How do you reward your employees? Do you believe a company logo-emblazoned golf shirt or pen, or a photo with the company president makes the grade? It might be time for a re-think.
HRM Online talks to three experts about their top tips for cost effective, high impact rewards for employees.
Tip 1 - Take the time to get to know your employees
By Nathan Defries, compensation, benefit & HR IT manager, Luxottica
Rewards that have the highest impact are delivered within an employee's immediate team by their manager. Being confident at work has a strong impact on what you deliver and it's a good feeling knowing your manager really appreciates you.
What rewards should look like depends on the individual employee and their contribution. Unless you know the person well, rewards can often be 'hit and miss' in terms of impact.
I recommend managers take the time to understand the person's career stage, their work goals, outside work commitments and what they enjoy doing. Perhaps ask one of their close work colleagues at work if you don't know them very well. However, it is better to take an interest and ask them directly.
When rewarding an ambitious career oriented person, consider offering the employee time with a career coach to review their career and their 12-24 month plan. Other rewards could include lunch with the CEO or a senior manager to present ideas and opportunities.
When offering group rewards, look for activities that will make teams laugh, connect, have fun and build relationships.
At Luxottica, we annually reward the top five per cent of managers along with the executive team and their partners with a holiday. This provides a great opportunity for these high potential managers to engage with their leaders and share time with them outside the workplace
With many working families struggling to balance work and home commitments, supporting employees in this area is another great opportunity for companies to offer highly regarded rewards with strong impacts.
If this is the case, focus on freeing up time in people's personal lives by offering the services of a gardener, cleaner or babysitter. At Luxottica, staff have access to our Holiday Club, which is an additional week of annual leave if they use their annual entitlement.
Providing work pattern benefits that suit their lifestyle, such as hours of work that avoid peak hour, or technology that supports working and interacting away from the office can also have a strong impact on an employee's engagement.
Offering strong employee rewards can also have the bonus effect of other employees noticing that increased efforts are being rewarded and amending their behaviour accordingly.
Next time you are going to reward employees, take a minute to think about the person and what's important to them. The impact will be far greater.
Tip 2 - Prompt management to reinforce positive behaviour with instant, easy-to-use rewards
By Ann-Marie O'Neill, reward & recognition specialist
The practice of rewarding good behaviour is nothing new but unfortunately in the recent economic climate, reward and recognition schemes were one of the first budgets to be cut. Whilst this can have some instant budget savings, I have found that the lack of an effective reward and recognition scheme will actually cost the business more in the long run.
Provide the resources
Make it easy! Provide managers and team leaders with simple, affordable recognition resources such as:
Sticky notes - Simply write a brief note of congratulations, encouragement or thanks and just peel and place the sticky note on an employees' desk, computer or report to let them know you appreciate their great work.
Praise booklets - It's no secret: showing appreciation is a powerful way to improve relationships. Pre-printed complimentary notes provide a fast, convenient and high-impact way to recognize those dedicated employees who get the job done with an outstanding attitude. Personalize the note with the employees' name and present it to them with words of encouragement.
Thank-you cards - Never miss an opportunity to let an employee know their efforts are noticed. This can be achieved by keeping a small supply of note cards and gifts on hand for recognition opportunities. A card offering unique greetings is the perfect way for showing you care. By simply writing a few words or a short message, you can change the work environment, reduce turnover and create an atmosphere of teamwork.
Don't cut back in tough times
When times are tough and budgets are tight expand your recognition program instead of cutting it back. Employee recognition isn't a luxury and it isn't a program you can slash to save a few dollars. It has become more important than ever to inspire, engage and retain talented employees. Recognizing the value of employees is an essential part of success in any organization and an effective recognition program will pay for itself over and over.
Tip 3 - Develop a high impact performance pay program
By Jairus Ashworth, practice leader, remuneration & reward, Hewitt
From a rewards perspective, the highest impact tool available to companies is an effective performance pay program. This needs to align the organization's business strategy with drivers of performance to ensure employees that make the greatest contribution to the business are appropriately rewarded.
The reality of the work environment is that many employees are looking for opportunities to move on, after riding out the worst of the global financial crisis. Employers that have a high-impact rewards systems will not only keep employees happy and productive, they will also ensure they don't lose their best people to competitors.
According to Hewitt's 2009 Best Employers study, 62% of organizations with high levels of employee engagement have a positive perception that performance has a significant impact on remuneration, compared to just 35% of other organizations.
To make an impact, a reward or 'bonus' needs to be an amount that is meaningful to an employee. This is typically at least 8% of an employee's salary. Reward programs of this size must be structured to ensure return on investment.
A well designed and executed performance pay program links financial reward to set performance indicators and also tracks performance to ensure incentives are not just 'cash grabs' for employees.
For organizations that already have an effective performance pay program in place, they may be able to improve them through rewards 'optimization'.
Conduct formal research with employees and ask what it is about their rewards that drives them to perform. Ask them to rank items in order of preference and how they would trade them off. For example, we have found a number of senior executives consider $1 of car allowance to be valued at $1.50. Listening to employees in a smart way; not just asking them what they want but asking them to make trade-offs, will ensure employers understand what will be truly valued in a rewards program.
Ultimately, organizations need to identify what employee's value and link the volume of these reward offerings to performance to achieve cost effective, high impact rewards.