Rewarding is a corporate strategy employed by organizations to celebrate the remarkable achievements of employees. In a fierce global competition, business owners must stay afloat by ensuring that employee participation and work morale is maintained to healthy standards. For this many successful companies use a system called the strategic reward system.
Strategic Reward System
A strategic reward system uses techniques and practices to support the company’s performance by acknowledging all aspects of work involving employees. The objectives of a reward system is to value, reward, and boost skill, effort, dedication, and performances of employees. Company and business managers should know how to measure and assess employee performances so that they can suitably reward them using the following aspects of a reward system:
Compensation
Compensating or providing commissions to employees is usually in the form of cash, which is usually a fixed percentage. This is given to employees in exchange for completing a number of tasks allocated to them on a daily or weekly basis. Compensation is a non-wage financial boon granted to employees in addition to their wages or salaries.
Benefits
Benefits are basically incentives that are permanent (they may be subject to change depending on the company’s policies). Benefits are in the form of paid leave, vacation days, health insurance, dental and vision insurance, etc. Companies use these perks to provide economic and health security to staff members in exchange for a permanent/long term employee retention.
Appreciation
Appreciation is a display of gratitude to employees for their actions. Expressing appreciation to people doesn’t take much effort and is usually done in the simplest ways. A boss or manager can send personal notes, emails or even make a phone call citing specific examples of the employee’s work that has helped acquire a positive outcome for the company.
For example, nothing sums up the congratulatory sentiment “you are the employee of the year” more than glass awards that have the employee’s name beautifully engraved on it. Companies like Edco, that pioneer in creating beautiful awards and trophies, help make these moments forever symbolic for people.
Companies that neglect the system of rewarding fail to attract and retain workers. Moreover, this results in employees showing poor work morale that eventually affects the company’s overall performance. It is natural for hard-working employees to want to know whether they’re performing well or below par. This gives them a sense of achievement and also pinpoints the areas they need improvement in.
Recognition
Recognition means to formally acknowledge employees for their specific accomplishments. This can be demonstrated by awarding an award, plaque, certification, or a trophy with the employee’s name on it. Recognition can apply to all areas of performance and demonstration, including tangible (number of projects/tasks completed) and intangible (behaviors and skills) merits.
What Areas to Reward?
The reward incentives should correspond adequately to the roles and specific performances of employees. For example, if an employee has managed to save significantly on a company’s variable costs, this would necessitate a formal recognition along with a bonus. Whereas, an employee who has never taken a day off should be awarded a certification that shows appreciation for his punctuality. The main idea is to make employees feel appreciated and have them consistently perform well.
How Does Rewarding Work?
Rewarding essentially drives employees to perform up to the mark. Rewarding even in its non-benefit form provides workers with a motivational strength to continue improving themselves. Psychologically, it gets employees more and more involved, even to the point they start sharing concerns regarding their company’s growth and expansion.
By rewarding performances that directly correlate with the company’s growth, you set up criteria that more and more employees automatically seek to follow. This way, workers are given clarity regarding what goals to accomplish and how.
Instead of creating a highly competitive environment at work, create an environment that promotes teamwork so that no employee working hard is made to feel like a loser. An inclusive environment allows employees to integrate better. When they share ideas and concerns with one another, they can come up with better solutions and strategies.
Ultimately, an encouraging work environment leads to gaining employee loyalty and satisfaction. Nothing translates better into employee retention than these two important values. Whether your business is a web development agency that creates e-commerce solutions for third-parties, or a brick and mortar store that manages customers face to face, the basic rules of resisting competition and emerging successfully are the same for both, and it can start with motivated and content employees.
By Jamie Roberts