Rewards And Recognition
https://www.theglobalsourcing.in/the-global-sourcing/rewards-and-recognition/
In a competitive
business climate, more business owners are looking at improvements in quality
while reducing costs. Meanwhile, a strong economy has resulted in a tight job
market. So while small businesses need to get more from their employees, their
employees are looking for more out of them. Employee
reward and recognition programs are one method of motivating employees to
change work habits and key behaviors to benefit a small business.
REWARD VS. RECOGNITION
Although these terms
are often used interchangeably, reward and recognition systems should be
considered separately. Employee reward systems refer to programs set up by a
company to reward performance and motivate employees on individual and/or group
levels. They are normally considered separate from salary but may be monetary
in nature or otherwise have a cost to the company. While previously considered
the domain of large companies, small businesses have also begun employing them
as a tool to lure top employees in a competitive job market as well as to increase
employee performance.
DESIGNING A REWARD
PROGRAM
The keys to developing
a reward program are as follows:
- Identification of company
or group goals that the reward
program will support
- Identification of the
desired employee performance or behaviors that will reinforce the
company’s goals
- Determination of key
measurements of the performance or behavior, based on the individual or
group’s previous achievements
- Determination of
appropriate rewards
- Communication of program
to employees
In order to reap
benefits such as increased productivity, the entrepreneur designing a reward
program must identify company or group goals to be reached and the behaviors or
performance that will contribute to this. While this may seem obvious,
companies frequently make the mistake of rewarding
behaviors or
achievements that either fail to further business goals or actually sabotage
them. If teamwork is a business goal, a bonus system rewarding individuals who
improve their productivity by themselves or at the expense of another does not
make sense. Likewise, if quality is an important issue for an entrepreneur, the
reward system that he or she designs should not emphasize rewarding
the quantity of work accomplished by a business unit.
RECOGNITION PROGRAMS
For small business
owners and other managers, a recognition program may appear to be merely extra
effort on their part with few tangible returns in terms of employee
performance. While most employees certainly appreciate monetary awards for
a job well done, many people merely seek recognition of their hard work. For an
entrepreneur with more ingenuity than cash available, this presents an
opportunity to motivate employees.
Nor will the
entrepreneur be far off the mark. As Patricia Odell reported, writing for Promo,
“Cash is no longer the ultimate motivator." Odell cited data from the
Forum for People Performance Management and Measurement at Northwester
University—which had discovered that non-cash awards tend to be more effective;
the exception was rewarding increasing sales. “The study
found," Odell wrote, “that non-cash awards programs would work better than
cash in such cases as reinforcing organizational values and cultures, improving
teamwork, increasing customer satisfaction and motivating specific behaviors
among other programs."
In order to develop an effective recognition program,
a small business owner must be sure to separate the program from the company’s
system of rewarding employees. This ensures a focus on recognizing the
efforts of employees. To this end, although the recognition may have a monetary
value (such as a luncheon, gift certificates, or plaques), money itself is not
given to recognize performance.
Recognition has
a timing element: it must occur so that the performance recognized is still
fresh in the mind. If high performance continues, recognition should be
frequent but cautiously timed so that it doesn’t become automatic. Furthermore,
like rewards, the method of recognition needs to be appropriate for the
achievement. This also ensures that those actions which go farthest in supporting
corporate goals receive the most attention. However, an entrepreneur should
remain flexible in the methods of recognition, as different employees are
motivated by different forms of recognition. Finally, employees need to clearly
understand the behavior or action being recognized. A small business owner can
ensure this by being specific in what actions will be recognized and then
reinforcing this by communicating exactly what an employee did to be recognized.
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