Is your reward system working for you or against you?

by Katie May, editor, Communication Briefings


Reward and compensation plans are designed with the best intentions. Simply put, you want to recognize hard work that delivers important results and to encourage more of the same.

Unfortunately, some reward systems set employees up to fail, by pointing them toward unattainable or unrealistic goals. Other systems discourage employees from trying, by offering inadequate or inappropriate rewards.

Perhaps most damaging of all, some reward systems encourage employees to bend the rules or to act against the organization’s stated goals. For example, if you reward employees for accident-free days, you discourage them from reporting accidents and mishaps. Likewise, if you set high individual sales targets, you could poison your workplace and damage teamwork with an unhealthy level of competitiveness.

Use this checklist to fine-tune your rewards system:

  • Explain the evaluation process clearly. Employees must be able to see that you are applying a system. Tell them what measurements you are using, including your own observations as well as specific metrics and results. Transparency eliminates any possible accusations of favoritism or unfairness.
  • Match criteria to goals. Make sure that the evaluation criteria you use support your organization’s overall goals. If your goal, for example, is to build a network of qualified contacts, do not reward employees only for making a high number of contacts. Let the measures you use show that you prefer quality over quantity.
  • Set the bar high. Distinguish between minimum requirements and exceptional effort. Although employees deserve recognition for both, only the latter deserves reward. Once employees consistently exceed base requirements, raise the bar and offer significant rewards.
  • Establish a clear timeline. Do not keep the reward or the timeline a secret. Let people know what they are working toward and how long they have to work to earn it. If you are running a short-term contest, clarify the start and end dates and deliver the rewards as close to the end date as possible. If you are running a month- or yearlong incentive program, post interim results frequently, to celebrate achievements, encourage the group and keep the reward in the front of their minds.

Bottom line: If you structure and administer them well, your organization’s reward and recognition programs will move you closer to your strategic goals. Additional benefits include the following:

  • A more positive work environment with higher morale.
  • A pattern of productive, high-results behavior.
  • A high-performing team of employees who are loyal to your organization.

Hand out employee praise

The writer Mark Twain once famously said “I can live for two months on a good compliment.” Of course, if you want your employees not only to survive but also to excel, you need to give them more than an occasional “Good job.” Compliments cost nothing and take little time yet deliver immediate payoff. Employees will work harder, faster and more effectively when they feel that you appreciate their efforts. So why do so many busy leaders forget to pass out compliments on a regular basis?

The simple answer is that when you are snowed under by a daily barrage of e-mail, reports, telephone calls and emergencies, you may feel too overwhelmed to breathe, much less to praise. But don’t let those “thank yous” slip off your to-do list.

Put down your telephone receiver, and take your hand off your computer mouse. Take the time—even two minutes each day—to offer a simple “Thank you” or “Well done” to a deserving employee or two.

Your message of praise need not be elaborate. Simply say: “You did a good job today,” and then say why: “The customer noticed the extra care you gave to his order. He sent in an e-mail saying that he’s already recommended us to several contacts. Your attention to detail will bring in additional sales.”


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