Reward programs should be designed to build motivation and encourage growth, says Peninsula Canada’s Charlie Herrera Vacaflor
The labour market in Canada continues to be a competitive one and employers are actively looking for strategies to recruit and retain talent.
According to Peninsula’s Charlie Herrera Vacaflor, employee rewards programs have become a key differentiator for companies trying to hold on to their best people. But not all programs are created equal, particularly as too many organizations default to tenure-based rewards, like a gift card for five years of service or a plaque at ten.
"Employee rewards programs need to shift away from mere recognition of tenure," said Charlie Herrera Vacaflor, senior consultant at Peninsula Canada. "Mere recognition of tenure can just feel like a pat on the back, but it's not really addressing or speaking to what an employee is bringing to the table."
While length of service does reflect loyalty, Herrera Vacaflor argues that it does little on its own to show what a company actually values or to push employees to contribute more. That’s why he believes reward programs should be designed to build motivation and encourage growth, which is why skill-based incentives tend to have more lasting value than simple recognition for time served.
While consumer-style perks like streaming subscriptions or shopping memberships can land well with entry-level and younger workers, who appreciate rewards that offset everyday spending on entertainment and personal time, Herrera Vacaflor emphasized those same perks fall flat further up the ladder. He believes senior employees and specialists are driven by growth, not convenience, and a Netflix or Amazon Prime login simply won't signal what a company expects from them.
Similarly, loyalty-style rewards can be effective early on, especially in the first couple of years, but their impact tends to fade as employees grow in their roles because once workers start focusing on certification, skill development, or advancement, static rewards no longer reflect what matters to them or what the company wants to encourage.
Herrera Vacaflor argues that reward programs need to evolve alongside employees’ careers and signal how the business values their changing contribution. He also suggests that peer-recognition tools tend to hold up better over time because employees actually use them and they help build camaraderie, while discount-based perks and generic offers often lose relevance and go unused by longer-tenured staff.
The effectiveness of points and tier systems depends on the size of the business. For small companies, where a tight-knit workforce is stretched thin, accumulating points isn't going to cut it, he said, adding those employees are dealing with burnout and juggling multiple roles in a single shift. Instead, the focus should be more on communication and what the rewards programs entail.
"I would like to stress the idea, especially for small businesses, what are you trying to communicate with your rewards program?" Herrera Vacaflor said, suggesting that small employers get more traction from rewards tied to wellness and time investment rather than gamified systems. Additionally, larger companies have more room to run tiered programs, and a segment of their workforce will likely respond well to them.
"A rewards program is not necessarily about the reward itself, but what the company is actually communicating towards the employees with that," he added.
But even at scale, the challenge mounts when the workforce is spread across different age groups, skill levels, and rates of turnover, he noted.
According to Herrera Vacaflor, personalization starts with understanding the makeup of the workforce and being clear about the behaviours a company wants to encourage. Different roles are motivated by different pressures and priorities, so a single reward model is unlikely to work across the board.
"Companies should think about and feel challenged when their workforce is very dispersed in terms of age, in terms of skills, in terms of retention and workforce changing continually," said Herrera Vacaflor.
In a sales-driven business, for example, incentives may need to recognize time investment and the push to exceed targets, while customer service or client experience teams may respond better to rewards that support balance, recovery, and well-being. He underscored that employers need to match rewards to the actual demands of each role, rather than assuming the same benefit will motivate everyone equally.
He also acknowledged how reward programs can stay fixed even as business conditions change, emphasizing organizations need to adjust what they reward based on both the market and their own priorities. If the goal is expansion, entering new sectors, or building capability, the program should encourage upskilling and development.
Whereas, if the business is operating in a slower or more difficult period, it may make more sense to recognize time investment and the extra strain employees are carrying. His broader point is that reward programs need to stay relevant and clearly signal what the company wants from its workforce at a given moment.
To that end, he highlighted how reward programs are moving from what benefits the individual employee to ones that benefit others and the greater good of society. Notably, younger workers in particular are drawn to programs where their effort translates into something beyond personal gain like a charitable donation or a contribution to a social cause.
This ultimately creates a dual payoff for both employees and the organization. Employees feel their work carries meaning beyond the balance sheet, while the company strengthens its public image, he noted.
“It can be a huge motivator, and I think that's another way of aligning incentives,” he said. “It's not just about what a company is doing for society in the marketplace but also having a higher conscience that there are other social aspects that need to be addressed at the same time.”
