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Advent of Customer-driven Employee Rewards Systems

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Advent of Customer-driven Employee Rewards System

Employee recognition is usually based on the performance and behaviors of employees within the workplace. However, organizations have started to explore customer-driven employee rewards systems to drive the performance of customer-facing employees.

Driving great customer experience through enhanced employee experience

Usually, customers are considered to be external to the organization and have no say in the employee recognition process, which is considered to be internal to the organization.

However, customers are one of the key stakeholders for the organization and should be part of the reward and recognition process as well.

Over the years, organizations have come to acknowledge that the feedback and opinions of customers are critical for rewarding employees.

Moreover, since all organizations focus on providing great customer experience, seeking their involvement in the rewarding process seems obvious.

How To Design A Customer-driven Employee Recognition System?

Even though the idea of providing the customers with a greater say in rewarding and recognizing employees might seem quite appealing, implementing it may not be as easy.

Organizations may have to face considerable challenges in getting internal buy-in for setting up such a system and implementing the same.

Design Questions

How to Build an Effective Business Case for Employee Recognition

For setting up an effective customer-driven employee rewards system organizations need to answer the following questions:

1. Which segment of employees should the organization cover through such customer-driven rewards programs?

2. How much say would customers have in rewarding and recognizing the employees? Can customers directly recommend employees for recognition or simply offer their feedback and leave the decision to the management?

3. How to educate their customers about the new rewards policy to ensure maximum participation?

4. What systems and processes does the organization need to implement the customer-driven rewards program effectively?

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

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

Target Segments

To start with, organizations need to understand that only specific employees should be targeted for customer-driven rewards.

Hence it is important to identify the target employees to ensure that these rewards can make the desired impact on the right people.

Also, such customer-driven rewards and recognition programs might be suited for industries and roles that require direct interaction with customers for day-to-day operations, problem-solving, and troubleshooting.

The following industries and roles are best suited for having such programs:

B2C Scenarios

1. Retail: Store employees

2. Hospitality: Front Desk, Housekeeping, Service Staff

3. Healthcare: Front Desk, Medical Staff

4. Logistics/ E-commerce: Delivery Staff, Customer Service

5. Consumer Products: Customer Service

B2B Scenarios

1. IT Services/ BPO: Outsourced Staff

2. IT Hardware/ Software: Tech Support

3. Professional Services: Client Services, Account Management

Program Design

HiFives Employee Rewards Platform

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 with the appropriate guidelines to implement the most efficient reward programs:

How To Design A Customer-driven Employee Recognition System?

1. Decide On The Extent Of Customer Involvement

Decide On The Extent Of Customer Involvement

The first and most important question that needs to be answered is the extent 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 is their internal matter and hence customer involvement should be kept to a minimum.

They should consider the popular methods of seeking feedback about individual customer interactions and rating such interactions to involve them in the recognition process.

This would be most relevant in businesses such as retail, hospitality, customer service operations, etc.

2. Understand The Relevance Of Customer Recommendation

Understand The Relevance Of Customer Recommendation

The next question is whether to allow the customers to recommend employees for rewards and recognition.

Hence, for this, organizations need to consider how it would work for blue-collared and white-collared employees.

Customer interaction with white-collared employees is generally more direct, as compared to blue-collared ones, especially for junior roles.

So, allowing customers to recommend those employees, who interact directly may help in improving overall customer experience.

3. Determine What Systems Are Required

Determine What Systems Are Required

Importantly, most organizations feel concerned about the investment required to provide the right systems 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 cost-effectively.

Hence, 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.

They could also integrate their customer feedback system or CRM with the employee rewards and recognition platform. 

Hence, through the integration, good customer ratings could flow into the recognition platform and trigger a reward or recognition for the employee,

The platform should allow the management to access and analyze the customer experience data easily.

This would enable them to choose the most deserving employees for rewards and recognition.

4. Seek Funding For The Program

Seek Funding For The Program

This is perhaps the biggest challenge that organizations would face in involving customers in the recognition process.

Since most organizations have well-defined budgets for recognition programs, they need to incorporate such customer-driven programs within those budgets.

However, the organizations might also consider asking their customers to contribute to the funding of rewards for exceptional employees.

This might work very well for higher-end service businesses such as IT, analytics, accounting, etc. including those who work in a virtual captive model.

5. Promote The Program

Promote The Program

Importantly, organizations should also promote such customer-centric employee rewards programs, both internally and externally. 

The promotion could be done through various customer-facing and employee-facing digital platforms, signages, and LED displays.

Celebrating important milestones such as acquiring or servicing the 100th customer or other such success stories is equally important.

Hence, involving the customers directly in the reward process is a great idea to boost the sense of achievement among the employees.

6. Measure The Impact Of The Program

Measure The Impact Of The Program

A customer-driven rewards program is likely to create a quick and positive business impact, especially in terms of enhanced customer experience and satisfaction.

Such programs can also help in assuring the employees of a completely transparent reward system based on customer centricity and performance. 

Therefore, this can enhance the overall productivity and efficiency of the employees and the organization.


Great customer experience is critical to the success of any organization. Hence, it is important to reward and recognize employees who interact with customers directly on a regular basis. The performance and behavior of these employees have a strong linkage with the level of customer experience of the organization.

Therefore, getting customers involved in employee rewards and recognition by seeking their feedback and input is a great way to drive the effectiveness of such programs, targeted at customer-facing employees.

Sagar Chaudhuri

Lead author: Sagar Chaudhuri, the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of experience in the corporate world and entrepreneurship. In the past, Sagar has worked with companies such as Genpact, Infosys, and ICICI Bank, in leadership roles. He has an engineering degree from IIT Kharagpur and an MBA from IIM Lucknow. Connect on LinkedIn

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HiFives is a global employee rewards, recognition and engagement SaaS platform that enables organizations to digitize, automate and transform their employee experience. It is used by 100+ large enterprises, small businesses and startups in manufacturing, retail, technology, financial services and media, across 25+ countries.