Whatever size your workforce is, the success of your small business depends on your team being consistently motivated and performing at their best.
Rewards have always been a popular way to achieve this end and traditionally these have taken the form of an annual bonus. But this approach is now seen as somewhat outdated, with businesses now favouring strategies that will produce results all year round.
This article suggests a range of possible reward and recognition strategies, involving both monetary and non-monetary benefits, which have the potential to boost staff morale and help your business to achieve new levels of success.
Benefits of rewards and recognition
There are definite benefits for recognising and rewarding your staff members when they go over and above for your business including;
- Satisfied employees – rewarding them makes them feel valued and engaged and increases their feelings of empowerment.
- Better teamwork – recommendations from their peers can help to create a more collaborative culture, where rather than competing, team members look for the good in each other.
- Job satisfaction – knowing they’ll be rewarded for hard work encourages team members to put in that extra effort and helps to create a sense of self-worth and job satisfaction.
- Greater loyalty – trusting your team and rewarding them for their efforts builds loyalty and a workforce that’s more committed to your business.
- Higher productivity – employees who believe they will be recognised and rewarded for their efforts are likely to work harder than those who don’t.
Reward and recognition strategies
Non-financial incentives can be as good, if not better than monetary ones for motivating your team, with the best strategy being a mix of both economic and non-economic benefits.
- Base salary – this should be competitive so that you attract high quality employees.
- Short-term incentives – these are rewards for short-term goals and include sales commissions and bonuses.
- Long-term incentives – these give employees a vested interest in increasing the value of the business over time and include equity, profit sharing and stock option plans.
- Peer-to-peer programs – these incentivise, recognise and reward employees for going above and beyond and can be monetary or in the form of an award.
- Salary packaging – also known as salary sacrifice, this involves packaging an employee’s salary into income and benefits and paying for those benefits (i.e. a car or a phone) out of their pre-tax earnings.
- Time off – providing an employee with paid time off for doing a good job or achieving a particular milestone.
- Study assistance – paying for an employee’s study or training towards higher qualifications which are aligned with the interests of the business.
- Flexible working conditions – allowing employees to work from home on certain days or work hours other than nine to five.
How to develop a strategy
Developing a reward and recognition strategy that works for your business involves the following steps;
- Identifying the business goals you want the strategy to support
- Identifying the type of employee performance that will reinforce those business goals
- Determining how to measure that employee performance and the appropriate way to reward it
- Communicating the reward strategy to your employees
- Reinforcing that communication with regular updates promoting the reward strategy.
Some things to keep in mind
To ensure your reward and recognition strategy is successful and continues to produce results for you, keep these tips in mind;
- Publicise it – as well as thanking an employee personally, make sure that everyone else in the business knows about their accomplishment via email, meetings and the company newsletter.
- Make it timely – if employees have to wait till the end of the year for a reward (i.e. an annual bonus), their interest and enthusiasm is likely to wane. So design an ongoing recognition strategy that provides instant rewards and timely celebration of accomplishments.
- Offer a variety of rewards – different employees will be motivated by different types of rewards (i.e. some may appreciate a gift certificate, others a day off), so design a reward strategy that has something for everyone.
- Measure performance – to ensure your reward strategy is achieving your business goals, measure the results against a range of criteria including productivity, number of errors, customer satisfaction levels and overall company profits.
- Reward both individual and group accomplishments – make sure your reward strategy works as hard as it can by recognising both individual performance and group collaboration and teamwork.
A successful reward and recognition strategy can benefit your business in all sorts of ways. It can help you to attract quality employees, encourage them to stay with you for longer and get the best performance from them every day.
And in the long term this will translate into financial gains for your business through higher productivity, better staff morale and a culture that’s focused on achieving your company’s objectives.