Employee Rewards & Recognition – A tool for improving employee motivation

Introduction: In a competitive business climate, retaining employees have been a challenge. Employee reward and recognition programs are one method of motivating employees to change key behaviors to benefit a business.

What is Employee Rewards & Recognition?

Rewards: Employee reward system refers to programs set up by an organization to reward performance and motivate employees on individual and/or team levels. They are normally considered separate from salary but may be monetary in nature.

Recognition: Employee recognition programs are often combined with reward programs. These may or may not be monetary in nature. Employee recognition is a communication tool that reinforces and rewards the most important outcomes people create in an organization.

Why Rewards & Recognition?  
An employee rewards & recognition programs results in

• Improved performance
• Motivation
• Employees feel that they are valued for their performance
• Improves teamwork
• Employees feel more responsible
• Builds positive morale in the work environment
• Reinforcing organizational values and cultures

Types of Employee Rewards & Recognition Programs:

Reward Programs: These are monetary in nature. There are number of types of reward program aimed both at individual and team performance.

• Variable Pay: Variable pay can be tied to individual employee performance, organization’s performance, performance of business units or combination of all these.
• Incentives: Incentives usually reward individual accomplishment and are frequently used in sales organizations to encourage sales persons to generate additional business generation.
• Profit Sharing: Profit sharing is usually given to reward employees for their contribution to an organization’s achieved profit goal.
• Stocks: Allotment of stocks has become an increasingly popular method in both established organizations as well with start-up organizations. Employees tend to stay a longer period with these kinds of rewards. There are number of choices like stock options, additional stock purchase programs, and restricted stock units.

Recognition programs: Recognition may or may not be linked with monetary benefits. Recognition can take a variety of forms:

• Formal recognition programs can include regular recognition events such as lunch or dinner, star performer recognition, organization’s news letter featuring the accomplishments of employees or department recognition, outstanding team recognition and providing additional vacation time or sponsoring a vacation plan.
• Informal recognition can take the form of privileges such as working from home or starting late/leaving early.

Tips for effective employee Rewards & Recognition program

• All employees must be eligible for the recognition.
• Identification of company or team 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 team's achievements.
• Determination of appropriate rewards.
• There has to be a transparent process in identifying the eligible employees for rewards and recognition. Managers and senior management should be included in this process to avoid favoritism.
• Program has to be communicated appropriately and has to be widely spread out in various occasions.
• The rewards & recognition to be done or to be given by the senior management team in town halls or on certain special occasions in the organizations.