Is it enough that you pay an employee’s salary at the end of every month in exchange for the work completed? That is, after all, the contract that you both entered into when you made the job offer.
Are you contractually obliged to say thank you? To congratulate them on a job well done? To acknowledge their birthday? To learn the names of their children? To implement some kind of employee rewards scheme over and above their pay packet?
No, there is no obligation, but for the sake of your organisation and keeping hold of your employees, it would be wise at the very least to treat them with civility. Yet, in today’s job market, where the talent pool is diminished, and the demand for well-skilled employees is growing, the advantages of a company reward scheme cannot be underplayed.
What is a reward scheme?
An employee rewards scheme is a formalised system for recognising and rewarding your workforce. Although the salary and benefits are important to entice potential employees away from your competition, an established, engaging employee rewards scheme will make your workforce feel valued and ultimately more productive.
A Watson Wyatt study of three million employees was quoted in Forbes Magazine: “Companies that utilised effective employee recognition program enjoyed a 109 per cent three-year median return to shareholders vs. a 52 per cent return for those that did not.”
Another study by Globoforce found that although 73 per cent of organisations currently have an employee rewards system, another study found that 82 per cent of employees still didn’t think they have enough recognition.
The trouble is, there is a big difference between those schemes that pay ‘lip service’ to acknowledging and recognising employees and those that make a genuine difference.
What reward scheme is the best for employee engagement?
Reward schemes can be costly and complex, but is there a way of doing things which doesn’t require the big investment? The key to establishing an effective rewards scheme for your workforce is that it needs to be woven into the very fabric of your organisation. This is not a simple box ticking exercise – this needs to be a cultural change of recognition that is strategic, consistent, and non-arbitrary. There is no massive financial investment required – more a persistent shift in attitude and approach to everyday activities to making recognition and appreciation part of the daily rhythm and routine.
Although recognising an individual under the guidance of a scheme such as ‘employee of the month’ can feel like a step forward, sometimes such schemes can prove to be demotivating. It praises an individual, which is great for that individual; however, if you have an employee who is struggling and never meets the criteria of ‘employee of the month’, then that employee is going to be increasingly isolated.
A culture-driven consistent approach
A better approach would be to implement a culture-driven approach. A system of ‘check-ins’, maybe along the lines of a buddy scheme, where every employee is tasked to check in with each other on a regular basis, given praise and support, and made to feel part of a team, instead of pitting them against their colleagues would be beneficial. A little competition is a good thing now and again – but all the time, every time, it can be draining.
A total rewards scheme builds in a number of incentives and initiatives that motivate and inspire in a way that encourages progression. Whether it is something as simple as a handwritten note of thanks, to a family ticket to a local day out in recognition of a job well done, they are all incentives that can be applied to any employee on any level.
It is important to ensure they are part of a long-term strategy rather than a quick blare of noise that disappears into the ether. This is why it needs to be part of an overall rewards system that has a clear organisational strategy that sits across the entire structure. This ensures a rewards intelligence that can help an employee build towards a pay rise or promotion that is evidenced by the tally of rewards that the individual has enjoyed.
Don’t get hung up on the tangible rewards, though, at the expense of the human touch. There are so many different technologies and digital solutions on the market which give employers the opportunity to implement a rewards scheme and lead them into a false sense of security that that box is now ticked and they no longer have to put the effort in. Nothing beats the human touch – the approach of a boss personally thanking the employee for all the work done, recognising the effort and the experience.
A handshake, a warm smile, and a genuine word of thanks can still add as much value as any other monetary reward.
Paydata can help you implement an employee rewards scheme that is unique to your organisation. For more information, contact us for an initial chat.