Should companies downplay cash bonuses and instead use some sort of employee reward program?

by on May 11, 2009 · 0 Comment POSTED IN: HR Info Center

Employee reward programs are simple and very effective

An employee reward program doesn’t mean, don’t pay your people or don’t give them bonuses, give them as much as you can possibly can. But that is part of your compensation strategy. If you’re going to really engage people and reward employees, it needs to go above and beyond.

Make your employee reward program memorable
There is one study from American Express Incentive Services. When asked, what did you do with your last cash bonus? People responded well. Almost a third said, “I paid bills.” Another one in five couldn’t remember. If you look at big time awards that people win, whether they be Olympic medals or Academy awards or the World Cup, they pretty much remember those awards.

Part of the idea of an employee reward program is that it be memorable and if one and five don’t remember what they did with it and almost a third are using it as part of their compensation plan to pay their bills, that is really not what you are looking for. So, the idea of rewarding excellence, why is it important? Well, how do we measure that success?

People kill to get on the Fortune 100 Best Places to Work. Why do they do that? Well, there are a lot of reasons.

Pride in ownership, we’re best in class.
Recruiting. There is a casino in Las Vegas that made the list and their HR people said, as we opened a new casino, we had to fill like eight thousand jobs, or something, and we filled them pretty quickly. The HR team member said, “I was surprised how many times people reference that we were one of the best places to work”. So, does it help with recruiting and pride in recruiting? You bet.

Don’t let your managers overlook frequent recognition as part of your employee reward program
As for recognition, it is probably the fattest pitch that managers miss. Telling employees that they are doing a great job costs nothing, counts big, and it is so easy to do more. Isn’t it interesting the key to engagement, communication, is using recognition and a simple employee reward? All of us have done something in our careers that was truly excellent. And we were never even mentioned or rewarded for it, we’re not very likely to repeat that behavior. That’s human nature.

When you ask employees what the top two issues are they consistently come back and say, recognition and being in on things. Being engaged. And that is fascinating. This huge disconnect. When you think about it, it is really interesting. If your employee showed up today, their compensation and benefit was good enough. If they showed up, comp and benefit was good enough.

The challenge to management and leaders is, now that they are here, how are we engaging them with an employee reward program and getting their best work?

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