Loyal and dedicated employees represent a business’ greatest asset, especially during challenging times. It is always important for management to show its appreciation to those employees who routinely give 110%, represent the company well, and contribute to its success. This is particularly true during tough times. In recognition of this, many executives implement employee recognition and reward programs, as well as job promotions and salary increases. Understanding the various types of programs that can be used and how best to utilize them is important for all businesses striving to retain their best employees.
According to findings from a survey conducted by the Hay Group, a global management consulting firm, in conjunction with Fortune magazine’s rankings of “The World’s Most Admired Companies” and “America’s Most Admired Companies:”
What these findings indicate is that employee reward programs may be a notable differentiator between the “Most Admired” companies, which embrace these programs, and other companies.
Not every employee reward program fits every company. It’s important to develop rewards which will be valued by your particular employee group and which also do not interfere with the company’s day-to-day operations. For instance, some companies offer incentive travel as part of their reward programs. This might be suitable for a large company with many employees, but not a great idea for a small business that can not afford to lose key employees for too many days beyond their already earned vacation time. On the other hand, shopping based rewards (e.g., “ABC Company” dollars provided on branded checks and redeemable at a various retailers or gift cards) are probably universally appealing to all size and categories of companies. Similarly, providing rewards of brand-name merchandise, which can be promoted in an “Employee Reward Program” catalog, is also suitable to a variety of businesses. Another option for some companies to consider is a pre-paid debit card operating on a major card platform such as VISA or MasterCard. This type of a reward offers businesses and their employees more flexibility.
For some businesses, customized employee reward and incentive programs are the best way to go. They enable a business to best reflect its corporate culture, nature of operations, employee demographics and any special selling or marketing campaigns that might be underway. These programs can have a company-specific name, logo, tagline, etc., giving full impact to the program and its role in demonstrating management’s appreciation of employees.
Just as the type of reward offered is important so too are the different categories for recognizing employees. Depending upon the type of business (i.e., service, manufacturer, distributor, sales organization, etc.), companies can elect to reward employees for:
We all have heard about “Employee of the Month or Year” awards, but what about “Peer-to-Peer Recognition,” where other employees nominate a fellow employee for their contributions. Other award categories include:
Are there reasons not to initiate a certain employee award/reward program? Yes, if it is not going to be in the interest of the entire organization. Employee reward programs should not be developed with the intent to promote competition between employees. That doesn’t work and can be detrimental to the business. It’s fine to recognize employees for their achievements and contributions, but not if the success of a few is used to make other employees feel inferior. That defeats the purpose of employee recognition programs which should be designed with the goal of making all employees feel that management values and appreciates them. In fact, to support this objective, some employee reward programs are team-based wherein all the members of a business unit are rewarded at one level, even if one or two were the primary reason for the rewarded achievement.
Many businesses use their company outing or holiday party to announce winners of various employee recognition awards. While this certainly is one way to go and adds extra excitement to a company event, providing awards throughout the course of a year spreads out the excitement and helps maintain employee morale year-round.