Some employers feel only money can motivate staff. While that may be the case for those in sales, for others it has limited application as, in time, they become used to the pay and resent what is taken in tax.
In contrast, as good managers know, it is possible to motivate employees by recognising and rewarding traits the business wants to encourage. It is the reason why many public-facing firms have ‘employee of the month’ boards; their aim is happy employees in conjunction with business success.
But a recognition and rewards scheme can do much more. Used properly, it can reduce staff turnover, which can be very disruptive and ultimately will involve expense in finding replacements who need training.
For Charles Cotton, senior reward and performance adviser at the CIPD, a reward policy can not only support an organisation to reach its goals, he says it can also: ‘guide an organisation’s objectives and legal obligations as well as the needs of its employees… it can enhance a firm’s reputation as an employer of choice.’
No matter the driver, any scheme and its processes need thought over the end results and the steps taken to get there. This means, in practice, rewards ought to ignore sales targets (because that often leads to bad sales), and instead, looks at, for instance, service, patient satisfaction and complaint reduction.
Scheme set-up
Setting up a scheme is not hard, but it does require consideration says Lauren Sweeney, head of people at Virgin Incentives and Virgin Experience Days. She advises ‘defining the objectives and the reasons for starting a reward and recognition scheme as this will impact what firms offer.’
She notes that rewards must be used strategically. Activity will not increase because of a gift given on someone’s birthday. Similarly, loyalty does not follow from performance-based rewards. In her opinion, the best way to create a reward and recognition scheme is to find out what employees want. As she highlights, ‘some might want traditional rewards like long service awards, but others might want in-the-moment recognition to keep them motivated day-to-day.’
As to the rewards themselves, cash is not always best and in fact can become quite expensive. A bonus in one year becomes a benchmark that needs to increase yearly to hold value. Further, cash can easily be lost on the triviality of everyday life. On top of that, staff may not know precisely how a reward was earned since it could be based on several elements of pay.
The best alternative, and one that is easier to manage, are vouchers and gift cards – they are distinct from cash and can be held separately from daily spending.
Of course, rollout is important too. While Sweeney says rewards may be publicly announced, given via a payslip, emailed or posted, she warns that the process is one that should be on-going. In particular, she says: ‘It’s important to check in with people to get their views of the scheme and how it could be improved – there’s no point setting up a rewards scheme if your people aren’t going to use it.’
It should be said that for those that want a helping hand, there are a multitude of third-party providers as a search for ‘employee rewards’ demonstrates. These providers offer online portals that allow employees to choose from selected rewards.
Be even handed
Many firms engage with employees over business decisions and it should be no different when it comes to rewards. As Cotton says, ‘benefits offered to employees often depend on their grade, location or occupation. However, it’s important that benefits are fair, otherwise the purpose is undermined.’ Regardless of grade, he says different benefits should always be justifiable.
Another point to consider is the passage of time and that values change. Where parties and hotel stays may once have been in vogue, they invariably become less valuable when children arrive.
Beyond that Cotton points to ‘research that shows that non-financial rewards can be just as important as pay.’ Here he cites personal and career development, flexible working, employee involvement in work processes and changes that improve the work-life balance.
He adds that ‘employers have become increasingly aware of the importance of supporting the wellbeing of their staff, particularly since the onset of the pandemic.’ It makes sense that, as before, checking in with staff might find that a season ticket loan is no longer wanted whereas the cycle-to-work scheme might be.
And referring to money, it is entirely logical that employees will value a £25 voucher in a shop they frequent compared to a £50 voucher for a shop they do not. Beyond that, it is possible to offer a much sought-after reward that costs nothing to provide – a free prime parking space outside the practice for example. Further, qualifying criteria can change each month to support a desired business goal.
Lastly, any scheme must be properly communicated to staff – they need to know how it works, what is on offer and what they need to do to be rewarded. This is where Sweeney says it helps to ‘give employees a personal account where they can redeem their rewards instantly.’ These, as noted earlier, can be offered by third-party providers.
It’s about the people
In summary, practices are based on people and with the right programme, employers can please staff with incentives and improve business performance. Sight should not be lost that rewards may have tax consequences so good advice is essential.