Article: Effectively driving R&R through innovation and choice

Benefits & Rewards

Effectively driving R&R through innovation and choice

The challenge for an effective rewards program continues to be cost effectiveness while ensuring that they are competitive in the marketplace
Effectively driving R&R through innovation and choice

The effectiveness of R&R programs is determined by how an organization’s culture is shaped


Companies are using metrics such as employee morale, worksite productivity, employee absence, workplace safety and also medical cost reduction to measure returns


How do you create a culture of employee engagement and make it work? This is a question that has intrigued HR professionals across verticals, whether in talent acquisition or talent management. According to Aon Hewitt’s 2015 engagement survey, the top five engagement drivers for the Asia Pacific region include: Career Opportunities, Brand Alignment, Recognition, Organizational Reputation and Pay – ranked in that order. The report further states, “Globally, the top drivers point to the average employee looking for growth, equitable reward, and pride in his or her company.”  For this supplement we look at one engagement driver, “rewards and recognition”.

The fundamentals underpinning rewards have not changed drastically over the years — they have remained the same, whether it is salary, bonus or long term incentives. What has changed are single sized R&R programs that have now given way to contextualizing R&R programs to suit the needs of specific employees. This is where companies are turning towards more creative approaches in an attempt to keep employees motivated. R&R programs anchored by HR professionals besides helping companies and managers identify the right talent, impact business outcomes like workplace productivity, customer satisfaction, revenue growth and talent retention. According to a PwC report, the rewards strategists will also need to factor a combination of big data, employee preferences and business drivers. This also means that more stakeholders will actively shape rewards strategy other than HR departments.

In this supplement, we look at how companies are coping with the changing demographics at workplace and the kinds of innovations that are being driven through technology in R&R programs, and map some of the trends for R&R in the Indian context.

Spike in companies doing R&R

The trend of Indian companies engaging in rewards and recognition is increasing. It is also being viewed as an important initiative at the management level. This has led to active leadership buy-in and involvement in R&R programs. While previously many companies used it as a tool to improve performance in certain departments such as Sales, now more companies are using it across functions and levels. Increased spending in R&R programs is enabling companies to spend on a variety of engagement programs with liberal payouts and policies for medical benefits focused on healthy lifestyle. Companies today are recognizing employees not just for high performance but also for effort and tenure.

The increased spend in R&R is also leading more companies to train their managers, and companies are not only ensuring that these initiatives are included in their managers’ KRAs, they are also ensuring that there is enough support in the form of communication strategies and capability building initiatives.

Increased emphasis on personalization

The workforce today is vocal about their needs, and in keeping with this demand, R&R programs are being designed with an emphasis on personalization. Since the perception of benefits is shaped differently throughout the employee life cycle, more companies are focused on a greater variety for recognition. Companies are looking at categories such as gender, age, profession or location of work to better understand their employee needs. An example of this model involves giving employees reward points that can be later redeemed for a variety of gifts, coupons and experiential programs like outings, health and wellness programs.

With the infusion of a younger workforce, companies are matching their benefits portfolios to the aspirations of the millennials, from quicker feedback to avenues for learning & development and opportunities to work abroad. More companies are also focused on social recognition, whether it is through initiating fun Friday activities, celebrating birthdays and work anniversaries or encouraging participation in competitions and giving awards. Given that young people are also willing to share information across social media, leading companies actively engage with them through the medium while recognizing their efforts at work.

Technology & innovation

The use of technology has increased over the years including automation of a few recognition and reward redemption processes, where programs are used to automatically track and trend data. This makes recognitions, budgets and top performers easily accessible for review. Using analytics, information is used to consolidate information to allow administrators measure the value of the program.  A combination of web and mobile applications are being used to drive connect and collaboration. R&R systems are now integrated with social media, analytics, mobile and the cloud. These aspects will play a vital role in the added emphasis on personalizing R&R.

Gamification is increasingly being applied to R&R frameworks. Using the psychology of game mechanics, companies are introducing elements of game playing including point scoring, peer competition and rules of playing in order to drive greater adoption and engagement. In health and wellness based programs, companies are tracking health based actions of the employees and are rewarding them with points that can be redeemed for gift cars, discount coupons, and other company goodies. 

The challenge for an effective rewards program continues to be cost effectiveness while ensuring that they are competitive in the marketplace. According to PwC, the increasing regulation around pay governance calling for greater transparency – including aspects like equal pay, holiday pay, performance pay, minimum wage will continue to shape future rewards strategies. Following the recession of 2008, more companies in addition to looking at macroeconomic indicators like inflation and GDP are also under compulsion to balance between pressures applied by various stakeholders including government and shareholders. For measuring returns, companies are moving away from the traditional approach of focusing on “return of investments”. They are also focusing on the value generated by the investments which can be measured using metrics such as employee morale, worksite productivity, employee absence, presenteeism, workplace safety and also medical cost reduction. 

Ultimately, the effectiveness of R&R programs would be determined by how the culture is shaped. Whether it is greater leadership involvement, personalization, managerial training, or how much employee care and engagement are valued in reward and recognition, all form an integral part of the organizations culture. While push factors like bonuses, gifts, vacations will continue to be central to rewards and recognition strategies, through our engagement with the community, we also observed the need for HR leaders to focus on the environment and design frameworks that would organically interest the employee to perform better. A set up that is conducive to self-motivate a large percentage of diverse people is critically more important than extrinsic motivators operating in isolation. Even as the trend of organizations offering a bouquet of motivational solutions that will eventually drive motivation & engagement continues to catch up, increased impact of mobile technology, social collaboration will make the year 2016 a promising one to look for. 

Read experts opinion

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Topics: Benefits & Rewards, Compensation & Benefits, Employee Engagement

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