The bonus is a central component of the employee referral program. It comes in different variations – cash and prizes/non-cash awards. In the grand scheme of planning the technical details of the actual program, the deliberations over this aspect could fall by the wayside, with companies opting for cash as the easier, no-fuss alternative. However, while a cash bonus may require less time to organize, prizes are ultimately the better motivator. Here’s why:

1. For one thing, they make a more substantial impression. Employees are more likely to talk about their new iPads than the extra $400 that was added onto their paychecks. And when they use their prizes, they are reminded of what they did to receive it. Prizes spur enthusiasm and significantly increase workplace buzz about the program.

2. Furthermore, prizes can’t be used to pay bills – i.e. they are real rewards that can be enjoyed, and are not simply an extension of the salary. Instead of divvying up monetary bonuses that employees may use on necessities, institute a more constructive use of your budget with a more material memento of their efforts.

3. Prizes are easier on corporate wallets than cash because they can include certain free or low-cost internal work perks.

Prizes Ideas

Now that we’ve established why prizes are a more desirable alternative to cash, it’s up to you to prepare a winning catalog. As stated above, prizes can be free (or close to it) – offering the CEO’s parking space for a week or a few extra vacation days won’t break the bank. Vouchers to restaurants or the movies are welcome in an economy in which people may not go out as frequently. And gadgets – from the latest tablet to sleek kitchen appliances – are rewards that can be enjoyed for years to come.

Many companies reward better prizes for critical positions, which serves to both motivate employees to invest more in their referrals and recognize the important role they played in sourcing candidates for this key position. And whatever prizes you decide upon, give employees a few options each time so that they can get what they really want. A Sephora gift card will probably resonate a lot less with a single male employee who would rather receive a gaming console (just a guess  ).

Conclusion

Always present employees with their prizes in front of their teams. This draws the team’s attention to the event, and serves as an example of what they could win by participating in the referral program. In addition, implement a public leader board of that month’s top referrers in the front entrance office, as well as on any internal websites/social media groups.

For most employees, knowing that they have the power to directly improve the quality of their workforce – and be rewarded for it – is in itself a huge incentive. Train them how to make the very best referrals by explaining what sort of candidates you are looking for and specific details of the jobs. It should be clear that their participation in the referral program will enable them to reap major benefits – both short-term, because they will be rewarded, and long-term, because they will be setting themselves up to work with great people.

Source: http://blog.gooodjob.com/2013/03/why-prizes-are-the-most-rewarding-...