Why rewards are crucial for performance management
Employees who feel recognized and rewarded will always offer positive inputs about the organization they work for, along with encouraging their friends to apply
In a world where workplace dissatisfaction is growing rampant, and attrition rates are shooting up by the minute, we must pause to ask ourselves why. Even though organisations across the world aim to understand what drives their employees’ performance, the availability of multiple performance management tools has led to upper management relying on stock answers about performance, goals, and objectives. Unfortunately, this process only maps out the ‘what’ leaders and team members aim to achieve, and does not lay emphasis on the ‘how’ and the intangible factors that influence the motivation and well-being of employees within the organization.
Extrinsic and intrinsic motivations are the cornerstones for high performance, and this comes from creating a strong sense of purpose and alignment and also establishing an effective rewards and recognition practice.
The key to doing so is by understanding that high performance is not born out of systems that offer recognition as a reward, instead, it comes from systems where leaders and managers offer recognition on a daily basis. Ultimately, when you expect great performance on a daily basis, you must also recognize your employee’s efforts with equal frequency.
For clarity on how recognition works across all levels of employees, think of your top performers– they come in to work, are suitably engaged, and offer fantastic results on all projects. However, what happens with the remaining 90% - your mid-range and low performers? To answer that, picture leaders offering recognition to seemingly unmotivated but deserving employees, who then respond with a shift in behavior to deliver better results, higher loyalty to the organization, and even participation in initiatives. Implementing a recognition program will bring you significantly positive results.
DEVISING A HUMAN CENTRIC RECOGNITION FRAMEWORK
Engagement programs work because they are armed with a deeper understanding of one crucial fact – each and every person aspires to be recognised in some form. Recognition is one of the fundamental elements that impact a person’s sense of selfworth, manner of interaction with the workplace, and performance.
With organisations measuring engagement by noting the intensity of performance and intensity of commitment, and by reinforcing such behaviours through a recognition program, organisations can see a steady increase in both.
The intensity of performance comes from a range of external factors that leaders can tap into for amazing results.
Making your employees fearless by allowing them to voice their opinions and ideas, magnifying their success when they do something that works, and offering a supportive work environment that allows people to feel as though they are a part of a team, rather than just cogs in the machine, can help leaders transform their employees into driven and passionate individuals. Ultimately, it all boils down to empowering your employees in the right way. Armed with the sense of positive empowerment, employees are more likely to work for more than just the paycheque – and this marks the difference between good work and great results.
So, how do you devise an engagement strategy that helps employees tap into their intrinsic motivation?
Brad Shuck, an academic partner at BI WORLDWIDE, states that the answer to why employees feel engaged at a particular workplace has nothing to do with the organization itself. Instead, it has everything to do with the way managers treat employees.
Additionally, employees must also connect with the larger purpose of their work, and understand why they are doing what they are doing. When employees feel that the work environment is a safe place to offer ideas and try innovative approaches to solving problems, they are more likely to be engaged and organically offer better results.
By bringing in employees who connect with your core principles and beliefs, you are more likely to have a lower attrition rate, higher engagement, and better business results too. Establishing this connection with individual employees begins right from recruitment.
MAKING EVERY MOMENT COUNT
Through our research, we have learned that 75% of what a potential employee knows about any organization is knowledge they have gained before applying for a job. This means that many organizations not only face the challenges of high attrition these days, but also the significant challenges of attracting good talent.
In order to build a more human centric work environment that focusses on offering stability, support, and on fostering high performance, our global researchers at BI WORLDWIDE devised a strategy that aims to not only attract the talent you need, but also retain them for longer periods.
This strategy relies on offering recognition on a few crucial days that mark an employee’s journey with the organization – the decision day, first day, every day, achievement day, and referral day.
A candidate’s decision day helps determine whether they can see themselves at the organization.
The answer you want, of course, is yes, and one must engage in a few activities that revolve around building the right perception to attract great talent. This means, every organisation needs a strong Employee Value Proposition (EVP) that includes talent acquisition campaigns, and new talent welcome experience (that occurs before the first day of joining). Similarly, the first day marks a crucial one in the employee’s journey – this day sets the tone for their employment with you.
Now, having understood how important feeling recognised is to an employee, managers must strive to offer recognition on a daily basis.
