Driving Performance through Reward and Recognition
By Dina Vance, Senior Vice President, Ulysses Learning
According to recent studies published by Gallup, only 30% of employees are actively engaged in their job and disengaged workers cost the United States between $450 billion to $550 billion each year in lost productivity. In addition, the disengaged workforce is more likely to negatively influence their co-workers, miss workdays, and drive customers away. Given this information, the question becomes what can be done to increase employee engagement and motivation?
Our research and experience shows that employee reward and recognition programs are a powerful driving force in keeping employees engaged. Done well, employee reward and recognition programs have a direct correlation to achieving organizational goals. When employees are engaged they have higher levels of morale, increased productivity, greater success in attracting new customers by shining a positive light on the organization, and are more likely to stay with the organization thereby reducing turnover. Following the guidelines outlined in this article will help to ensure long lasting and effective efforts for your reward and recognition program.
Monetary Rewards vs. Non-Monetary Rewards
Over half of US companies use a combination of incentives and recognition programs to reward employees for their productivity and maintain customer loyalty. According to a study conducted by the Society of Human Resource Management and Globoforce’s Employee’s Recognition Survey, when companies spent 1% or more of payroll on recognition, 85% saw a positive impact on engagement.
Programs that involve compensation such as bonuses, pay raises, and stock options that are tied to specific actions and behaviors, is one of the most common and basic methods of employee engagement. Aligning your rewards and recognition program with compensation incentives, and its availability to all employees, can give a sense of increased responsibility and shared success towards an initiative.
On the other hand, numerous studies and publications ranging from Forbes to the Harvard Business Review have suggested that non-monetary reward and recognition programs can be as effective, if not more so, than monetary compensation. Studies have shown employees are more likely to be focused, creative, and dedicated when they experience the correlation between their efforts and happy customers. This correlation can be accomplished through non-monetary items such as a recognition/thank you note or email, letting an employee know you’ll share their efforts with others in the organization, the opportunity to take on new tasks and share their influence with others, or simply ensuring they have the tools and information they need to keep customers happy.
It’s not that money doesn’t matter. If employees feel that they are significantly underpaid, or perceive that their pay does not reflect their contributions, then motivation declines. While many assume that money is a sole motivator, for others there are more important aspects of motivation. Encouraging employees to deliver superior performance, and the chance to make a difference and be recognized for it, can be a much stronger incentive. It is important to focus on both tangible and intangible rewards and recognition.
One critical component to making a reward and recognition program successful is to involve employees in the conversation of what motivates them. What works for some doesn’t necessarily work for others. Survey and listen to employees to be more effective in linking rewards with their personal interests and priorities. For example, you may discover that some employees would prefer a free lunch, a dress down day, a manager cooking breakfast for them, leaving a ½ hour early, or participating in a team event like a pizza party.
Another important aspect to consider is diversity and the demographic of the workplace. A diverse workplace requires incentives that are adaptable and creative vs. routine to keep programs fresh by tailoring rewards to different workforce segments. Different employee groups value different types of recognition. For example, new employees to the organization may place value on resources, different roles, or building friendships. Employees who are further along in their career often seek rewards such as career development, visibility to those above them, and the chance to participate in important meetings. Remove the idea of a “one-size-fits-all” approach and incentivize employees on an individual level.
Reward and recognition programs have a greater chance at success in meeting organizational goals when rewards are tied into measurable performance. Clearly outline the specific behaviors or metrics that your organization is looking for and then let employees know how their contributions to the goal will be rewarded. One method to put this into practice is with a simple point system. Each time an employee exhibits the specified behavior(s) during a designated period of time, they are given a point. At the end of the day, week, or month they can then “spend” their accrued points from a group of rewards previously determined by the employee recognition project team (with consideration from what was learned through involving employees on what motivates them).
The example above highlights another key aspect of a successful reward and recognition program. When a program has only one ultimate “winner,” others give up easily when they see they have no chance to receive a particular incentive. This often can result in cynicism and negativity or an inverse effect on employee engagement. Instead, create games, contests, and campaigns where everyone can potentially win the incentive. Creating programs that allow for multiple winners, ensures all employees receive the same amount of respect and opportunity to keep the program equitable.
Quality vs. Quantity
An often overlooked element involves recognizing small achievements. Offering encouragement and praise when a represent does one thing well goes a long way towards their sense of accomplishment. Sharing small successes with others in the organization lets employees know they’re valued and can increase buy-in from others towards meeting similar organizational goals. Shine a spotlight on accomplishments that illustrate organizational values and share their successes publicly. Doing this not only continues to motivate your high performers, but it also provides examples to others of how to be successful.
Employees are motivated when they hear from you and others that they are making a difference. Rather than saving up and hoarding your praise, reinforce positive efforts immediately and often. To demonstrate this point, try the exercise of the “daily ten penny rule.” Put 10 pennies in one of your pockets at the beginning of each day. Your goal is to move a penny to the opposite pocket every time you coach or validate a behavior done well, thus doing so 10 different times in a day so all of the pennies are in the opposite pocket by then end of the day. This can be accomplished through verbal validation, a hand written note of thanks, an e-mail recognizing a specific behavior or action that lead to a business result, or a standing ovation during team huddles.
Happy Workforce = Happy Customers
Incorporating fun goes a long way in sustaining successful reward programs and triggers ongoing enthusiasm to give employees renewed energy and encouragement to provide their best service. Rewarding the right behavior at the right time, and in an appropriate manner, continually encourages motivation. Use of games, friendly competition, and enjoyable activities increases employee morale and harnesses a greater feeling of being engaged.
A great method to involve employees on the reward program is to hold an in house game. Have employees come up with their own contest/game ideas and give them a week to come up with options. Employees can then vote on their most preferred idea and the employee who has the best idea (and one you will use) wins a prize. This way you will also have other ideas that you can use down the road.
A common motivator for many individuals is just to feel like they have a voice in the organization. Asking employees or peers to share their best practices, or how they’ve handled a particularly challenging caller recognizes those individuals and allows them to shine. Listening to others and then providing training and coaching opportunities keeps employees up to date on skills and offers experiences that increases employee understanding of company goals.
Including peer recognition programs offers an excellent opportunity for individuals to recognize those who have gone the extra mile to help behind the scenes, often from an action a supervisor or manager may not know about. Allow employees to see the successes of others by having them fill out forms or thank you notes that can be displayed on a bulletin board to communicate the message to the entire team.
Employees who are involved in their work and committed to their organizations give companies crucial competitive advantages—including higher productivity, lower employee turnover, and greater success in meeting organizational objectives. Determine if your reward and recognition program is meeting your employee needs, and find one or two ways to infuse some new ideas and energy to maintain an engaged and motivated workforce.