Best 2025 Employee Rewards and Incentives — So What’s New?

Each year, HR departments brainstorm ideas about what benefits they can offer to lower the turnover rates of hourly employees. Increasing pay in a significant way isn’t always an option, so they have to be creative in coming up with alternatives that move the needle to increase employee engagement and retention.

Employees aren’t always incentivized by the same types of rewards, so a one-size-fits-all approach won’t often be enough. What works for salaried employees may not necessarily work for your hourly workforce. So, how do you tackle this challenge to make everyone happy?

How Employee Incentives Have Transformed Over Time

Throughout history, incentivizing employees has evolved based on the needs of employers and their workforce. Employee rewards have progressed from primarily focusing on tangible, monetary incentives like bonuses and pay raises to a more holistic approach. This approach favors recognition, professional development opportunities, work-life balance, and personalized rewards, emphasizing intangible forms of appreciation and aligning rewards with company culture and individual needs, particularly in recent years. 

What Types of Employee Incentives Are There?

Many companies struggle to implement rewards and incentive programs that give employees what they want. Gone are the days when a pat on the back and an “atta boy” were enough to keep an employee loyal to an organization. Now, more tailored and personalized rewards programs are necessary to meet the needs of today’s diverse workforce.

The current employment environment demands that employers pay close attention to what job seekers and current employees deem essential.

• Monetary incentives, such as salary increases, bonuses, profit-sharing plans, commissions and stock options, link job performance to compensation. Other popular financial incentives include referral bonuses and cash recognition rewards that encourage specific employee behaviors and performance.
  
  These incentives work exceptionally well for salaried employees; however, stock options, profit-sharing, commissions and bonuses are traditionally out of reach for frontline workers.

• Non-monetary incentives do not result in financial rewards, but they can be equally, if not more, effective monetary incentives in driving employee engagement and retention. These incentives include social recognition, additional time off, flexible work arrangements, wellness programs and professional development. 
  
  Again, many of these programs are geared toward salaried employees, not hourly workers, who, for example, cannot often take advantage of remote work arrangements or flexible hours.

• Points-based incentives, such as Starbucks Stars or airline miles, allow your employees to earn and save points, which they save and later redeem for rewards they actually want. These incentives give employees control and ownership over their rewards and don’t require management oversight. There are several ways to administer this type of program, but allowing your employees to bank points and choose their own reward from a carefully curated catalog of financial products or experiences will appeal to many of your employees.

Point-Based Rewards are Shaping 2025 Trends 

Say you’re an hourly employee, and you can choose between a gift card your manager hands you when she sees you’ve completed a project on time or a rewards system that allows you to redeem points for something you actually want. Which one would you choose? Hands down, you’d probably opt for an incentive and reward program that puts you in the driver’s seat. Seventy percent of employees feel recognition is most meaningful when it’s personalized. 

According to SHRM, employee recognition programs work best when they are customized, timely, and fun. What employee wouldn’t want a program that offers options for point redemption rather than a gift card you designate as a reward for everyone? 

Traditional employee recognition programs struggle with engagement, with only about 35-40% of employees actively participating. In contrast, Salt 2024 data shows that 63% of employees engage in point-based rewards, accumulating points and redeeming them for rewards they genuinely value. More importantly, 53% of Salt redemptions are tied to long-term goals, meaning employees are motivated to work toward something meaningful rather than receiving one-off, impersonal incentives.

Points-based rewards that are customized to give your employees what they want help them feel valued, supported, and respected. They provide the flexibility and autonomy employees are looking for, resulting in increased motivation and engagement, which is a win-win for employers and employees. They have also been shown to improve engagement and loyalty, leading to decreased turnover and increased productivity. In fact, Salt users have a 62% lower turnover rate than non-users, leading to stronger workforce stability and reduced hiring costs.

As technology continues to advance, point-based rewards and incentive programs will become the gold standard in 2025. They will empower employees with greater control over their recognition while making management more seamless and efficient for employers.

Want to learn more about the results that Salt’s employee loyalty and rewards platform is achieving for employers and employees? Download this white paper.