The secret of employee reward strategies
“Money can't buy happiness” – a much debated quote that we hear often. When it comes to employee engagement, this phrase often rings true for many employees.
So, is rewarding employees in the workplace an essential component of an effective employee engagement strategy? Yes, but they involve far more than just financial reward.
Organisations have long known that performance management and reward schemes encourage desired behaviours and motivate employees to perform at their best, but what should this dimension of employee engagement cover? If executed incorrectly, reward systems can actually decrease an employee’s motivation and engagement, so getting it right is critical. It's important for managers to understand which behaviours they should reward, when to reward, and how to shape that reward for each individual.
Workplace engagement is multi-faceted, so it's imperative to know and understand your people as much as you can.
Whilst one employee may be driven by monetary rewards, another may prefer public praise and appreciation. Equally, whilst one may be motivated by structure and routine, another may be driven by personal development. Demographics such as culture and generation can also make a difference. The instant text message that satisfies a millennial employee could easily frustrate a baby boomer who prefers recognition delivered in person.
How do we reward our employees?
At Thomas, we use the Thomas Engage model to help us shape our strategy. This model reinforces that reward also covers non-monetary elements such as recognition in the form of praise and appreciation, or opportunities for growth and development, but each of these are required to be tailored to the preferences of the individual employee.
We have found that the best way to manage this is through comprehensive 1-1 meetings, held on a regular basis, between the employee and their line manager. These meetings are an opportunity to discuss not only performance (so there are no mid-year or year-end surprises), but also help ensure that the manager is aware of the employee’s general satisfaction levels in the workplace. Only by having comprehensive meetings can a manager fully understand his or her people, and therefore ensure they provide a workplace environment in which each individual can prosper. Remote workers actively utilise webinar or online meeting technology to ensure a 1-1 is never missed and that every employee is receiving the same level of support.
Our workforce is diverse and what drives productivity, wellbeing and overall job satisfaction will be equally distinctive. To help our managers ensure they are covering all bases, we provide them with a structured 1-1 template that employees complete and share with their line manager in advance of their meetings. This gives the manager time to read through the comments and allows them to enter into a constructive and helpful discussion tailored to the individual employee’s levels of motivation and aspiration, as well as discussing their activity and performance levels.
At Thomas, managers review the seven drivers of the Thomas Engage model during monthly 1-1s with their reports, and open up discussions around how to improve on these. This includes looking at reward, which gives the employee the chance to offer how they would prefer to be rewarded and recognised, and allows them to share their current feelings towards the effectiveness of this driver in Thomas each month. This helps us to focus our reward strategy and make improvements month on month.
How can you implement reward strategies to motivate employees in your organisation?
1. Recognising and rewarding employees can positively benefit both your employees and the bottom line of your business. The best way to optimise your rewards programme is to implement a consistent, company-wide strategy that is paired with clear objectives.
2. Use creative ideas to reward employees to satisfy the diversity of your workforce. A financial reward may seem like the easy option, but many studies have pointed to non-financial incentives as being equally, if not more effective motivators. Ask your employees what incentives they would like and use this as a starting point for planning your strategy.
3. Communicate effectively to convey the messages of recognition and drive involvement from the full workforce. You could utilise your staff intranet or internal social media platform, run employee awards that are presented in front of the whole company, and/or implement a kudos system through which employees can recognise their peers.
4. Finally, know and consult your employees. Only by truly understanding your people and their individual preferences, can you successfully tailor the delivery of the strategy. Don't just get their input in the set-up stages; make sure you regularly review the effectiveness of your reward scheme with your employees.
Committing time to implementing or improving an employee rewards and recognition strategy may seem like a low-priority job when you've got pressing issues with performance or conduct to deal with. However, invest in measuring the impact of reward systems on employee performance and you may see that an effective reward system correlates with employee motivation. Your workforce will feel appreciated and recognised, more motivated and committed, and ultimately create a high-performing organisation.