Rewards and incentives are effective tools to drive employee performance and engagement. The simple principle behind incentives — a satisfied employee is more likely to be results-oriented. Studies confirm this, showing that happy employees are 12% more productive.
To be successful, reward programs should be transparent with clear milestones. Employees need to be strategically incented to drive true results. The following is a blueprint to make sure your rewards and incentives program yields a high ROI.
Break Out of The Mold
Does your company give out basic year-end bonuses? While extra cash around the holidays may always be welcome, it’s not incentivizing anyone. Traditional cash bonuses can lead to entitlement among employees, as they are expected each year and not tied to measurable actions. Even if cash bonuses are tied to results, according to Willis Towers Watson research, only 20% of employers in North America say merit pay is effective at driving higher levels of individual performance.
It’s time to break the habit! Instead, focus on smaller rewards and incentives throughout the year. By instituting a year-round rewards program, you can drive productivity and engagement.
Recognition and Incentives Are Not One and the Same
This is an important distinction to make when you’re focused on incentivizing employees — recognition and rewards are not created equal. Both practices are essential, but they should not be confused as one in the same.
That’s not to say you shouldn’t focus on positive feedback with employees. In fact, 40 percent of employees recently surveyed by Globoforce say they weren’t recognized at all over the past year. Recognition should be given, but not be factored in as an aspect of your rewards and incentives programs.
Have a Clear Mission
First things first, if your staff doesn’t understand your organization or team’s overall goals, incentivizing them is useless. Ask your team members — Do you understand our company’s vision? Do you know your specific objectives and goals? Even if they have an idea, it’s always smart to brush up on goals before starting or revamping your rewards program.
Start from the top, delineate your corporate mission, move on to specific department’s objectives. Finish with the team and individual goals. By outlining the company’s mission and how that trickles down to each individual employee, your staff will understand the impact of their work. If your team feels aligned with your corporate vision, you’ll be ahead of the game as recent reports show that only 40% of millennials feel strongly connected to their company's mission.
Align Your Strategy to Goals
Once you’ve outlined your goals, it’s time to align your rewards program to your overall objectives. Rewards and incentives need to strategically interests employees to achieve better results in conjunction with your team goals. We’ll use a product sales environment for a couple of examples.
- If product knowledge is required to increase sales, your salespeople need to be product experts in their space. Run contests or quizzes on product information with smaller incentives to ensure your team is staying up-to-date and knowledgeable.
- If you want to increase overall sales volume, consider a tiered reward program, where incentives grow as higher milestones are met.
Both of these reward structures work to accomplish a specific goal and incentivizes desired behavior for employees.
Make Sure Your Rewards Program is Straight Forward
Rewards programs can become complex in large office ecosystems. You’ll waste time and effort if employees don’t understand the structure. Avoid ambiguity, make sure milestones are clear and concise. Once implemented, check in with employees to ensure they understand the process of the program and how to achieve rewards. Once employees reach their incentives, get feedback on their experiences.
If you use an automated rewards program, such as XOXOday’s platform, not only will you avoid the manual headache of managing incentives, you’ll gain valuable data on the performance of your rewards program. Analytics and dashboards will give you real-time results on how employees are interacting with the program, and measure effectiveness.
Celebrate your team’s success!
Yes, rewards will incent your employees, but the acknowledgment of success can also boost morale and create a competitive (but fun) environment. Once your rewards program is in place, and employees start collecting—celebrate the wins. Announce successes and promote achievements organization-wide. You can even use it as a call-to-arms for other team members to step up their game.
Reward programs are challenging for HR and leadership teams to implement and manage. On top of that, employees work hard to hit their targets and achieve rewards. Put those efforts on blast to your company!
Lastly, make sure to view your incentives and rewards program as an investment, not an expense. You’re investing in your employee’s continued success and helping them to reach their goals.
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