Whether this recognition is offered for soft-behavior based achievements like arriving at the workplace on time or offering support to other team members, or is offered for professional traits like adherence to deadlines or great work, is a factor that depends largely on the traits that your organization values. This is because, at the end of the day, each organization must build its culture based on the qualities it values. Promoting behaviors that match your culture goes a long way in establishing the same. This defines the Every Day of your EVP philosophy.
The purpose of the Achievement Day is often confused with recognition itself. This day is meant for formal rewards in the forms of raises, bonuses, and awards, and is not a substitute for the daily recognition that can help employees feel more motivated.
However, having said that, the Achievement Day does function as a form of public recognition in front of one’s peers, and leaders should not discount the same from the EVP strategy.
Finally, you’ll see the cumulative effects of continual recognition and high performance on the Referral Day. As stated earlier, 75% of an employee’s knowledge about a company is formed before they apply for the job, and a dominant portion of this knowledge comes from their peers working at the organization.
Employees who feel recognized and rewarded will always offer positive inputs about the organization they work for, along with encouraging their friends to apply. This brings us to understanding the importance of tailored rewards.
OFFERING REWARDS THAT RESONATE WITH DIFFERENT GENERATIONS OF EMPLOYEES With the millennial workforce increasingly valuing experiences over monetary benefits, it is crucial for organizations to understand that a simple cash bonus is not enough to reward and boost employee morale and performance. Offering non-cash rewards, such as the opportunity to travel, a special dinner experience, or even a movie ticket resonates far more with younger employees.
Our studies have shown that due to the fact that over 69% Millennials experience, to use a colloquial term, FOMO (the Fear of Missing Out), three out of four millennials state that they would rather be rewarded with experiences over cash benefits. Additionally,
international organisations are now looking to tap into FOMO culture to boost their employees’ motivation and performance levels. A study conducted by PWC showed that 65% of corporates are now researching non-cash rewards to offer recognition.
Our Academic Partners, on understanding that cash results in the least efficacy, and travel results in the highest efficacy, have helped craft our Global Rewards Marketplace, that offers rewards that mean something to every employee, and the results we’ve seen are phenomenal. Not only do we see a significant spike in employee engagement, but we also see a huge one in performance, with more and more people striving to receive the rewards they desire.
HOW TO MAKE RECOGNITION A DAILY PRACTICE? In most organizations, rewards are rare and occur at sporadic points in a year. However, recognition is an on-going need, and must be something offered daily. Of course, this does not mean leaders must plaster their employees with compliments daily. Instead, finding daily moments to increase motivation can be a more organic way to boost engagement. Little actions like offering an opportunity for collaboration, extending help, or giving advice in ways that sync with the value system of your organization can go a long way. Ensure that the recognition you offer is not just limited to job performance, as turnaround times can vary, making daily recognition a feat that’s hard to master.
Above all, leaders must also offer timely and honest feedback as often as possible. Rewarding or recognizing an employee for a task they undertook weeks ago will fail to resonate with them, and won’t act as a strong enough gratification for positive behavior.
WHAT TO EXPECT AFTER ESTABLISHING AN EFFECTIVE RECOGNITIONS PROGRAM? Recognition leads to employees that are more motivated to work hard, and work smart. When employees sense that they are part of a larger picture (and are, more importantly, a relevant part of the big picture), they are far more likely to offer creative solutions, and act on improving their overall performance in the workplace. As this improvement is largely born from intrinsic motivation, an employees’ heightened performance develops at a pace that is organic to that individual’s pace of work, which ultimately results in performance that does not come at the cost of decreasing one’s work-life balance or sense of personal time. As a result, the scope for dissatisfaction levels with the job also decreases phenomenally, which in turn lowers the organisation’s attrition rate.
Additionally, with studies showing that intrinsically happier employees being 33% more prone to helping out other team members, organizations can stand to benefit from a culture of teamwork and motivation, rather than only mindless competition.
Finally, engaged employees that notice their personal and professional goals aligning are less likely to leave organizations. With their goals becoming part of the organization’s growth and performance, they are less likely to want to look out for other opportunities that may or may not provide this neat mesh of ideologies. Encouraging an environment of gratitude, teamwork, flexibility, trust, and honesty can help improve productivity and engagement significantly.
EVERY ORGANISATION NEEDS A STRONG EMPLOYEE VALUE PROPOSITION THAT INCLUDES TALENT ACQUISITION CAMPAIGNS,
AND NEW TALENT WELCOME EXPERIENCE