All organizations are tasked with keeping employees motivated by acknowledging their contributions and hard work. While most companies implement reward and recognition systems to accomplish this, many struggle to implement these systems successfully because of high administrative costs and the lack of real world value to employees.
Blockchain technology can be employed to make rewards and recognition more meaningful to the individual while significantly reducing the overall administrative labor required through the use of smart contracts.
There is no shortage of third party solutions available today for organizations to manage their rewards programs. Most involve some type of points system where employees are awarded points for certain achievements and milestones. The points can then be used to redeem gifts or perks from a corporate affiliate.
These programs are often ineffective because the value of these points and the record of the achievements are trapped in a central location and are useless in the outside world. With blockchain technology reward points and achievements will have real world utility and thus, will be a more effective means of employee motivation.
In a decentralized blockchain world, reward points won’t be confined to a central location and employees will be able to spend them freely. Instead of issuing their own corporate reward points, organizations will issue decentralized crypto-tokens.
Employees will be able to exchange the tokens they earn for anything from airline miles to loyalty points from their favorite stores. When employees can freely spend their reward tokens on things they actually need or want, they will be more motivated to earn them.
Organizations will be able to utilize smart contracts to remove much of the administrative labor associated with current reward programs. Smart contracts are programs written on a blockchain that can directly control the transfer of digital currencies or assets between parties under certain conditions.
Within the context of a reward program, they can be used to seamlessly and automatically reward achievements and milestones. For example, employees will be issued a certain amount of tokens automatically on anniversary dates or when they complete training courses.
Once blockchain-based programs are implemented, they will be used to reward a wide range of behaviors with little administrative overhead. Attendance of corporate functions, participation in charitable organizations aligned with the company’s values, or even the promotion of the company’s mission on social media – smart contracts can be used to reward employees automatically when tasks any manner of tasks are completed.
Employees will also be able to transfer tokens to their colleagues to show personal appreciation. Like traditional benefits, these reward tokens can be programmed to have vesting periods.
Blockchain creates an immutable and time-stamped database entry of every single transaction ever made, so all the accounting of loyalty token payments will take place automatically. Companies will have a transparent and tamperproof record off employee rewards without having to spend time and money maintaining accounting records.
This will free up resources that can be applied more to important areas of a company’s operations.
With blockchain-based systems, not only will the rewards be more valuable to employees; the recognition will be as well.
Currently, when a company gives employee recognition for an achievement, they issue a certificate or plaque with the employee’s name on it. Short of hanging it up on their wall or bringing the physical certificate to a future job interview, there is little the employee can actually do with it.
With blockchain platforms, the employee will use the recognition to bolster their own professional reputation.
Blockchain technology is effective at establishing accurate records stored within distributed systems.
Employees will be able to build professional profiles that consist of cryptographically validated information: diplomas verified by the institution and employment history verified by the employer.
In the near future, hiring managers will require resumes and cover letters full of information validated on the blockchain so they don’t have to waste time verifying credentials. The more robust an employees’ profile, the more opportunities will be available to that individual. Just like an employer can validate that a person worked there, they can validate individual achievements that can be added to the employee’s professional profile.
When an individual is given recognition, instead of receiving a certificate which has limited use they will be given a permanent and unalterable attestation of the achievement etched into the blockchain. They will be able to add this to their professional profile, which can in turn be used to advance their career.
Once again, the recognition has actual real world use for the employee and will serve as a much greater source of motivation.
When hiring firms start looking for validated achievements instead of a list of unsubstantiated claims on a resume, employees will have a much greater incentive to make a real impact for their organizations.
Employees will benefit greatly from being able to build up their professional profiles as well.
When they complete training programs, attain certifications, or engage in charitable activities, they can be validated on the blockchain by their employer and use that validation to create a stronger professional profile. Past accomplishments will not be forgotten and will have actual long lasting value.
Instead of having to maintain their own personal list of past achievements, the blockchain will do it for them.
Blockchain technology will be used to create more effective reward and recognition programs beneficial to both employer and employee. Since the rewards that these new programs offer will have greater real world value, they will play a bigger role in attracting top talent.
Companies that do not effectively reward their employees will lose talent to those that do.
Organizations that implement effective blockchain based programs will gain an edge over firms that stick with legacy systems.