1. What is the end goal of your reward and recognition program?
- Improve employee engagement
- Reduce voluntary turnover
- Reward top performers
- All of the above
This is a tough one to start with, but we start here because hopefully this question is also where your organization started when setting up the program. In the broadest sense all of these options (yes, the answer should be D) point towards one fundamental goal—motivating employees to do their best work at your organization.
But there are also more nuanced goals that may vary from organization to organization. Ultimately, your plan ought to work in harmony with, and in cases of monetary rewards ought to be integrated into, both your organization’s overall compensation strategy as well as your organization’s performance management process.
Grounding your rewards and recognition program in the core values and principles articulated in these larger organizational structures will help ensure that they are not only effective at driving performance for your organization, but should also come as no surprise to your employees. As we will see later, this cultural fit is in many ways just as critical as making your rewards and recognition program fit into your budgetary constraints.
2. What types of rewards and recognition does your organization offer?
- Annual bonus
- Mentoring program
- Additional training & development
- Feature in company newsletter
- Spot bonuses
- Profit sharing
- Individual incentive pay
- Employee stock ownership plan
- Attendance award
- Extra PTO
- Flexible work hours
- Lunch out
- Wall of fame…
Technically, this list of answer choices could go on and on and on, but clearly no one organization can offer its employee’s that many opportunities for rewards and recognition. Depending on the demographics of your workforce and your organizational culture, different kinds of reward and recognition programs might be more or less effective at eliciting the kinds of positive results that they are designed to encourage. ERC’s surveys consistently find a strong majority of employers offer some type of bonus program, but there is also significant evidence in the larger research community arguing that money is not the strongest motivator of employee performance.
While this doesn’t mean employers should stop giving out bonuses, it does mean that in order to stay competitive in the marketplace, employers need to think outside the box when it comes to rewarding and recognizing their employees. Instead of just looking at your budget, considerations such as workplace culture and workforce demographics should also play a strong role in helping to set the tone for what the most successful rewards & recognition program will look like at any one individual organization.
For example, organizations with more traditional hierarchical structures may also have a more traditional program that focuses on recognition for years of service. In contrast, a small start-up may not be able to guarantee employees a big annual bonus every year, but being able to provide top performers with flexible working hours or public praise in all-staff meetings might be just what their employees crave.
3. What are the eligibility/performance requirements for your reward and recognition program?
- Progress on individual goals
- Overall company profits
- Exempt employees only
- Non-exempt employees only
- It depends
It depends (E)—mostly it depends on the employee type and it depends on the type of reward or recognition being offered/pursued. In general, executives tend to be more likely to earn bonuses based on profitability and other financially driven metrics, while exempt-supervisory/managerial & professional positions are the most dependent on individual goal setting to receive their rewards.
In contrast, lower cost or alternative methods of providing rewards and recognition such as lunches, thank you notes, employee of the month, increasing employee authority or autonomy just to name a few, tend to come from the top down and therefore are more appropriately bestowed upon non-managerial type employees. It is not uncommon to have certain types of rewards & recognition available to only exempt, but not non-exempt employees or to only managerial, but not non-managerial staff members.
Whatever decisions are made regarding eligibility requirements, ensuring that expectations are clearly defined is critical in order to maintain both perceived and actual equity.
4. How often are employees rewarded and/or recognized?
- On their birthday
- Every day
- On work anniversary
- At the end of a project
None of these answers are really “wrong”, but hopefully your organization recognizes employees more often than just on their birthday or just on their work anniversary. An evolving, younger workforce, along with a tighter job market, is pushing employers to think outside of the box about the types of rewards and recognition programming offered, and will ultimately also demand more flexibility and variability in terms of the timing of these offerings.
Retention and spot bonuses come to mind as a growing trend in monetary incentives that will need to be distributed on a less formalized schedule than most other cash options (again, consider the predictability of the “annual bonus” structure). Less formal recognition options are also excellent candidates for a more flexible program.
Clearly, verbal praise at staff meetings for making the extra push to get a project out the door to a client ahead of schedule or lunch-on-the-boss for maintaining an outstanding safety record throughout the first quarter can happen at any time interval. However, keep in mind, these less formal programs will also require a stronger commitment from your supervisors who will need to take the lead on actually bestowing the praise (in whatever form that may take) on their direct reports and making these programs a success.
5. How does your organization communicate with employees about your reward and recognition program?
- During their performance review
- At staff meetings
- Employee newsletter
- We don’t
- Other method not listed above
“If a tree falls in a forest and no one is around to hear it, does it make a sound?” —Philosopher George Berkeley The same question applies to your reward and recognition program. You can set up a super motivating, well thought out program, with a nice healthy budget, but if your employees don’t know about it (or even don’t know enough of the details about it) it probably won’t do much good.
Especially for formats like peer-to-peer recognition where the onus lies with individual contributors (i.e. non-managerial and non-supervisory employees) to make the program function properly, employees need to know how the program works from start to finish. This is even more critical if you are overhauling an existing program or perhaps reinstating a program after it has been discontinued for some time.
Helping long standing employees understand why changes are being made and how the changes will impact them is a very important conversation to have. There is really no right or wrong answer to this question and lots of “other” options that might work better for your organization. As long as you didn’t pick (D), you’re on the right track.
6. Who oversees the administration and implementation of your reward and recognition program?
- Compensation specialists
- Human resources
In most cases, the administration of reward & recognition programs is conducted through HR, answer choice (B). However, this is really a two part question. When it comes to the implementation phase, i.e., making sure the rewards and recognition are distributed correctly and in a meaningful fashion, managers and direct supervisors play a critical role. Without their buy-in and support of these programs, employees won’t know what they need to do to be rewarded and HR won’t know who to reward for a job well done!
Perhaps even more important, is whether or not employees are actually motivated and engaged by the reward and recognition offerings presented to them. By taking into consideration all of the variables discussed in questions #1-6, hopefully the program is doing its job, but it’s hard to know for sure unless you ask!
Have supervisors ask employees how they view the program, include this question as an item in your organization’s annual employee engagement survey, or ask them yourself if you are involved in the administration of the program. Regardless of the feedback mechanism you choose, keeping the lines of communication open between employees those carrying out these programs is key to helping them evolve over time and remain effective motivators for your current workforce, whoever that may be.