Reward and Recognition Programs at the Best Places to Work
Feeling valued and appreciated is a simple human need.
Contemporary workplaces recognise that how employees feel about their work has a great impact on their motivation. There is no stronger motivation for employees than an understanding that their work is relevant, and that it matters. When an employee receives recognition and appreciation, it motivates them to work harder.
High performing reward and recognition programs are present in work environments where there is appropriate acknowledgement and appreciation of employees' efforts in the workplace that support your organisation’s goals and values.
Adjusting to remote working and forgoing authentic person-to-person contact, Reward and Recognition became a COVID casualty. With the Great Resignation looming, it is important for employers to make that extra effort to showcase their gratitude to their talent.
Lack of recognition at work is among the top reasons why employees look for another job. Despite this, many companies fail to recognise employees outside of performance reviews and annual years of service awards, and that leaves team members feeling unappreciated day-to-day. Organisations need to ensure that they celebrate employee accomplishments and progress throughout the employee cycle in order to demonstrate their investment in their career growth and success. Regular, frequent recognition shows that a business wants to help keep employees motivated to hit future milestones.
DEFINITIONS
Rewards and Recognition is a system where employees are acknowledged for their performance.
Rewards are monetary and non-monetary compensation that are given to employees on account of their performance to further motivate them.
Recognition is the process of honouring employees’ level of service. Recognition is designed to encourage repeat actions by reinforcing behaviour that the organisation would like to see repeated.
Reward and Recognition Program Framework
Recognition programs and their place in an organisation’s strategy are changing. Our 2021 Best Places to Work study uncovered that the best performing organisations are taking a holistic approach to reward and recognition by centralising initiatives and ensuring alignment with business goals, culture, and talent management processes. They design their programs to consistently reinforce key behaviours and outcomes necessary to drive business success, and they measure the impact of those programs.
Another trend in rewards and recognition programs is clear - providing employees with choice and flexibility in how they are recognised is a key strength of many organisations’ programs.
Step 1: Reward and Recognition Strategy
Developing a holistic Reward and Recognition Strategy is crucial in ensuring the programs are relatable, measurable, and have a lasting impact.
In order to be recognised, employees will alter their behaviour to desired behaviours. If these desired behaviours are aligned with the organisation’s goals, then the organisation will achieve these goals quicker. Any new recognition program must define how it is going to support key goals, performance, or behaviours, otherwise ROI or impact cannot be determined.
Step 2: Audience Analysis
Elements of the Reward and Recognition activities may not be relevant to all segments of your organisation’s workforce. It is important to align the appropriate recognition to roles.
It is also important to understand how your employees like to be recognised; some will prefer public recognition, and others private.
Step 3: Program Design
There needs to be a clear business case for investment before design begins. Is it clear how recognition aligns with business goals and what the expected impact is? What metric will change as a result?
Budget and financing will play a key role in the extent of a programme; it will take time to design, launch, and maintain.
Consideration also needs to be given to a) execution; b) governance; c) criteria.
Consider who will be permitted to recognise employees - both internal (e.g. team leader, peer-to-peer) and external (e.g. customers, 3rd parties). Is there going to be top-down, peer-to-peer, bottom-up, or combination recognisers?
Step 4: Measurement
Metrics for measurement should be agreed in advance of launching programs. When implemented and designed correctly, recognition has the potential to become a key strategic tool for an organisation’s HR function in order to help drive change and improved performance.
Designing Reward and Recognition Programs
When it comes to design, different types of rewards and recognition work best in different situations, depending on the strategic objectives of the organisation, culture, and characteristics of the employees.
Rewards are positive outcomes that are earned as a result of an employee's performance. These rewards need to be aligned with organisational goals. When an employee helps an organisation in the achievement of one of its goals, a reward often follows.
Intrinsic vs. Extrinsic Rewards
Reward systems typically fall into two categories: intrinsic and extrinsic.
Intrinsic rewards are psychological rewards that employees get from doing meaningful work and performing it well.
Extrinsic rewards are usually financial or tangible rewards given to employees, such as pay raises, bonuses, and benefits.
Top-down; Peer-to-Peer; Bottom-up Recognition
Top-down recognition: Recognition is traditionally given in a top-down system, where an employee’s supervisor, manager or leadership team witnesses and appreciates their contributions
This is a great model for many reasons: since these leaders are typically in decision-making roles, their recognition often has monetary results, like a raise or promotion. These people are also in the best position to assist employees with their chosen career path or growth plans.
Peer recognition: In a peer recognition system, managers as well as other co-workers are all empowered to recognise and reward the contributions of everyone else. It’s easy for managers to congratulate an employee on their general job performance, but their peers are working right beside them, day to day. They’re in a much better position to recognise an employee’s specific contributions and understand the immediate impact those contributions have.
Bottom-up recognition: We also can’t ignore the benefits of bottom-up recognition. Managers need appreciation too. Recognition is motivating and insightful for everyone, even those in senior positions. With 360-degree style recognition, everybody in the company has a voice in how they want to express their feedback. Recognising direct supervisors and leaders for the work they do is a method of interpersonal communication that benefits everyone involved. Rewards and Recognition can be catagorised as being Intrinsic or Extrinsic.
Frequency
The frequency of employee reward programs is an important part of the success of a reward and recognition strategy. One way to categorise rewards and recognition into three tiers: Formal, Informal and Celebration.
This will help you determine the level of visibility to be given to those who are recognised - public or private, within teams or departments, or across the entire firm.
Frequency will also help you determine what, if any, rewards are going to be given. The choices vary from formal to informal, emblematic (e.g., praise, special projects, certificates), token (gift cards, points), or monetary (conferences, paid time off). It is important to think about the right mix of monetary and non-monetary rewards. Financial rewards aren’t always the most effective, so it’s often best to combine with internal certificate/award ceremony schemes.
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