable physical space but also cater to the individual preferences of employees and consumers, thereby preventing unnecessary waste. Digital gift cards offer a flexible and eco-friendly alternative that aligns with the modern principles of sustainability and adaptability.

Taking a holistic approach to environmental impact, these companies recognize that even small changes in daily practices can make a substantial impact in the long run. By embracing virtual rewards and eco-conscious practices, they contribute towards a greener future and set an inspiring example for others to follow.

3. Virtual reward programs for remote workers 

Organizations are continuing to adapt their processes for employees who work partially or fully remotely. In terms of employee recognition, many companies are changing their programs to be fully virtual.

Gone are the days of tacking up a progress chart in the break room; instead, companies are sending all reward communications over email and tracking employee performance digitally. They’re also sending virtual rewards to employees, such as e-gift cards. 

4. Gamification of rewards 

Gamification is the process of including game elements in something that isn’t a game — like an employee rewards program. Many companies have already begun incorporating game elements into processes like onboarding and team building, and 2024 will almost certainly see a rise in gamification in the reward management space as well. 

Companies can add game elements like progress bars, spin-to-wins, scratch-off bonuses, and badges to their rewards programs to boost engagement.

5. Emphasis on employee wellness in rewards 

The past four years have brought numerous stressors to the workforce, ranging from COVID-19 lockdowns to understaffing issues. In turn, many organizations have begun promoting employee wellness through increased PTO days, discounts on healthcare and spa services, and presentations on mental health. 

In the year 2024, organizations will not only prioritize employee wellness but will also allocate a greater focus on it within their comprehensive rewards programs. This signifies a shift towards promoting wellness rewards, such as travel vouchers or rejuvenating spa gift cards, as preferable alternatives to less healthy options like fast-food vouchers or more general offerings such as Visa gift cards. This strategic approach aims to foster a culture of well-being while encouraging healthier lifestyle choices among employees.