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game changer

LoyaltyOne chief Bryan Pearson says employers increasingly want to know that staff bonuses produce better performance and results. ‘More than ever, human resources is being held accountable for driving results.’Jennifer Roberts/The Globe and Mail

Despite running a company that's all about loyalty points, Bryan Pearson's employee rewards program is surprisingly traditional. The chief executive officer of LoyaltyOne, the company that runs the Air Miles customer loyalty program, gives staff annual bonuses, praises employees when they do something right and often gives other smaller prizes for a job well done.

While that's all well and good, after six years of running the company, he's found that simply telling an employee she's done great work or giving a group of people a pizza lunch for doing something successful doesn't motivate staff the way he'd like. It gives an individual a nice ego boost, he says, but that confidence doesn't filter its way to co-workers.

"These things would happen in an isolated part of the business," he says. "There wasn't a celebratory feel or sense of momentum cutting across all parts of the company."

Rather than simply brainstorm with human resources on how his current program can be adapted, he turned to technology to help him overcome this recognition challenge.

Two months ago, Mr. Pearson teamed with Achievers, a Toronto-based business that has developed a novel way to reward staff. The company, which started in 2002 and used to be called I Love Rewards, has developed a cloud-based, social media site that allows any employee to recognize any other employee. A news feed feature – similar to Facebook's – lets the entire company see who is being rewarded and for what. Other companies, such as Kudos Inc. in Calgary and Globoforce of Southborough, Mass., have similar offerings.

Most companies still reward staff the old-fashioned way – with a pat on the back or a Starbucks gift card – but technology is making it easier and less costly to recognize employees. It's also allowing executives to see whether rewarding workers actually helps to boost the bottom line.

Rewards, says Achievers founder Razor Suleman, aren't just telling staff they did a good job. A recognition program should increase employee engagement and performance, he says.

"More than ever, human resources is being held accountable for driving results," he says. "Reward programs can get expensive if you're not getting results and most of the time people aren't tracking the return on investment on their rewards."

Software allows executives to more easily tie recognition to returns. With Achievers' "employee success software," managers can view who was recognized for what and can then look at that person's performance numbers to see whether they've been enhanced. Managers can also see how recognition is motivating entire groups.

Allowing others to see who gets recognized is a big key to this type of technology's success. Usually, when someone is rewarded, only a handful of people – if anyone at all – knows. With social recognition software, everyone can tell who's stepped up.

"It's not one-to-one any more, it becomes one to many," says Mr. Suleman. "When other people see it, that behaviour is reinforced. What gets recognized gets repeated."

That's what Mr. Pearson is hoping will happen. He says that when employees are satisfied in jobs with measurable outputs, they produce better results. If everyone can see who gets rewarded, that will spark others to worker harder and get recognized as well.

However, there is more to this program than the satisfaction that comes with seeing your name and picture broadcast on a social media news feed to co-workers. Achievers lets employees collect points, which can later be redeemed for bags, iPads and other goodies. Do a good job and receive some financial reward in addition to recognition.

At Toronto-based LoyaltyOne, those points take the form of Air Miles rewards. Every employee receives a certain amount of Air Miles that they can give to fellow staff members. Those points can be redeemed for travel and the numerous other items the program offers.

Those tangible rewards are important, says Mr. Suleman, and they can also take the place of a year-end bonus. "Instead of giving everyone $500 every Christmas, you break that down into weeks and give employees the power to determine who gets it," he says. He's found that a "gift" isn't always given every week and that can actually save a company money over the year.

While Mr. Pearson has only implemented this recently, he's already seeing results. He's found that people are getting recognized who don't usually get noticed. "People are popping out of the woodwork," he says.

He's also confident that this software will help boost engagement and make it easier for managers to track the work employees are doing. He thinks it will make a good retention tool as well.

"This will get people excited about work and connect them better to our culture," he says. "A lot of business success comes down to communication and the ability for employees to get excited about what they do."