The concept is to create a system where colleagues can openly reward each other with virtual points, hearts and coins. Recognition is mostly done through an app for transparency and traceability, and can eventually be converted into real money, gifts or vouchers.
Typeform is a fast-growing startup developing a questionnaire platform. Despite being a company with a 'tech' profile, they are actively working on making room for human interaction in their business operations. As part of Management 3.0, they have introduced the Merit Money bonus scheme to express peer recognition among colleagues using the Bonusly app. How has Merit Money increased employee motivation? Let's see!
The company uses its own "currency", typecoin, to recognize individuals for their help, effort and valuable contributions to the community through the Bonusly app. It's important that this recognition comes from colleagues, not managers, and is value-centric, not results-oriented.
In Bonusly, each recognition is linked to one of the (up to 12) values defined by the company, which can be redefined at any time if needs change.
Typeform started with a small set of values, then refined and expanded them based on experience to align with their intended company values. These are now: teamwork, leadership, problem solving, innovation, customer service, foresight, helping others, results orientation and creativity.
It is a valuable experience that the job is closely linked to the amount of typecoin available. For example, there is a big difference between the number of coins available to a receptionist and a development engineer because of the number of social interactions. Therefore, it is not taken into account in performance appraisals, for example.
The "earned" typecoin can be redeemed for cash, Amazon and other online gift cards, or can be donated to a charity of your choice. Employees can keep it and use it to evaluate their colleagues.
In the course of daily work, it is difficult to take the time to properly appreciate colleagues' help, ideas and outstanding performance. A solution to this could be to use a platform to quickly and playfully thank people for their help, or to easily provide positive feedback linked to a value. In fact, it is not the virtual coin that is motivating, but the feedback and the recognition of the community, i.e. that the work done, the extra effort, is also valuable for others.
It not only motivates the person receiving the encouragement, but also increases satisfaction in the whole work environment by helping to focus on positive interactions and gratitude.
It's most rewarding when employees receive a livable wage for the work they do regardless of performance, and the bonus is truly a bonus, not a precarious part of the salary.
The year-end bonus is not working very effectively, according to research. It spans too long a time period, so the recognition is too far removed from the work that is valued. And if it is lower than expected (and it is almost always lower), it triggers disappointment rather than a sense of appreciation.
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Merit Money-type practices allow for real-time, small-scale rewards, neglecting the typical top-down (waterfall-like) corporate perception and following Jurgen Appelo's Six Rules for Rewards, based on scientific evidence.