How_to_Effectively_Reward_Employees

An effective recognition and reward program does not have to cost a fortune, and it can be one of the most lucrative investments a company makes. On a daily basis, school-age children earn gold stars in classrooms, and top varsity sports players earn trophies. Unfortunately, many employers think of gold stars and trophies as kid stuff, and they believe adults in the working word can only be motivated by money. This hypothesis is invalid. Companies that believe money is an employee's sole motivation for working are destined to lose some of their best people. The only strategic weapon a company has that cannot be copied by the competition is its people; this is why it is important to nurture them. Motivation in the workplace is becoming increasingly important, because the corporate world is demanding higher levels of performance from employees. In an effort to increase employee productivity, managers are implementing total quality management, which incorporates continuous improvement and employee empowerment. The need for improved employee performance is also evident in the corporate downsizing trend, which results in flatter management structures. Today many companies want to engender employee recognition. A recognition program alone is unlikely to work with a disgruntled or unmotivated work force. To be effective, a recognition program must be part of a whole culture of valuing employees. Many organizations have discovered low employee morale translates into reduced productivity, absenteeism, and a high turnover rate. In short, unmotivated people can affect a company's profitability. Motivational techniques * Raises and merit bonuses - Many managers consider raises and merit bonuses great motivators. In his book, 1001 Ways to Reward Employees, Bob Nelson reports 95 percent of American workers consider a cash bonus an incentive. But extra cash is often used to pay bills, and the reward is quickly forgotten. The most effective morale booster is praise for a job well done. Regularly recognizing and rewarding employees can be one of the easiest ways to keep them satisfied and productive. For many individuals, feelings of self-worth are directly associated to their work. In order to feel good about their jobs and themselves, they need the positive reinforcement of recognition from either peers or management. Many organizations have discovered their recognition and reward systems are out of touch with what they want to achieve. They are reassessing and revising their recognition and reward programs so employees will focus on performance goals. Merchandise credit - At one time, money was considered the best employee motivation technique. But today, the use of money as motivation has several strikes against it. For example, the impact of a monetary reward is often short-lived. Noncash rewards of high intrinsic recognition value - such as merchandise credits or time off - often work better. When given a cash incentive, an employee may spend the money on groceries or the electric bill. If merchandise is offered, however, employees will constantly be reminded of the incentive each time they look at the gift. Anheuser-Busch, a beer manufacturer in the United States, provides merchandise to its employees every month. The manufacturer allows employees to take home two cases of beer per month at no cost. Many companies find giving merchandise to employees is a very effective form of recognition, especially if they can choose the reward. The secret of making a reward effective is tailoring it to the individual: A reward to one person may be a form of punishment to another. Many organizations allow employees to select their own rewards from catalogs. Managers often assume their top performers are self-motivated. They fail to nurture that motivation until performance slips or the employee finds another job. People like to feel appreciated, and they work harder when their efforts are noticed and commended. In Livermore, California, the Lawrence Livermore National Laboratory sponsors more than 100 clubs for employees. Employees join clubs ranging from karate to chess, and meet after work in company facilities. * Competition - Some organizations feel competition among employees provides an opportunity for increased motivation. But competition creates winners and losers. When operating at its maximum potential, special recognition has only winners. In order to motivate poor performers, it's crucial to recognize small improvements and positive changes - even if outcomes aren't yet up to par. When a manager uses recognition and rewards to motivate an employee - whether a fast tracker or an underachiever - the goal is to reinforce successful behaviors so the employee will repeat them and apply the same determination to other tasks. Competition is a part of every American's education. The conflicts of the Friday night football game or the Saturday afternoon soccer game are carried into the office and onto the industrial floor. Many managers still view competition among employees as an effective motivational force. But internal cooperation, rather than competition, is the better motivational technique. Many companies recognize team efforts rather than individual efforts. * Spontaneous recognition and rewards - Spontaneous rewards acknowledge exceptional performance when it occurs. These informal rewards and various forms of recognition require minimal planning and effort; many highly effective rewards cost nothing. The most powerful motivator for an employee is personal, instant recognition from a supervisor. When organizations allow weeks or months to pass before giving rewards, employees receive little motivation to repeat their actions. A sincere word of thanks from the right person at the right time can mean more to an employee than a raise. The power of this reward is knowing someone took time to notice the achievement, find the employee responsible, and personally deliver timely praise. One of the biggest myths surrounding employee recognition and reward programs is that only high-priced trips or lavish gifts effectively communicate gratitude. When it comes to recognizing and expressing thanks for an employee's accomplishments, it is the act itself that counts. Price Pritchett and Ron Pound talk about the positive impact of soft currency or psychological paychecks. They mention words of encouragement, notes