The Advent of Customer-driven Employee Rewards System

The benefits of having an effective employee reward and recognition system are well known to most organizations today.  However, there is a new debate has already begun, if and how customers can play any role in rewarding employees or even the process of rewarding within an organization. Creating a customer-driven employee rewards system could be an innovative way to incorporate customer feedback into the whole process, thereby increasing its credibility and transparency.

How to design a customer-driven employee recognition system?

Even though the idea of providing the customers with a greater say in rewarding and recognition of employees might seem quite appealing, implementing it may not be as easy.
In fact, organizations may have to face considerable challenges getting buy-in for setting up up such a system and implementing the same. Organizations intending to set up such a program need to answer several questions  such as:

1. How much say would customers have in rewarding and recognizing the employees?

2. Can customers be granted the freedom to recommend employees for receiving rewards and recognition?

3. What system should organizations need to provide to their customers for providing their feedback and recommendations?

4. Who will fund the rewards programs if the customers are also involved in the process (especially in a B2B context)?

5. What will be the potential impact on productivity and employee motivation? Will it justify the investment?

Design Principles

Finding satisfactory answers to the above questions is the first step in the direction of establishing a truly effective and well-integrated reward system.

The points below can help organizations in this context and provide them with the appropriate guidelines to implement the most efficient reward programs:

1. Level of customer involvement

The first and the most important question that needs to be answered is the level to which the customers should be allowed to become involved in the recognition process.

This would generally depend on the type of products and services being offered by the organization as well as their level of customer engagement. Most organizations might feel that reward and recognition in an internal matter of the company and hence customer involvement should be kept to a minimum.

They would prefer the common methods of seeking feedback about individual customer interactions and rating of such interactions as the best way to involve them in the recognition process. This would be most relevant in businesses such as retail, hospitality, customer service operations, etc.

2. Customer recommendation

When it comes to answering the question of allowing the customers to recommend employees for rewards and recognition, organizations need to consider two main types of employees namely blue collared and white collared employees.

In most organizations, customer interaction with white collared employees is more direct, as compared to blue-collared one, especially for employees working in junior positions. So, allowing the customers to recommend white-collared employees (and those blue-collared employees offering direct customer service) for rewards and recognition may actually help in improving overall customer experience.

3. Infrastructure required

Most organizations feel concerned about the investment required for providing the right infrastructure to facilitate customer involvement in reward programs. However, they can utilize existing systems with minor changes and even various online and social media tools to achieve this objective in a cost-effective manner.

They can simply seek customer feedback or ask them about the employees they would like to recommend for rewards and recognition through e-mail, SMS, WhatsApp messages or even in-app features.

4. Funding the program

This is perhaps the biggest challenge that organizations face with respect to involving customers in the recognition process. Since most organizations have set budgets for recognition programs, such customer-driven programs need to be incorporated within those budgets.

However, in specific cases, the organizations might ask their customers to contribute in some manner towards the funding of rewards for exceptional employees. This might be especially through for higher-end processes such as IT, analytics, accounting, etc. including those who work in a virtual captive model.

5. Impact of the program

As far as the impact of customer involvement is concerned, organizations can rest assured that such initiatives that have been well thought-through will provide generally favorable results.

Such programs will help in enhancing customer satisfaction levels besides assuring the employees of a completely transparent reward system based on customer centricity and performance. This will, in turn, enhance the overall productivity and efficiency of the employees and the organization.


Keeping in mind the above points, organizations can come up with a customer-driven employee rewards system as an effective way to secure customer involvement in their employee reward and recognition programs and build greater customer-centricity, motivation, and productivity of their workforce.

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