To address the ongoing challenges of employee engagement, many companies have begun to use gamification methods to ignite employees’ passions. This innovative strategy applies the elements of gaming—such as entertainment, excitement, clear rules, uncertainty, and challenge—to the work environment, thereby enhancing employees’ sense of autonomy, capability, and team cohesion, and effectively responding to the urgent need in modern management to improve engagement. Effective management involves not only increasing employee enthusiasm for work but also deeply engaging them and enhancing their commitment, as disengaged employees often lead to reduced productivity and high absenteeism rates.
Traditionally, methods to increase employee engagement have included giving employees greater autonomy, a stronger sense of belonging and involvement, and more opportunities for growth. However, despite these measures, recent surveys show that the level of burnout among American workers in 2022 has reached the highest point in nearly nine years, with about three-quarters of employees feeling disengaged at work.
Some companies have abandoned traditional methods, trying different approaches to boost employee morale. For example, one company abandoned the practice of giving employees regular small bonuses and instead implemented a lottery reward program, allowing employees with high attendance rates to win large prizes. However, this policy was quickly met with widespread dissatisfaction among employees and had to be canceled.
In this article, we will focus on introducing the latest research in behavioral science to help managers better integrate gamification into the workplace. The focus on reward systems is because salary and benefits have always been a focus for job seekers, but also because it is an area that can greatly improve employee engagement and has not been deeply explored.
Gamification can increase employee engagement and motivation because it touches on the three core elements of our motivational system. First, to enhance autonomy, games allow us to choose our paths in life’s journey. Second, to strengthen a sense of capability, games enable us to experience the process of mastering something. Lastly, to meet the need for relatedness, games allow us to collaborate or compete with others and build communities on the basis of common interests.
Gamification has already begun to be applied to workplaces and has shown great motivational potential in areas such as employee training.
From 2020 to 2025, the gamification market is expected to expand rapidly at an annual growth rate of 27.4%. While the application of gamified compensation plans is still in the minority, there have been some successful case studies. For example, at insurance company Ansay & Associates, outstanding employees have the chance to spin the “Wow Wheel” to win special prizes. Uber launched a policy in 2019, allowing platinum or higher-level drivers to draw bonuses of up to $5000 after completing orders.
Performance-based pay is one way to promote gamification. Innovative incentive systems can reduce employee turnover and motivate them to work for better results. Appropriate gamification strategies can complement the deficiencies of traditional incentive plans, which often lack fun elements, are predictable, and have limited effect on improving the performance of underperforming employees. According to a 2019 survey, 89% of employees believe that if their work was more gamified, they would be more efficient.
In a recent study, we introduced two gamified elements, goal orientation and solving uncertainty issues, by setting up a “single-ticket” lottery reward program. This program links employees’ performance with the chance of winning a lottery drawing, thus generating a certain amount of jackpot. For example, an incentive system that offers lottery chances by accumulating completed sub-goals might give staff an extra opportunity to win $100.
We compared this single-ticket lottery method with one-time payments, piece-rate rewards, and multiple-draw plans. The results showed that the single-ticket lottery outperformed other schemes in enhancing employee enthusiasm and performance, especially among those who usually perform poorly.
To harness the full potential of probability rewards, managers must carefully consider the design when planning performance-related pay incentives, ensuring they manage employee expectations and maintain their trust. The key to success when implementing gamified strategies is to ensure accurate measurement of employee performance.
In the workplace, when employees’ output can be independently completed, divided into achievable sub-goals, and the quality and quantity of output can be objectively assessed at a low cost, implementing probability reward programs is particularly appropriate. These programs gameify work progress, not only enhancing employees’ engagement and commitment but also strengthening their autonomy and capabilities, and thereby improving coworker collaboration.
However, the success of a probability reward program also depends on staff acceptance. If employees perceive such rewards as a threat to their current pay structure, especially when they have expectations of an existing bonus system, they are likely to oppose the new incentive. As such, these plans should be a new reward system or an extension and supplement to the existing reward scheme.
Moreover, fairness and transparency are two other key factors for a successful probability reward program. If staff feel that the reward program is unfair or lacks transparency, it will backfire. To ensure the effectiveness of probability reward programs, management needs to maintain a high level of transparency and provide regular, moderate individual rewards. Simultaneously, they should clearly demonstrate the direct link between outstanding performance and long-term benefits.
Overall, a well-designed probability reward program can meet the urgent need of modern management for a more dynamic, inclusive employee engagement strategy. This approach not only increases employee dedication but also fosters a work environment characterized by teamwork and harmonious coexistence.