Modern employee rewards and recognition programs are increasingly being reinvented to encompass not just traditional practices of compensating and thanking employees and are also venturing into newer pastures such as emotional and physical well-being of people defined as “Total Rewards”. The key purpose of reward and recognition is to convey to the employee that their contributions to the organization are valuable. This is important for the employee as it makes them feel respected, validated and vital. Experience, as well as studies shows that there is a significant correlation between reward and recognition with satisfaction and motivation.
Among the most critical characteristics of any successful rewards and recognition program is equity and fairness with a sense of evenhandedness. Fairness has to be within the organization as well as in comparison to analogous companies on the marketplace. Rewards and recognition have to include a number of aspects. To begin with assured compensation and salary with annual or special increment is a must but performance based incentives, which can be in cash or kind, motivate employees and they enjoy their work. Reward and recognition practices followed in an organization have shown to motivate employees to offer their individual best as well as endorse the sentiment of working together as one team.