Effective reward and recognition demands joined-up thinking
In today's challenging business environment it really is better to have some form of reward and recognition than none at all!
Yet a key trend emerging from recent Accor Services research into reward and recognition signals that only a minority of organisations in the UK are actually 'doing' reward and recognition well. This means pressure is on for companies to improve or lose out to competitors who do make strides to make reward and recognition deliver results for their people and their business.
Here Life @ Work talks with Colin Hodgson, sales director at Capital Incentives & Motivation, to learn what employers can do to ensure they're making the most of reward and recognition in their organisation.
Does reward and recognition really impact on the bottom line?
I have worked with a number of organisations that have witnessed a clear connection between employee satisfaction - often driven by effective reward and recognition programmes - and customer satisfaction that has enabled them to see improvements in business performance and the bottom line.
Research shows there's a significant gap between existing levels of engagement among UK employees and the levels required to promote the optimum performance from a workforce. When it comes to maximising the potential of employees - and therefore the business - managers need to ensure that all employees are fully engaged, committed and motivated to the organisation. Organisations whose staff aren't engaged are not only failing to maximise their daily performance, but they're also likely to suffer from poor morale, disruption and an extra layout of funds due to higher absenteeism and staff turnover. These factors impact on sales and customer services, as well as teamwork within the organisation.
Implementing motivation schemes that offer incentives and rewards have proved highly successful in improving engagement and increasing performance. They provide a focus for specific activity - either in the short or long term - and generate the attention, interest and momentum that might be lacking in a business on a daily basis.
What stops organisations introducing effective reward and recognition programmes?
For the employers recently surveyed by Accor Services, many (57%) were struggling to find the time to manage and administer incentive and reward schemes and felt this was the main reason why they couldn't deliver an effective reward and recognition programme. Over half of respondents also admitted they find it challenging to select the right reward mechanism (54%) and engage their target audience to create buy-in among the workforce (52%).
Incredibly, of those organisations who do deliver recognition and performance improvement programmes, over half (52%) continue to use cash, despite all evidence and research clearly indicating that this has less impact than a non-cash reward solution.
Although not specifically discussed by respondents in the Accor Services research, technology can also be a hindrance when it comes developing and launching an effective reward and recognition programme. Whilst it can make programmes more accessible for individuals, it can only do so within the 'right' communication culture that encourage and embraces technology.
What are the 'best' companies doing when it comes to measuring the effectiveness of reward and recognition?
When it comes to measuring the return on investment of reward and recognition, the 'best' companies are doing this at three distinct levels; the return on investment for the business, followed by the return for individuals and then the intangible returns that also demonstrate the positive impact a strategy is having.
When it comes to measuring the effectiveness of reward and recognition programmes, the majority of employers (43%) we spoke with rely on manager observation and feedback to assess the effectiveness of reward, but this is closely followed by 41% of employers that take advantage of employee surveys to measure how they're doing.
Significantly, 40% of companies admit they 'need to do more in this area' - a finding that reinforces the importance for organisations, particularly in the post-recession climate, to ensure the reward and recognition solutions they have in place really deliver.
What key areas would you encourage employers to focus on when it comes to implementing strategic reward and recognition?
Perhaps the most important issue employers need to consider is to align reward and recognition with their core organisational objectives and values. Are there, for example, examples of behaviours to demonstrate a particular corporate value? Can some values be described as more ‘profitable’ than others and therefore would want to be encouraged above others?
Alongside this, employers need to share and integrate responsibility for reward across all departments. HR certainly has a role to co-ordinate reward and recognition because it touches all employees, but other departments need to be involved too. Make the most of internal marketing expertise, for example. They're your professional communicators after all. Finance also has a clear role - you'll certainly need a budget and their assistance to assess how reward and recognition impacts on the bottom line.
And finally, it's important to identify any opportunity to 'join up' your employee communications. For example, could your reward and recognition programme be included in your total reward statements? Incorporating this here can help to align key employee messages, increase employee awareness of the scheme and encourage employee buy-in.
What does the future hold for strategic reward and recognition?
As organisations' confidence in the economy strengthens there's every chance that they will, in turn, refocus attentions on its employees as they strive to generate momentum and growth. However, those organisations who didn’t just survive the economy, but positively thrived, clearly recognised (and in some cases, rewarded) the most important asset throughout the recession.
