Love 'em or Lose 'em

Human Capital Magazine

Feeling wanted and appreciated are things that all people wish for. However, the use of rewards and recognition is out of step with today's changing workplace. HC looks at sure-fire ways of keeping your star performers happy by implementing incentive programs that look beyond the bonus.

Competent people, quiet people and even managers want to know that what they are doing is important and meaningful. Polls, such as the one conducted by research firm Success Corner, are finding that a huge proportion (about one-third) of staff are leaving their organisations because they feel that they are simply not being recognised.

While challenging and meaningful work is definitely vital, it's the little things that make a person feel wanted that matter.

"Rewards and recognition are an issue because employee turnover is currently the highest in years and the expectations of employees continue to escalate. We want more from our people, yet they are disengaging. People are treading the boards, ready and waiting for a better offer," says Glen Foster, sales and marketing director at the Ignite Group.

Naomi Simson, CEO of RedBalloon adds that "While initially happy, one-third of workers are currently seeking a job elsewhere. If employees are looking elsewhere, how productive, efficient and engaged with their employer can they be?"

It's a basic human need to be recognised and feel valued. But many managers are either too busy or far too removed to know when their staff have done something exceptional and recognise them for it.

Further, the programs that employers currently have in place are doing very little to motivate teams. Managers tend to perform lip-service and place a tick-in-the box instead of capitalising on their people's abilities, according to Foster.

"Managers need to improve the area of rewards, incentives and recognition programs if they expect their people to perform, let alone retain high achievers. Companies that don't have a strong rewards program, including those that don't have any at all, are at risk of losing their people."

Rewards vs recognition
According to Foster, rewards and recognition are often rolled up as one and thrown into the HR department to manage.

Foster defines reward as something given in return for something somebody has done. It is usually based on a demonstration of desired behaviour. The allocation of a reward is directly related to achieving a prescribed outcome. "Organisations should use a rewards program to encourage a specific behaviour that can be measured, tracked and audited. This way, positive behaviour is reinforced," Foster explains.

On the other hand, recognition is given or awarded as a token of acknowledgement or gratitude. This is usually ad hoc and often without the recipients knowing ahead of time. "The difficulty with recognition is that it can be subjective. Often these awards and citations are rushed and insincere, squandering all the goodness of having a recognition program," Foster says.

It's not about money anymore
Sincere recognition is without a doubt crucial to job satisfaction and employee retention. "When done well, rewarding staff can help to contribute to a positive atmosphere and culture, one where people are happy about coming to work," says Steve Holland, managing partner at Mynt Group.

Achieving this means going beyond offering cold hard cash to look at what staff really want. "It might be different for each person, so asking staff and getting their input can be a really good way to get them involved and enthused, so it's crucial to offer employees the option of rewards," Holland says.

While money has its place, it's usually not enough to make staff feel valued and motivated according to experts. "There is an increasing realisation that it's not about money but recognition. What employees want is to have good work recognised - to feel that their effort has been noticed," he notes.

Many organisations that have started the journey of competing for employees on recognition programs started with cash because that was seen as the easiest, most direct path to take. But after a period of time realised they're just throwing money away and not really adding any value whatsoever.

Another drawback of money as a reward is that people often consider it as a part of the remuneration package and actually budget for it. However, it's crucial to get remuneration right, according to Holland. "No one likes feeling undervalued. But rewards and recognition should not begin and end with cash."

It can also be dangerous to tie bonuses to financial performance alone. An employer should also take into account client service and satisfaction.

"Making the numbers in that quarter isn't enough if it means you are losing clients over the long term. Conversely, employers should also look at attitude - people who may not bring in the most new business, but are really putting in the effort and trying to improve. At Mynt, we are big on rewarding effort just as much as results, because that's what motivates people to keep working towards their goals. We have a really positive and vibrant atmosphere in our office and I think that our reward schemes are a big contributor to that," Holland says.

Find out what your employees really want
What motivates an individual varies from one person to the next and finding out is usually a relatively simple matter of spending a little time with each staff member, asking them what they want and what really matters to them.

"This can be done via a survey, assessment, focus groups or all of these. Once you have a motivational baseline of your employees' preferences, systematically move away from those things that staff no longer seem to value and toward those that they seem to get excited about," explains Bob Nelson, author and motivational consultant.

"This allows you to discontinue programs and practices that are not valued and add things staff have indicated they value more highly. This process will also validate those things that are currently working and provide an energy surge to your overall recognition efforts, making them more fresh, fun and dynamic," he adds.

Set goals
A powerful incentives program takes time to implement and perfect. But a good place to start is determining what you want to achieve in your efforts. "Set the goal. The clearer it is the more effective the alignment of behaviours and outcome," Foster says.

Make it accessible
Equally as important in a successful rewards and recognition program is spreading the wealth and ensuring it's accessible to everyone. While recognising some roles may foster a sense of competition, it could also demoralise those who are ignored.

Foster advocates an egalitarian program so that everyone has the opportunity to win and be motivated. "It's important to recognise everyone's contribution. There's no point in motivating only the top 10% because they're in the running for it, while the bottom 90% have given up. A program that motivates the middle majority is very important because that's where the bulk of performance improvement is going to come from."

Be consistent
Make sure it's not 'set and forget'. Constantly seek feedback on how the program is working and how staff are reacting, so you can change and innovate where you see the opportunity. And make it a management priority, not something you remember when it's Christmas bonus time.

Many rewards and recognition programs are still done ad hoc and too infrequently. A powerful recognition program should be centralised and structured so that it's done consistently, says Simson.

"Set it up so that it's regular and known so that people can be engaged and excited with it. They know when it's going to happen. Without such a structure people get lazy and the whole efforts gets lost in day-to-day concerns. Having a cycle of formal recognition like length of service, employees of the month, and above and beyond recognitions are all relevant and valid."

Communicate and measure
As in any other business undertaking, the program has to be communicated and measured on a regular basis to ensure that the project is achieving the desired outcome. It's essential to create internal awareness of the programs to keep enthusiasm high. There's no point having an incentive program without anybody knowing about it.

Keep it fresh
Keeping your rewards and program fresh is a sure-fire way of keeping staff interested and motivated. Some of the emerging trends in the incentives space are products and experiential rewards.

The benefit of these rewards is that people can choose to do something that is really important and valuable to them - whether that be spending time with their partner, learning something or having an adrenaline rush. The trick is to find that one thing that really means something and reinforce the message about the connection between the company and the reward.

Whether it's flexible working hours, time off, a holiday, or a nice night out with their partner, employers should be offering something that enhances the employee's lifestyle, says Holland. "That's what gives staff a good feeling about their job and why they do it."

And don't forget the power of promotion in your overall strategy. "It's a fantastic motivator. Mapping out a career progression, with clear goals and rewards for good work is a very effective way to make employees enthusiastic, and encourage loyalty - if you feel you have a future with the company you are more likely to stay there."

While it's true that you can't buy loyalty or people's passion for work, a well designed and carefully implemented rewards and recognition program would go a long way in helping you retain your most precious resources.

Date: 01/04/2006