By Rachel Prine
Phygital Rewards: The New Way to Keep Your Team Feeling Seen, Valued, and Motivated
The way we work has changed—and so has the way we express gratitude.
Financial institutions worldwide are reevaluating how they reward and recognize their employees. Sure, salaries, bonuses, and benefits still matter (they always will), but today’s workforce wants something more—something personal, flexible, and fun.
Enter phygital rewards, a fresh approach that’s shaking up the traditional compensation model by blending the physical and digital worlds.
What Exactly Are “Phygital” Rewards?
Think of phygital rewards as the perfect mix of real-life perks and digital experiences. The word itself is a combo of “physical” and “digital”, and it’s all about creating experiences that connect employees to both worlds.
For example:
- A team member may receive a digital badge for achieving a goal, along with a physical gift card for use.
- An employee could join an online cooking class and receive a chef’s apron at home.
- Or, someone completing an e-learning program could earn a ticket to an in-person industry conference.
It’s a more thoughtful, engaging way to recognize people that fits the way we work today.
Why Phygital Rewards Are Catching On
- They fit the hybrid world we live in.
Remote and hybrid work changed everything. Rewards that only benefit office workers no longer suffice. Phygital rewards give everyone — regardless of their location — the opportunity to feel appreciated and seen.
- They’re personal.
One-size-fits-all rewards are out. Employees want to choose rewards that actually matter to them, whether that’s a wellness app, concert tickets, or a coffee subscription.
- Recognition can happen instantly.
With digital tools, managers can send quick shout-outs, badges, or even small rewards in real time. Recognition doesn’t have to wait for a quarterly review.
- They make work more engaging.
Gamified systems enable employees to “earn” rewards by hitting milestones or completing challenges. It turns recognition into an experience, not an afterthought.
Real Examples That Work
- Visions Federal Credit Union uses a digital recognition platform where employees earn badges and redeem them for gift cards or branded swag. It’s so popular that 88% of employees get recognized every month.
- Affinity Federal Credit Union has built its own branded rewards program, Affinity Spotlight Rewards, which allows employees to participate in photo contests, volunteer challenges, and wellness games. The result? High participation, high energy, and a culture that truly reflects its values.
Why Employees Love It
- Flexibility & Choice: They get to pick what fits their lifestyle.
- Instant Gratification: Recognition happens right when it matters most.
- Personal Connection: The rewards feel genuine and unique.
- Increased Engagement: A mix of digital fun and real-world perks keeps motivation high.
A Few Things to Watch Out For
Of course, implementing a phygital program comes with a few challenges:
- Ensure that digital tools are easy to use and accessible to all.
- Balance costs and find the right reward mix for your culture.
- Keep employee data safe when using third-party platforms.
The Future of Employee Rewards Is Here
As technology continues to shape how we work, phygital rewards are becoming a powerful way to shape how we celebrate. Expect more personalization, more gamified recognition, and more creative ways to connect the digital and physical worlds.
At the end of the day, phygital rewards aren’t just about gifts—they’re about culture. They create moments that remind people they’re part of something bigger, whether they’re working in a branch, from home, or halfway across the country.
And when employees feel seen, valued, and appreciated? Everyone wins.
Join the Conversation
At BalancedComp, recognition is one of the most powerful tools for building a thriving workplace culture. How does your team celebrate great work? Have you tried mixing physical and digital rewards? We’d love to hear your stories and ideas, and keep the conversation going! Let’s continue shaping the future of meaningful employee recognition together.
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