The Future of Employee Rewards: Will be earned but not given

Employee rewards and recognition is still the work of the managers and HR in 90% of organizations much like compensation and benefits. It is yet another task, another chore, another line item in the to-do lists of managers and HR.

Nomenclature varies from organization to organization – Spot Awards, Star Employee, Performance Champion, etc. The process might also vary from one organization to another – manager nominates, functional head or a panel selects the winner, HR communicates to the winning employee, either over email or in a larger forum such as a town hall or a floor meeting. But, the overall concept of employee rewards remains the same across most organizations.

There are a few progressive organizations that believe in the concept of 360 degree recognition and invite nominations from peers and colleagues. In most cases, these nominations need to be scrutinized and accepted by the managers/ HR before it can be released to the employees.

A good number of organizations use some sort of process tools to automate the rewards and recognition based on predefined rules. These tools simply make the processes more efficient and reduce the chances of errors. There is hardly any built–in intelligence in these tools to decide winners based on continuous assessment of employee performance. They just process the requests from managers and communicate to the selected employees.

In the future, as the new generation of employees enter the workforce we have good reason to believe that the rewards and recognition scenario will also undergo a massive transformation. Employees will no longer be ‘given’ rewards by their managers and HR but will ’earn’ the rewards themselves based on their actions and performance. Systems powered by artificial intelligence will automatically assess the performance of employees based on past data and reward employees automatically objectively and fairly without manual intervention. These systems will capture data from all work tools that the employees use such as project management systems, CRM tools, issue trackers, attendance systems, learning management systems, etc. The ‘intelligent’ reward systems will be able to understand the level of challenge under which the employee is performing and the capability of the employee (based on past performance) and reward him or her accordingly.
What this means is that employees who are at higher of performance might get rewarded less for performing the same level of task as those employees who are still performing at a lower level. Of course there could be a different school of thought on that. The HR and the management will still be able to define the rewards framework, the thresholds, the levels and quantum of rewards.
This is what we believe the future of employee rewards will look like. Employees will not have to wait for their managers to reward them but will earn the rewards themselves on the go. As always, there will be progressive organizations who will adopt these concepts earlier than others. Also, a whole new generation of ‘intelligent’ reward systems that will start coming into organizations.

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