Beyond Paychecks- How Gen Z, Millennials are Redefining Workplace Rewards | Anilkumar Satyavarpu | CHRO | Magma HDI I General Insurance

At the heart of every workforce lies a universal human need: the desire for recognition. This fundamental drive, highlighted in Maslow’s Hierarchy of needs, transcends generations. Beyond basic survival, individuals seek esteem
and a sense of belonging. For the Millennials and Gen Z, these needs have evolved beyond traditional forms of acknowledgment.

Millennials, a significant part of the workforce, and Gen Z, projected to comprise 27% of India’s workforce by 2025, see work as central to their identity. A 2 023 Deloitte survey reveals that 65% of Indian Gen Z and 68% of Millennials view work as crucial to their self-being.

As a result, Rewards & Recognition (R&R) has transformed from a mere performance tool into a crucial engagement strategy for fostering employee loyalty. HR leaders today face the pivotal challenge of crafting R&R strategies that resonate with the purpose-driven aspirations of the Millennials and Gen Z. By cultivating a culture of recognition that is contemporary, powerful, and aligned with the values of our emerging young workforce, we can lay the foundation for effective R&R programs.

Purpose-Driven Recognition: Connecting to the Bigger Picture
Today’s employees crave recognition that ties back to something bigger than themselves. Recognition tied to an organization’s core values and vision creates a sense of purpose and ownership. By aligning rewards with company objectives and values, organizations not only celebrate individual contributions but also reinforce the greater impact employees are making. This approach strengthens a shared commitment to the company’s purpose utilizing R&R as an effective tool to drive performance and engagement.

R&R, A Strategic Business Tool: Making R&R Everybody’s Business
The days when R&R was just a checkbox item for HR are over. To stay competitive, recognition must be embedded in company strategy and driven by top leadership. When the C-suite champions R&R, it underscores the
importance of employee contributions to long-term success. HR should facilitate the framework, with business leaders leading initiatives. This strategic ownership ensures recognition efforts drive organizational growth and fosters a culture where recognition is everyone’s responsibility.

Beyond Paychecks: Recognizing Holistic Contributions
While compensation remains important, employees are looking for more than just financial rewards. They seek fulfillment in work-life balance, meaningful relationships, growth & career opportunities, and an engaged work environment. According to research, 97% of Indian Gen Z workers would trade a portion of their salary for better workplace relationships. Offering rewards that address these holistic needs—such as sabbaticals or opportunities to pursue personal development—can create deeper engagement and loyalty.

Real-Time Recognition: Meeting the Need for Immediacy
In an era of instant gratification, waiting for annual reviews or quarterly meetings is no longer sufficient. Recognizing Employee of the Month or daily achievements, like closing a deal, is crucial. Rewards are more impactful when given immediately. Surprises or unexpected recognition boost morale instantly. Real-time recognition, whether through digital platforms, personal shoutouts, spontaneous celebrations, or instant awards, must be incorporated by HR leaders into R&R programs for instantaneous acknowledgment.

Recognition Beyond Milestones: Building Flexibility into R&R Programs
R&R should not always be tied to work and target achievements. Today, employees value acknowledgment for everyday behaviors that contribute to a positive and collaborative work environment. Achievements can also include areas such as low attrition rates in a team, punctuality, quick turnaround times for tasks, meticulous planning, cross-functional achievements, or active participation in discussions. Incorporating unconventional recognition categories can be game changers. Flexibility in R&R programs to accommodate diverse forms of recognition is crucial for fostering a culture of appreciation.

Personalized Recognition: Making It Meaningful
Organizations need diverse recognition categories tailored to different departments, roles, and individual needs. Generic recognition doesn’t cut it—personalization is key. Go beyond trophies with vouchers, coffee with leaders, trips, time-off, club memberships, sponsored certifications, tailored learning opportunities, and personal notes. Rewards should reflect individual preferences, as a one-size-fits-all approach no longer resonates. Managers must understand what motivates each employee and offer rewards that align with their unique aspirations. And HR leaders should empower managers to deliver personalized recognition that truly makes employees feel valued.

Inclusive Recognition: Engaging Silent Contributors
R&R programs should recognize not just high performers but also those under the radar. Inclusivity in recognition fosters a sense of belonging. Leaders must identify and re-engage disengaged employees through support, mentorship, and development opportunities to reignite their motivation and reinforce their value.

Building a Culture of Recognition: A Path to Sustainable Success
Recognition creates a workplace where everyone feels seen, valued, and motivated. For Millennials and Gen Z, this means real-time, personalized acknowledgment that aligns with their values. HR leaders who adapt their R&R strategies to these needs will foster engagement, loyalty, and sustained success. Aligning R&R with the company’s Employee Value Proposition (EVP) strengthens the employer brand, making employees feel valued and motivated.

In today’s competitive talent market, an impactful R&R program is not just a perk, but a strategic differentiator!