Sometimes rewarding employees can seem like a tricky topic. There are so many factors to consider that it may result in “paralysis by analysis.” However if you have a rewards budget, here are three best practices that can help make giving a less ambiguous activity.
It’s important to be consistent. Whether you are setting the guidelines for your organisation or trying to determine your own personal giving parameters, be disciplined around consistency. Start with three reward tiers, for example: a LOW reward value for actions that affect the achiever’s immediate team; a MIDDLE value for actions that affect a greater portion of the organisation; and a HIGH value for actions that affect a customer experience.
You could also consider other tier criteria such as: demonstrating corporate values (LOW); making progress towards a goal or achieving a short-term goal (MIDDLE); and producing results (HIGH). There may be a need to add another level or two to your tiers – that’s okay. The important thing about this method is that you’ve created a way evaluate achievers that is the same each time.
Many people believe that rewards should only be given when a person has achieved a great milestone. The challenge with this is that very few of us achieve these milestones every year – in fact 10% at most get recognised under these conditions. If you’re trying to motivate people or change their behaviour, recognition every 2 – 5 years is too infrequent.
The budget you have may limit the number of times you can give rewards to everyone on your team. However, you should plan to reward each person at least once per quarter. Especially lower and middle performers – these are the individuals who will make the biggest changes in behaviour if they are engaged correctly. While your top performers deserve rewards, and it’s important to reward them for both retention and appreciation purposes, the other 60-80% of your team will deliver the highest return for any rewards you give.
There is no doubt that one of the easiest things to give is a gift card. Managers can quickly go out and buy a few, expense them, and then just hand them out as needed. There are two challenges with this: first, tracking the spend and maintaining the appropriate FBT records; second, gift cards are the same as cash, and cash isn’t the best answer.
That’s not to say that cash doesn’t work because it does – to a point. Everyone wants more cash, everyone can use a gift card to buy groceries, fuel, etc. Unfortunately, these things really have no emotional component. They get spent as soon as they’re given on regular household bills and necessities – lost in the shuffle of all the other credits and debits. Instead, use the reward opportunity to associate your name, your brand, with the gift. Use tangible rewards like award points, experiences and travel to associate you with the award in that employee’s mind forever. Even if they leave your company, when they look at that GoPro or pictures from Vietnam, they will always remember who they earned it from and what they did to get it.
The same can’t be said for a loaf of bread, a gas bill or some printer toner.