Everyone likes to get a pat on the back for a job well done—especially if that pat includes some type of bonus or other financial compensation or recognition before colleagues. Businesses often face the dilemma of wanting to recognize employees' efforts and performance, but during difficult financial times they may have very limited budgetary resources to do so. However, rewarding employees and motivating performance does not always require a tremendous outlay of money. You may be surprised to learn that if you were to ask some of your employees they may actually prefer other types of recognition.
Starting an employee rewards and recognition program can be overwhelming at first. And the task can seem impossible when you are trying to figure out how to incentivize employees to perform well while staying within a tight budget. In tough economic times, however, small and mid-sized businesses must keep in focus what they want to reward while being creative in coming up with ways to keep the troops happy.
"The goal of any rewards program should be to engender the loyalty and team spirit and have a good workplace where people feel appreciated," says Nancy M. Cooper, chair of the labor and employment group of Garvey Schubert Barer, a law firm based in Portland, Ore. "It's also likely to help you meet business goals especially with small to mid-sized employers."
The following article will discuss how to determine what you want to reward, different types of rewards and recognition, and pitfalls to avoid.
Rewarding Employees on a Budget: Your Goals
Your purpose in creating an employee rewards program may be to create some acknowledgment and motivation for your company team. The purpose behind a recognition program is to help motivate your employees to earn the rewards and ultimately help you meet business goals. Here are steps you can take to design an effective employee rewards program:
Rewarding Employees on a Budget: Types of Rewards
There's an old saying in business that money speaks louder than words. Hence the traditional practice in business of rewarding exemplary employee behavior with bonuses, raises, stock options and other types of financial remuneration. But money is not the only way to recognize employees and surveys have found that some workers actually prefer a more personal "thank you" note, being singled out in front of colleagues, or other forms of recognition.
During a recession or prolonged economic downturn, however, financial rewards may be highly prized by your staff. "Given the current downturn, I can't tell every company that money won't help," says Cindy Ventrice, author of Make Their Day! Employee Recognition That Works (Berrett-Koehler Publishers 2009). "In many cases, employees are being under paid or have experienced furloughs or cut backs in pay."
However, when people feel that they are being fairly compensated, then the best rewards for performance or behavior don't line your pocketbook or wallet. "The recognition that sticks with people doesn't have much to do with money," Ventrice says.
People like recognition. People enjoy being thanked for their work. In fiscally tough times, financial rewards are not always feasible. "A lot of the employers I work with say, 'We are afraid we're going to lose people if we can't give people the raises or the bonuses,'" Cooper says. "But they are finding ways to make their employees more loyal than ever. Employers have to be more creative about how they go about recognizing the good work." There a number of ways this can be done, with little or no financial investment. Some types of ideas include:
Employee rewards that commemorate years of service or milestones tend not to work. "They get handled badly in so many organizations," Ventrice says. "HR is typically responsible for sending out the plaque. It goes out three months to three years late. It goes through an interoffice envelop instead of being presented by a manager." It's a sign that no one really cares, Ventrice says.
The most important thing to remember about a recognition and reward program is that you are trying to build a team environment, stimulate employee interest, and create positive behaviors, Cooper says. "This doesn't always take a lot of money," she adds. "It does take some creativity, some listening and the ability to say thank you to those who do the work, provide excellent customer service and make your company the valuable asset that it is."
Rewarding Employees on a Budget: Pitfalls to Avoid
There are both legal and moral minefields to try to avoid when starting an employee rewards program. You need to really think this through, understand your motivation, and communicate to managers how to distribute rewards so that every employee has an equal chance.
"It is important to be consistent in how the rewards and recognition are handled," Cooper says. "Be sure you train your managers to not give the award to the same person time after time. Develop guidelines that outline how often rewards or perks are given out, and the value of them. Be sure that the system does not just turn into a popularity contest." Here are some of the do's and don'ts when starting an employee rewards program:
Employee rewards don't only have to single out the individual either, Ventrice says. You can set team goals for certain groups or the entire company and when you achieve those have some type of celebration. "I know some manufacturing companies that set goals and called everyone out to the front lawn and made the announcement that they had met the goal," Ventrice says. "They had a big pizza delivery and everyone celebrated. It doesn't have to be anything big or anything that they know is coming. It's about putting fun and excitement into meeting the types of challenges we need to meet to be successful in the current economy."
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