Tuesday, July 01, 2008

Employee Rewards and Recognition

Employee Rewards and Recognition
By Srikant G

“I can live for two months on a good compliment.”—Mark Twain
How do you keep an employee motivated? The answer to this question is as complex as the origin of life. Most companies have adopted rewards and recognition schemes as a tool to motivate employees. Every company has a plethora of awards – Star of the month, star of the week, fortnight hero, quarterly champ etc. But do these rewards really lead to improvement in morale? Unfortunately the answer to this question is as foggy as Delhi on a winter morning. In most cases rewards and recognition programs are major failures; in fact they often lead to discontentment in the team. The greatest challenge for any such scheme is the nomination process. How do you nominate a “star”? There have been cases when an employee has been the star of the quarter but has got a poor performance rating. Does this mean that employees cannot be motivated? Is it the death knell for employee rewards and recognition? Fortunately there is still hope. The problem of recognizing or rewarding an employee for exceptional performance is not wrong; it’s the implementation that’s flawed. The Human Resources team should be thinking of new ideas rather than adopting the tried and tested methods. What works in MacDonald’s will not work in Mauruti Udyog.
Rewards Vs Recognition
Though often used inter changeably rewards and recognition programs should be considered separately. Reward systems refer to programs set up by a company to reward performance and motivate employees on individual and/or group levels. They are normally considered separate from salary but may be monetary in nature or otherwise have a cost to the company. Recognition programs are generally not monetary in nature though they may have a cost to the company. Recognition elicits a psychological benefit whereas reward indicates a financial or physical benefit.
The key to developing a rewards program is as follows[1]
Identification of company or group goals that the reward program will support
Identification of the desired employee performance or behaviors that will reinforce the company's goals
Determination of key measurements of the performance or behavior, based on the individual or group's previous achievements
Determination of appropriate rewards
Communication of program to employees
Types of Reward Programs
The following are the regularly used rewards programs
1. Variable Pay
2. Bonuses
3. Profit Sharing
4. Stock Options
Recognition Programs
Recognition programs must be separate from the rewards programs. Recognition can have a monetary value (gift certificates, plaques etc) but money should not be given. Glasscock and Gram[2] noted in National Productivity Review that effective recognition methods should be sincere; fair and consistent; timely and frequent; flexible; appropriate; and specific. They go on to explain that it is important that every action which supports a company's goals is recognized, whether through informal feedback or formal company-wide recognition. Likewise, every employee should have the same opportunity to receive recognition for his or her work. Recognition also needs to occur in a timely fashion and on a frequent basis so that an employee's action does not go overlooked and so that it is reinforced to spur additional high performance. Like rewards, the method of recognition needs to be appropriate for the achievement. This also ensures that those actions, which go farthest in supporting corporate goals, receive the most attention. However, an entrepreneur should remain flexible in the methods of recognition, as employees are motivated by different forms of recognition. Finally, employees need to clearly understand the behavior or action being recognized. This is ensured by being specific in what actions will be recognized and then reinforcing this by communicating exactly what an employee did to be recognized.

Recognition Programs
There is a sincere need to look beyond the obvious when it comes to recognition programs. Here are a few ideas, which can truly motivate an employee
Peers Recognition – The true worth of any employee is known by his or her peers. The nomination for any award or recognition should be made by the team members rather than the supervisors.
Send a hand written note – The greatest recognition that an employee can get is direct recognition from the top brass. Supervisors should request the company bosses to send a hand written note to the deserving employees. The note needn’t be elaborating even a “thank you“ from the company MD means a million bucks to the employee.
Applaud – If anyone does anything worthwhile give the person a standing ovation at your next team meeting.
Reward Effort as well as success – All ideas need not be successful but ideas need to keep flowing in. Initiate an award for the best ideas that failed/could not be successfully implemented. For eg 'the best idea that didn't work' award. This stimulates positive behavior and innovation.
Create a culture of informal recognition – Recognition like leadership can be displayed at and by all levels of the organization. Create a culture where teams openly appreciate each other’s successes.
Enjoy Work – Each and every achievement of the team should be celebrated. Introduce concepts Like “Pizza Friday” or “Saturday Matinee” (Every Saturday one employee of the team gives a small presentation- fifteen to twenty mins - on a topic which is totally unrelated to work for eg a review of a favorite book or a movie)
There are millions of such ideas. The HR team needs to take the initiative in unearthing the recognition program best suited for their organization. The first step towards this is to conduct employee surveys (Appendix 1) .A sample survey is mentioned in the Appendices. Before commencing recognition program the management should ask a few questions regarding its feasibility (Appendix 2). To have an unpolluted environment we need to grow trees similarly to have a stress free, motivated environment in office we need to grow people. It is difficult but not impossible to motivate employees all it needs is a little effort.

Appendix 1 - Sample Template
Sample Attitude Survey
(Introductory Statement -- make specific to department)Before we implement a recognition and rewards program in this department, we'd like to get an idea of what kind of program our employees would like to see and how it could be positively implemented. This survey is intended to be anonymous, but you may add your name to the bottom of the questionnaire. Please return your completed questionnaire to ________________ by _________.
1. Do you receive positive feedback from your supervisor on a regular basis? Does your supervisor thank you for the work you do? ______Mostly yes _____No, or rarely
2. Have you ever wanted to be able to recognize good work done by co-workers? ______Frequently _____Seldom
3. Would you prefer to receive recognition initiated by supervisors and managers or by your peers? Or both? (Check all that apply.) ______ Managers _____Supervisors _____PeersKeeping in mind that this program is intended to involve “non-cash” tangible rewards, please respond to the following:
4. What kind of “rewards” would you like to see given? ______ Mugs, other items with a special department or University logo______ Flowers______ Certificate of appreciation______ Catalog gift certificates______ T-shirts______ CDs______ Parking pass______ Transit pass______ Dinner gift certificate______ Tickets to events______ Other: list suggestions below
5. How could we be sure such a program would work effectively and positively?
6. What drawbacks do you see to such a program?
7. Would you be willing to participate in a workgroup to implement a program?

Appendix 2 – New Recognition program checklist
Description of the practiceBenefits of adopting the practiceHow this practice worksWhat you need in place to replicate this practice Funding and top management support is needed.
Tangible improvements to the department as a result of adopting this practice.
Why this practice was so successful and is worth replicating

[1] http://www.referenceforbusiness.com/small/Di-Eq/Employee-Reward-and-Recognition-Systems.html
[2] Glasscock, Sue, and Kimberly Gram. "Winning Ways: Establishing an Effective Workplace Recognition System." National Productivity Review. Summer 1996