Rewards and Recognition is an integral part of every organization’s HR policy. What started off as the management’s expression of appreciation of a job well done has evolved quite a bit and acquired the overall flavor of an organization culture of appreciation and recognition. However, it comes with its own set of challenges especially when implemented in a monetary form; more prominent for high value awards. Typically the employees who are likely to receive maximum recognition or the highest recognition are possibly the highest performing ones. It is not surprising that they are the ones who would get the highest salary increments and promotions!
Whether the winner takes all phenomenon is fair or not is question to be asked. It seems only logical that the highest performing employees would end up getting the maximum recognition and rewards. The caveat to this is that it might demotivate other employees who are possibly average performers or borderline cases. The bigger sin by managers or even entire organizations is to use a kind of quota system to ‘allocate’ rewards and recognition to employees. An employee who is an average performer might end up getting a reward to ‘compensate’ for the lack of a hefty increment or a promotion! Or vice-versa! Now this is a cardinal sin! This makes the whole practice of rewards and recognition a total sham!
A better approach would be to design rewards and recognition policies to appreciate small achievements and behaviors in everyday work that align with the company values such as customer orientation, innovation, integrity or initiative – anything small but significant from an organizational people road-map. It might not be directly linked to KRAs and hence unlikely to lead of other forms of ‘rewards’ like bonus, salary hike or promotion. This needs to be incorporated in the design of the policy rather than the implementation of it. Those employees who deserve recognition should get recognized in any case; however the employee should not be ‘rewarded’ or ‘recognized’ for the same achievement or behavior in multiple forms. Now, that might not be fair!
HiFives Employee Rewards and Recognition
Frequent and timely appreciation from the supervisor might have a greater impact on employee motivation than even annual increments – according to a research study by a prominent HR consulting firm. Annual increments are supposed to aggregate employee performance over the year, rank and stack it against their peers and then reward the employee with an appropriate percentage hike. This is too much to expect from a single exercise no matter how thorough it is. It tends to disregard small ‘wins’ which could add up to bigger things and focuses on the high impact stuff. Hence, employees working on mundane stuff tend to get overshadowed by others working on big, visible projects (might backfire as well!). Plus, the increments themselves might not be differentiating enough.
The most important factor is the impact on employee motivation and performance improvement. Typically, annual increments either leave one with a bitter taste in the mouth or a rosy view of one’s performance. It hides more than it reveals!
Hence more frequent recognition by one’s manager is more effective for the employee’s development and performance improvement. However, most organizations continue to focus their HR efforts on annual reviews and increments – a few progressive organizations have started creating more noise around regular feedback and appreciation through things like Spot Awards, Floor Meetings, Thank You Cards or simply a Pat on the Back!
Do you remember the last time when you got a Rs 5,000 cash award in your pay cheque? No? That will be the most likely answer unless you are one of those who scrutinizes the salary slip every month in the hope that there might be something extra! Well, for the most of us the cash award just disappears without a trace in the salary slip. We won’t even remember that we got something extra – even less chances of remembering how we spent it!
What if, you had got Rs 5,000 worth of products of your choice instead of the cash award -some trendy gadget or a home appliance? You are more likely to remember about the award every time you see the product you got, right?
Well, non-monetary awards seem to have better recall value than cash awards. Apart from the fact that you might end up saving some taxes as well. Kind seems kinder than cash when it comes to rewards!
It is a misconception that reward programs need to be supported with heft budgets. It is the design and implementation of these programs that matter. For example, even a simple ‘Thank You’ or ‘Congrats’ card could be as effective as giving out a nicely crafted trophy, rewards vouchers or points. The timeliness of the reward is more critical than the rewards value.
Obviously technology can play a big role hear in streamlining the entire process – the line managers should be able to log into a system that allows them to instantly sends an e-card to the employee – no waiting for the procurement team or admin to source the reward. The reward closely follows the achievement – a ‘Thank You’ in time saves nine!
Obviously, nothing can substitute saying ‘Thank You’ or ‘Congrats’ in person but with the time and location differences under which organizations work these days, it might be difficult. Also, the fact that the reward system records each action, which can be pulled out for input to the performance appraisal and other processes. Hence it might be actually possible to run a rewards program at almost zero costs and still keep the employees motivated!
Imagine your manager calls you to his room and hands you a certificate and some goodies. He tells you – “You are the performer of the month! And this is your reward, but please keep this completely hush hush.” Funny, right?
Now think of another scenario – your manager calls the entire team to the conference room and talks about the achievements of the month and then goes on say “All of you did a great job and I really want to thank each of you for that. But there is one person who deserves a special mention and that is … “. Your colleagues come and congratulate you – you are on a high! Nothing spectacular, right? But social recognition does definitely leave you with a feeling of satisfaction, much more than that you would have derived from just getting the tangible form of the reward.
Team meetings, townhalls, floor meetings, etc. are great occasions for rewarding employees and they help multiply the experience for the employee. However, logistics of getting people together, arranging the venue and equipment is a deterrent for organizations from doing these events more frequently. Offline noticeboards, online forums, emails, etc. help overcome these obstacles and enable sharing of information about rewards with other employees. Online forums can be made interactive to let other employees congratulate the rewardees. This will unleash the real power of social recognition within the organization.
Here’s some findings from an independent study:
35% of employees are not satisfied with their current employee rewards programs
75% of employees say that they don’t get enough options for rewards
53% of employees do not find their current programs convenient to use
Haven’t we heard that before? Many organizations are still rooted in archaic practices of giving engraved pens, trophies and other such mementos to employees. Going back to my earlier post about freedom of choice, employees would be much happier if they get to choose what they want, of course within the budget specified. Ask the employees who get these Rs 5K pens!
Important personal milestones in the employees’ lives such as birthdays, weddings, anniversaries,etc. offer a good opportunity for reward/ gifting intervention on the part of the organization. As these events mean a lot to the employee, remembering, wishing and gifting the employee on these occasions have great impact on the motivation levels of the employee. Organizations that run these birthday and wedding/ anniversary gifting programs have seen good results. However, it is no mean task to execute these programs with hundreds or thousands of employees. Hence organizations need to leverage technology and third-party providers to run such programs.
Imagine two scenarios – one, you get a Rs.1000 cash award credited to your salary (after tax); two, you get a Rs 1000 worth of goodies as award. Which one are you likely to remember more?
The goodies obviously! One big reason why non-cash awards seem to work better – cash awards seem to disappear somewhere in your pay slip, which most of us rarely bother to check unless there is a major upside or downside.
Add to this the fact that taxes will take a big bite out of your cash award, whereas non-cash awards have a built-in tax shelter (within Rs.5000 limit per year).
Festival gifting to employees is a big event for organizations. Given the importance of these festivals in India, it is a good opportunity to appreciate employees and to reach out to their families. Traditionally gift hampers or dinnerware have been popular choices. However, the execution is a nightmare for the HR/ Admin – from decision-making, procurement to actual distribution of these products. It takes quite a bit of administrative effort in executing these programs, especially coordinating with external vendors and the internal distribution. The complexity only increases with the number of locations and headcount. All of this results in delay in getting the gifts to the employees – even then the employees might have preferred something else!