of appreciation - even sharing a cup of coffee - as effective employee rewards. Creating a supportive work environment provides an intrinsic value that money can never touch. Plaques and certificates still play an important role in award programs, serving as reminders of a specific achievement or event. Praising accomplishments provides psychological rewards that are critical to satisfaction in any work environment. To be effective, a reward program should provide spontaneous recognition and be directly related to job performance. When praise is given, specific information about what the employee has done to merit it should be mentioned. Organizations can provide innovative recognition in an infinite number of ways. Today's employees have high expectations of what work can and should be, and they want to receive rewards that reflect their personal efforts and contributions. Recognition and reward programs help motivate employees by recognizing their valuable contributions to the organization. By personalizing rewards, an organization communicates the extent to which it values and cares for its employees. Rather than distributing generic items, organizations should devote time and effort to determine what employees perceive as a unique reward. For employee birthdays, Mary Kay Cosmetics in Dallas, Texas, sends a birthday card and either a coupon for a free lunch or movie tickets for two. After five years with Mary Kay Cosmetics, employees receive a U.S. savings bond. Computer Associates International, based in Islandia, New York, provides free breakfast every day to employees. * Employee involvement - When a formal or informal employee recognition and reward program is launched, all employees should receive information outlining the program at the same time. A kickoff event can generate excitement and enthusiasm. An effective recognition and reward program delivers a variety of group and individual incentives designed specifically for the organization. More and more companies let their employees develop their own reward programs. Ben and Jerry's Ice Cream has an employee committee that reviews co-workers' ideas to make the workplace a better environment. The committee also creates employee contests and social events. Inflexible reward systems that don't acknowledge individual differences are ineffective in hundreds of companies. Knowing employees well enough to reward them appropriately is critical. Employers waste thousands of dollars on incentive programs that workers don't plan or want. An effective, structured reward program is planned in advance and operates according to established guidelines. Conclusion Many organizations have learned the main problem with cash incentives is employees often use the money to pay bills. In addition, employees tend to quickly forget the excitement surrounding a monetary reward. Cash rewards cost more and offer less leverage. Recognition is an honor money can't buy. It is important to remember that developing and implementing a meaningful, cost-effective reward system is one of the crucial challenges facing organizations today. Reward programs are pivotal in developing a unified, strategic approach to organizational motivation. When handled poorly, reward programs frustrate employees and drain organizational resources. When employees feel they are not being rewarded as they deserve, motivation may suffer, leading to resentment and low morale. Celebrating employee achievements reinforces contentment at work, elicits better performance, and keeps workers focused on job duties. With today's competitive global economy, organizations are desperately searching for ways to foster employee loyalty and commitment to quality work. Employees respond to praise by working harder and increasing their contributions to the organization. But individuals who work hard and feel unappreciated will likely cut back on their efforts. Unmotivated employees are likely to meet only minimum performance standards. Since recognition inspires loyalty and commitment, as well as encouraging better standards of service, an organization can benefit by incorporating an employee recognition and reward program. When an organization chooses to transform its existing recognition program, it requires a fresh perspective. The easiest way to improve morale, productivity, and work quality is to effectively recognize and reward employees. Praise or a personal note acknowledging achievements are small gestures that are extremely important to employees. Because delay discounts any reward, recognition should occur promptly for the desired impact. There are numerous reasons to give recognition awards: a job well done, a birthday, a service anniversary, a special favor, completing an unpleasant task, and saving the company time or money. For further reading Ash, M.K., Mary Kay on People Management, Warner Books Inc., 1984. Barrier, M., "Improving Worker Performance," Nation's Business (online), http://www.elibrary.com, 1996. Deeprose, D., How to Recognize and Reward Employees, AMACOM, 1994. Gellerman, S.W., Motivation in the Real World, Dutton, 1992. Half, R., Finding, Hiring, and Keeping the Best Employees, John Wiley and Sons Inc., 1993. Nelson, B., "Asset Appreciation Produces Best Returns," CMA Magazine (online), http://www.elibrary.com, 1996. Nelson, B., 1001 Ways to Reward Employees, Workman Publishing Company Inc., 1994. Pope, B.A., Workforce Management: How Today's Companies are Meeting Business and Employee Needs, Business One Irwin, 1992. Pritchett, P., and R. Pound, Team Reconstruction, 1996. Shani, A.B., and J.B. Lau, Behavior in Organizations, 6th ed., 1996. Stoner, J., Management, 2nd ed., Prentice-Hall, 1982. Spitzer, D.R., "Power Rewards: Rewards That Really Motivate," Management Review (online), http://sbweb2.med.iacnet.com, 1996. Thomson, R., Managing People, Butterworth-Heinemann Ltd., 1993. Van Dersal, W.R., The Successful Supervisor in Government and Business, Harper and Row Publishers Inc., 1974. Wilson, T.B., Innovative Reward Systems for the Changing Workplace, McGrawHill Inc., 1995. Kimberly Darling is director of continuing education at Petit Jean College in Morrilton, Arkansas. Joseph Arn is a professor of applied academic technologies at the University of Central Arkansas in Conway, Arkansas. Rebecca Gatlin is an assistant professor of marketing/management at the University of Central Arkansas.