As organisations transform their workforces to be pertinent in an agile and digital future, old methods of goal setting, evaluating performance and rewarding employees are unlikely to fit well with new approaches to productivity. The continuous industrial disruptions have pushed organisations to innovate and constantly evolve to keep up with the changing rewards and recognition strategies for the employees to retain and keep them engaged.
Diving into the nitty-gritty of developing a company-wide employee recognition strategy can feel overwhelming, especially when there’s pressure to meet expectations and budget while delivering an R&R experience that is easy to understand, consistent, fair and equal for all.
What is Expected from Companies of Today?
Research suggests that a well-designed rewards and recognition program can drive an 11.1% increase in average employee performance. Incentives and recognition in the workplace are associated with lower turnover rates and increased engagement levels. It makes the work environment more positive and helps everyone be more productive, all while releasing positive benefits for the people expressing appreciation. Today’s employees want a personal, flexible, and customised relationship with their employer, and they want to feel valued and appreciated for what they do.
Rewards can no longer work in silos but in close unity with performance and compensation. That’s why we need more innovative rewards to make it a holistic, well-rounded, ongoing experience rather than a particular article or one-time event. More visionary rewards represent the tools organisations need to choose, offer and align a value proposition with an employee – resulting in a satisfied, engaged and productive workforce that creates desired business performance and outcomes.
Make Employee Recognition Rewarding and Memorable
Organisations must demonstrate that they have structured their rewards reasonably by transparently communicating the link between business performance, individual performance, and rewards. Leaders must follow these three guiding principles to design a powerful employee incentives and recognition strategy:
Align Business Goals
Organisations should be clear about what outcomes they want to incentivise. These outcomes will determine what reward elements they prioritise. The business strategy should also inform what metrics define bonus-pool funding and allocation across business units.
Organisations are most successful when they review the rewards philosophy whenever there is a significant shift in enterprise strategy to ensure that rewards enable the system. In the absence of strategic changes, check on a regular cadence to gain the ability to attract, motivate, and retain top talent.
Clear Value Proposition
Rewards should link to talent ratings, and the same principles of performance management should be applied to attract talent and drive performance. Focus on rewarding real over-performers while developing others instead of trying to distinguish the broad middle. Leaders should de-couple compensation from developmental feedback and leverage innate motivators like recognition and non-financial rewards.
Decide how incentives and recognition in the workplace will contribute to your overall employee value proposition in the talent marketplace. For example, a “premium package” offered by an organisation may include top-tier compensation and benefits across the board. In contrast, others may focus on overdelivering only in areas that relate to their strategy or purpose.
Promote Equity Through Transparency
Ensure equitable design of rewards and recognition program for everyone, and check this regularly through pay equity analysis. Ensure benefits support all people (e.g., LGBTQ+ parental leave), and conduct focus groups with diverse employees to ensure these benefits meet their needs.
The organisations that will thrive in the future will likely be those that design cultures, structures, programs, and policies that prioritise recognition in the workplace and help people find meaning in their work. The key to building a long-lasting incentive and recognition program is your people. By introducing a tiered approach and involving employees, you’re on your way to creating a centralised hub for your organisation. Sodexo believes in bringing people and businesses together with its long-standing mission of improving the quality of life of everyone at work.