This is the age of young start-ups where everything is up for experimentation. Things like bonuses that once stood as the beacon of performance evaluation no longer apply to this fast-paced environment. Even the more established businesses are taking a leaf out of the start-up book and trying out reward strategies that represent their own unique culture and creativity.
There really are no limits to the creativity involved. Some organizations are dabbling with gamification, some with peer rewards, while others roll out the red carpet for outstanding employees with a front-row parking spot, a bottle of expensive champagne and the works.
So, where does your reward strategy fit into this new scheme of things? More importantly, is it time to reevaluate your organization’s reward strategy?
A new take on reward programs
Some of the biggest names in global business have given into change and are coming up with some innovative new ways to reward employees. Many organizations are experimenting with the idea of individual rewards and team rewards to achieve a balanced program. These organizations combine their clear understanding of their business objectives and design the rewards program that help them meet these goals in the short as well as the long term. Companies like GAP, Westin, and DDB Worldwide are already working on blended models that include monetary compensation, gifts, commendations, and perks that go beyond the ubiquitous annual bonus for the employees. Let’s take a look at few real world examples to understand them better.
As we mentioned earlier, things have moved on from the simple idea of an annual bonus for the employees. Companies are now experimenting with more frequent bonuses in the form of cash or stock options, sometimes in exchange for new ideas, sometimes in exchange for everyday workplace performance.
- Google - Biotech company Genentech offers checks worth $1000 to $2500 to employees for excellent performance. At Google, on the other hand, the same is done by peers. Even though the sum is not too large at Google, it carries a symbolic message for high-performers that their work is being recognized by everyone on the team, especially who are directly benefit from their work.
- Samsung - Employees at Samsung are financially rewarded for submitting patent applications on behalf of the company. Employees are also rewarded with cash bonuses for applying new technologies in the product line of the company.
Gifts work best to reinforce positive behavior in employees. They need not be the most expensive items in the market, but they must have a perceived value that incentivizes employees for their efforts.
- Creativity - Creativity is expected from a creative agency of global repute. Managers at DDB Worldwide often gift high-performers with bottles of premium champagne.
- Exotic vacations - Westin employees get a five day exotic vacation to any of their locations for demonstrating exemplary work ethics and performance. However, since exotic vacations may not be viable for every organization, a few extra vacation days for employees may work just as well.
When done in right proportions and with fairness, acknowledgements and recognitions can help cultivate positive behavior among employees just as well as gifts and cash remunerations. In fact, some experts believe it to be more effective compared to cash incentives in the long run.
- Great Performers - Honeywell’s Great Performers program for its employees features portraits and stories of the top performers across the company offices. If elaborate measures are not possible for your organization to emulate a similar program, you could at least look at including such stories of inspiration in the internal communications of your company.
- Failure awards - At financial software company Intuit, there is no such thing as failure. The company seems to be following the mantra, “either you succeed, or you learn”. Every year, teams with unsuccessful ideas that brought a good deal of learning for the organization receive the Failure Award at a company-wide annual ceremony.
Perks are often called subtle rewards built into the everyday work environment. They help in attracting and retaining top talent, apart from encouraging employees to perform.
- Brag-worthy perks - Apart from gourmet cafés, on-site laundry center, massage and hair salon for employees, Google also lets them bring in their dogs to work. These perks come with a set of basic guidelines like, being mindful of coworkers who are allergic to dogs and making sure they clean up after their pets.
- Perks to reshape the future - Starbucks takes the employee perks game to a new level with Arizona State University. Full-time and part-time Starbucks’ employees have the opportunity to continue their education online at ASU for free. Perhaps not every organization can get into a similar arrangement with another university, but you could provide tuition fee reimbursement to select employees every year and become a part of their personal growth.
The need for a good communications plan
Once you have decided on your rewards strategy, your PR and HR teams will need to come up with a strong communications plan to back that up. Employees must be fully aware of the reward program - every expectation, and every incentive must be thoroughly understood by each employee. Make sure that everyone is clear about any changes in the existing incentives policy.
Apart from these, you must ensure that the reward strategy is fair, and consistent to be impactful for the organization as well as the employees. Lastly, keep a regular check on the performance metrics you define for your reward policy. Make sure that the plan is delivering appropriate results for the organization.
To summarize everything, your reward strategy must be in-line with your organizational goals, be fair to the scope of achievements, recognize and differentiate between individual and team effort, and add value to the lives of your employees to ensure attraction and retention of the best talent so that your organization can achieve its goals. If your existing strategy is delivering all of these results, then you probably don’t need to tweak it. But if in case it is not, then it is indeed time for you to be innovative and rejig your rewards strategy that truly works for you, your employees and your organization.