Article: Employee loyalty program: the binding force

#Innovation

Employee loyalty program: the binding force

It's time to look beyond the usual employee engagement measures and innovate through making it more individualistic
Employee loyalty program: the binding force

Time and again, companies have stressed on the concept of ‘customer comes first’. However, in recent times, due efforts are being made towards building a great relationship with a more important entity in the working of any company – the employee!

The Economic Times Bureau’s survey in 2013 identified India’s top 10 best companies to work for and concluded that, “A great place to work is one where you trust the people you work for, take pride in what you do and enjoy the company of people you work with. It is an indisputable fact today that creating a great workplace is an integral part of an organisation’s business strategy.”

By making every person count, a company builds trust, camaraderie and gives recognition where it is due and what better a way to spur on a person than encouragement in the right direction! Author Fredrick F Reichheld, the author of the book ‘The Loyalty Effect’ rightly sums up saying, “If you wonder what getting and keeping the right employees has to do with getting and keeping the right customers, the answer is everything.”

Creating this kind of a workplace is the prime duty of the Human Resources Team. Long-term employees make the foundation of the company grow from strength to strength instead of something that needs training every now and then. A research by Bain & Company reveals that each year, an average company loses 20-50 percent of its employee base. Helping the company lower this attrition rate and creating an office culture that is healthy and fun, therefore becomes a major goal for the HR team.

To propel this, the HR departments devise multi-pronged loyalty programs to establish commitment from the workforce and make the company an “employer of choice”. While most of these programs are performance driven, there are also various other overall benefits that are thrown into the ring to keep the staff excited about being a part of the establishment.

While the base pay covers every day performance, there are group insurances, group saving schemes, group banking facilities that add to it. The HR team initiates services like lower banking fees, exclusive insurance and savings plans, loan facilities, credit cards etc. helping employees plan their finances better. Furniture giant Ikea has launched ‘Tack’, a facility that makes an “equal contribution to their pension plan, based on the company’s financial goals being met”. Such encouragement to those who are instrumental to success bodes well for every business.

Apart from these generic benefits, incentives and bonuses to reward target-specific achievements are also employed. The HR keeps a track of the employees’ performances through appraisal analysis, Lickert Scale Surveys, interaction with peers, and contribution to specific and overall success of the firm, apart from other aspects of their personality and ability to deliver these bonuses on a regular basis. This not only creates a healthy competition in-house, but creates benchmarks in the workforce to emulate.

The structure of these benefits however, changes with the scale and size of operation. Based on hierarchy, a loyalty program is either imbibed (equity in the company) or is created expressly (Sodexo coupons, channel incentives, Company Loyalty Cards etc.). There are many innovative employee engagement initiatives flooding the market these days. There are organisations that offer a corporate library program that lets employers sign up its staff to get free access to a tremendous resource of books across all genres to dive into, in their free time.

Such employee benefit programs make every individual look forward to a new day at work. While this may not eliminate the Monday morning blues (as humans seem to be genetically programmed to love leisure more than work!), it at least ensures that the day gets better as it goes! Some firms, like department store giant Harrods, issue special rewards cards where you can accumulate points based on your lifestyle. These points could be used against purchases. Further benefits include free gifts on purchases, rewards for referrals, special discounts in-house or in associated businesses.

These cards not only make the employee feel like he/she is a part of a special group with exclusive privileges but also reinforce a positive impression of being recognized and rewarded for loyalty. Increasing employee satisfaction, these programs keep them engaged in the business, even beyond working hours. It also benefits the company by giving it a robust database of employee activity and trends and getting to know their lifestyles with greater depth. This insight could be used in furthering their trust by making the next stage of reward more personal. Businesses also establish cross-links with associated partners and expand their network through these cards. So when a firm becomes associated with a superstore, there is cross-publicity, advertising and an easy marketing and branding opportunity that gets established – a total win-win situation!

Awards to performing employees, involving the family, celebrations and banquets for successes, festival bonuses and functional gifts are other ways HR teams take up to give immediate gratification to the workforce and make them feel like a unit. An incentive model in the pay can also add to employee engagement, encouraging them to set higher targets for themselves. Apart from these, offering flexibility in work through telecommuting, pick-and-drop facilities, food and beverage access round-the-clock and in-house leisure facilities will help produce results and have a great impact on the entire organization.

The workplace is where one spends the most amount of time in a day. So, letting them see the bigger picture and complimenting them for every small target reached while encouraging innovation, creativity and vision is yet another way of ensuring their involvement at work. When the HR team organizes regular trainings, team building exercises, team outings and trips, it guarantees that the team enjoys being together for work and play. This makes the environment at work extremely vibrant, cohesive and productive.

Most important of all is to ensure that a good manager and HR team is in place to keep this kind of motivation going and tell the employees nothing but the truth to gain trust. When a company falls, keeping it together will ensure that it rises even more powerful than before. Columbia University, in a research proved that replacing a lost employee costs 150% of that person’s annual salary. A little intervention from the management is all that is needed to make sure that such a loss does not occur as in everything, the trick is to keep everyone interested in growing together!

Topics: #Innovation, #BestPractices, Employee Engagement

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