Reward and recognition programs are crucial contributors to the overall tone and culture of the workplace, as they directly impact how satisfied and challenged employees feel.
Reward and recognition programs serve the valuable purpose of eliciting the highest possible levels of productivity and performance from employees by providing them with incentives to go beyond the quality of work typically expected of them. The uses of such initiatives don't end there, however. They're also crucial contributors to the overall tone and culture of a given workplace, as they directly impact how satisfied and challenged employees feel.
In a column for Employee Benefits magazine, HR expert and consultant Duncan Brown discussed the relationship between employee engagement and rewards that he has seen throughout the course of his work. He found that one of his clients, a bank at which HR had determined that engagement levels were suffering, wasn't effectively utilizing its rewards budget. As a result, employees who felt positive about the way their work was recognized were in the minority, at only one-third. His recommendations for the organization included a greater set of performance-based rewards, as well as reforms to pay structure and benefits.
"The links between reward and engagement are not straightforward, but they are important. The weighting on each aspect of reward required to maximize engagement levels varies according to the organization's goals, culture and a host of other variables," Brown noted.
The shift toward behavior-based recognition
Fostering engagement requires that staff see a direct link between hard work and recognition – and increasingly, companies are rewarding their employees based on measurable performance factors rather than seniority. A recent study by WorldatWork found that fewer firms were offering length-of-service rewards in 2013 than in 2003. Meanwhile, 41 percent of companies surveyed were using employee reward programs that promoted specific behaviors, in comparison with 25 percent in 2008, the first year that statistics for programs of this type were available.
It's surprising that this shift has only taken place in the past few years, as performance-based rewards have existed for quite some time. In an interview with Human Resource Executive Online, PricewaterhouseCoopers Principal Steven Slutsky noted that success with sales incentive programs has driven companies to adopt behavior-oriented employee rewards for all employees.
"They started [identifying] what behaviors they were hoping to drive out of [their] sales-compensation program. That led to companies saying, 'If we can do this with our sales people, why can't we do this for the rest of our workforce?'" Slutsky told the news source.
While rewards-based pay structures are only relevant to certain types of positions, the principle that exceptional performance should be recognized remains universal.