Smart managers view employee rewards and recognition programs as an investment. The money spent on increasing worker satisfaction and boosting morale pays dividends in the form of better performance and greater customer loyalty.
Smart managers view employee rewards and recognition programs as an investment. The money spent on increasing worker satisfaction and boosting morale pays dividends in the form of better performance and greater customer loyalty. Unfortunately, even great investments need to compete with other important projects for limited funding.
When companies are struggling, they commonly look at ways to cut spending on reward programs. A survey by WorkatWork found that the average budget for these management initiatives has dropped 0.7 percent since 2008, Employee Benefits reported. However, the source also stated that it is during stressful times that the investment in employee satisfaction can offer the largest returns. Companies that fail to address issues affecting workers can see high levels of turnover, which limits productivity and increases training costs.
"Ultimately, if people are not recognized, they will leave and find places where they will be more fulfilled," Michael Rose, director at Rewards Consulting, told the source. "People have even taken pay cuts of up to 50 percent to achieve this."
Determine the objective of a program control cost
Successful employee reward programs can help firms create a positive culture that helps staff members reach new heights personally and professionally. These initiatives do not require extensive budgets, as there are many ways to offer recognition that are not expensive. The Recognition Council stated that the key to controlling costs is to know the desired objectives for the program. A strategy aimed at reducing turnover will be structured differently than one aimed at increasing sales. Knowing the goal will help firms determine who will be allowed to participate, the length of the program and how success will be measured, all of which can affect spending levels. The more precise and targeted the program can be, the more influence it will have on staff member performance and satisfaction.
The main consideration for a successful reward program on a limited budget is how it is incorporated into company culture. EConsultancy reported that recognition should be part of an overall management strategy to put people first. Respecting individuals, listening to their suggestions and creating an employee-focused culture can help firms develop a work environment that keeps people motivated to perform their best.
In this setting, the right rewards can be extremely effective. Rather than relying on cash bonuses, companies may see better results with practical rewards. These can range from everything from new tablets or smartphones to additional days off. Providing workers with something they can use will increase their appreciation for the recognition and help them strive harder for additional rewards.