July 4, 2016
Next Level Of Rewards & Recognition
What Next For Rewards & Recognition?
Employees join and stay with organisations for a broader set of reasons than what people have assumed so far. While some employees work for the organisation because of its purpose, others do so because of their managers and some others because of the work they do. Rewards & Recognition have played a supporting role along with all of the above-mentioned factors.
Many are primarily attracted to any organisation because of the bouquet of rewards they offer such as pay, health insurance, retirement plan, bonuses and career development programs.
Engaging employees today has evolved into a more sophisticated science than it used to be earlier. Companies have realized that there is a h3 linkage between business strategies, talent management implications, desired organisational culture and total Rewards & Recognition. So, how have things changed and what should one look forward to in the future?
Personalizing Rewards & Recognition:
No one company is alike. So, why would you expect the Rewards & Recognition strategy that was applied for one company to be working for another? A company that chooses to grow talent from within will have a very different pay philosophy than one which looks at hiring the best talent. Personalization has to be the name of the game, otherwise, you would risk alienating your employees by derailing their productivity.
And that has to be accompanied by freedom of choice so that employees can decide what is best for them.
Linking Rewards With EVP:
Earlier, rewards were doled out in isolation. Not anymore. Organisations are increasingly realizing the value of linking rewards with the employee value proposition. Hence, rewards and recognition are today closely related with the organisation’s mission and values, business strategy and desired organisational culture. R&R can no longer operate in a one-dimensional silo; it takes into account the long-term benefits that a h3 EVP can deliver in driving organisational transformation, according to Willis Towers Watson. While rewards are increasingly linked to talent management and performance, it will also include an individual’s contribution to culture, team leadership and broader strategy.
Career Development To Take A Fillip:
According to The Korn Ferry Hay Group Alternative Employee Rewards Study, 90% of organisations surveyed employ four or more alternative methods of rewarding employees, out of which career development programs are poised to see the biggest expansion in use during 2016 across all employee levels.
More than half of respondents indicate they intend to expand the use of career development programs across all employee levels, supporting the creation of a h3er bench of employees with the hard and soft skills needed to assume more challenging roles within organisations. A lack of career development opportunities has been cited as the number one reason why employees leave organisations, Hay Group’s global employee database reveals.
Rewarding Meaningfully & With Flexibility:
Once upon a time, companies used to reward their employees for having impeccable attendance. Then, it progressed to rewarding them for their performance. Not much attention was paid to what kind of rewards were given to employees. Today, organisations realize that it is not just important to reward employees, but also ensure that the right of rewards are being given.
They range from cash bonuses, verbal thank yous, overtime pay, experiential rewards, health & wellness benefits, vouchers etc. According to REBA-JLT Employee Benefits Shifts Research 2016, in the next five years, companies are looking to introduce more flexibility and variety to the employees. The idea is to tailor it to individuals rather than implement a company-wide strategy.
Spot Cash Bonuses To Grow:
As organisations look to align their business strategies with their Reward & Recognition programs, we will see the growth of spot cash bonuses in many organisations for functional roles, the Hay Study emphasized. According to Mercer’s 2014 Total Rewards Survey, less than one-third of companies think their total rewards and business strategies are fully aligned. The role of spot cash bonuses will be crucial in establishing the link between the company’s employee recognition program and the business objectives. The very nature of the Reward & Recognition that comes with it enables managers and peers to recognize good effort and encourage them instantly.
Repackaging R&R package constantly: It is important for companies to recognize that their talent pool is like a living organism changing constantly. Not only are they dealing with generational differences, but also demographic differences. It is in this context that they will need to tweak their R&R package constantly to ensure that it is line with their employees’ expectations and more importantly because financial rewards cannot be sustained. Take, for example, the experiential app Frogo. It allows the user to discover and book amazing experiences or activities or things to do in a particular city or destination. It essentially provides the user with the freedom of choice on the go and the ability to book it in seconds.
Increased Use Of Technology For Communication:
With the advent of mobile technology and social media-based systems, companies are envisioning a greater role of technology in the administration of Rewards and Recognition benefits and its communication to employees through web-based and mobile devices. Pundits are hoping for greater automation, more transparency, single point portal for all offerings and intuitive technology that will engage stakeholders and provide personalised attention to individuals. Earlier, most employee engagement programmes operated in silos under HR.
Now, one can get all those engagement programmes on the same technology platform making for seamless integration. These platforms like Xoxoday provide you with the flexibility to define and design Rewards & Recognition, simplify sales incentives, keep track of the fitness levels of the users, provide a referral module for recruitment and also for nominations and approvals.
Health & Wellness To Grow:
Gone are the days when a gym membership was the only thing offered to employees as a health and benefit reward. From having gyms within offices to serving healthy food at the cafeteria, companies are pulling out all stops to make sure that their employees are happy. Indeed as the 2014 Mercer’s Critical Talent Practices Survey suggests, 49% of organisations focus on healthy living and wellness to attract and retain the right talent. Besides, gym memberships companies are increasingly looking at wellness solutions such as meditation, different types of yoga, regular health check-ups and messages. We offer a range of solutions in this space across different cities. Check it out here.
International Data Corporation expects the market size for recognition solutions alone to reach $32 billion by 2016. Bersin by Deloitte State of Employee Recognition 2012 research shows that there is a $46 billion market for employee recognition and most companies spend in the range of 1-2% of payroll on this. The recognition market is ripe for picking and as more and more companies recognize the need to have a complete Rewards & Recognition system, they would do well to remember to keep in mind the different trends that will dominate the space in the coming years.
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