Making a best in class reward programme
Almost 90 percent of companies now use recognition programs according to a Towers Watson Global Workforce Study – and it seems making a best in class reward programme is a top priority for many businesses. Rightly so, when Ceridian’s 2016 Pulse of Talent survey found that 57 percent of employees feel that recognition programs influence corporate culture. Plus, recognition programs have a very real, tangible effect on engagement and the bottom line. Research shows that a five percent increase in employee engagement can boost the following year’s revenue by three percent (WorldatWork 2015 Trends in Employee Recognition Survey.)
“Best-in-class organizations understand the power of an effective recognition program. Rewarding employees may feel not feel like a strategic business initiative but today’s appreciation efforts can have a big impact on tomorrow’s business success,” said Deb LaMere, vice president of HR strategy & employee engagement at Ceridian.
So how can you start making a best in class reward programme in your organsiation?
Align your rewards program to company strategy and values
When it comes to a best in class reward programme or strategy, it’s key that you meet with key stakeholders to understand the expectations of the business. Take the time to identify the people, groups, sponsors, partners or resources that will be affected by the project or change. Include any roadblocks to a successful outcome. Stakeholder mapping and analysis is a great way to assess each stakeholder and the impact they will have on your project. Stakeholder analysis also has the goal of developing co-operation between the stakeholder and the project team, assuring successful outcomes for the project.
Hydra advises the following steps: “Frequent targeted communications help the head to understand, intellectually, why the change is necessary and what the benefits will be. Next, stakeholders come to believe in their hearts that the change is the right thing to do for the company and themselves personally. If they can see how the change will benefit themselves they are more likely to accept the change. Finally, the hands must become competent through training and practice to bring the change to fruition.”
Choose rewards that are relevant to today’s workforce
As a reward manager, you might sit in a comfortable bracket and benefit from some more flexible working, a great holiday package and an incentive focused on jetting off somewhere tropical. But what’s the demographic of your workplace?
You may already know the stats around retention – and that demographic change will have a profound effect on the UK labour market over the next two decades and beyond. Over 30% of people in employment in the UK are over the age of 50, and there are unlikely to be enough younger people entering the labour market to replace this group when they leave the workforce, taking their skills and experience with them.
What about gender? This too needs recognition.
According to P&MM Employee Recognition Analysis, women give and receive more recognition, while men are more likely to give recognition in the form of a higher monetary value. How can this affect you if you are planning on making a best in class reward programme? Simply, men become more engaged when there is a monetary reward involved whereas women tend to be better at just saying thank you. The analysis pointed out that there was a ‘pay gap’ in the recognition schemes with more men being recognized with monetary awards rather than a thank you gesture. And this is echoed in the way in which men are more likely to offer a high value monetary award to their team.
More than 74% of all recognition received by men has a monetary value, compared to 64% of women. About 64% of high-level awards were sent by men, while 72% were recognized by colleagues vs 57% by men.
An Employee Recognition Survey by the American Psychological Association (APA) in 2014 showed that while recognition on the job was equally important to men and women (87%), men were more likely than women to report being satisfied with their employer’s recognition practices (54% vs. 46%). Even as both men and women reported the same levels of job satisfaction, men cited slightly higher levels of motivation, feeling valued by their employer and working harder because of the recognition they receive. About 52% of men believe that recognition is provided fairly in the organisation as opposed to 42% of women. About 56% of men say their supervisor provides recognition effectively compared with only 47% of women echoing the same sentiments.
Really take a look at your proposed reward strategy and toothcomb it for relevance with your workforce of today, and tomorrow.
As a reward manager looking on making a best in class reward programme, you may move between sectors easily, but the focus on innovation and agility you used in your last business may not be a great fit for your new sector where customer service and excellent customer experience is the key part of the puzzle. Take the time to seek out reward case studies in your space. The hard part of rewards can be the ongoing maintenance, development and review of global reward, benefits and recognition programmes and salary grading frameworks associated. Sometimes, the launch can feel like a real thorn in your side, but to ensure a best in class service is provided to the business and talent can be attracted and retained to achieve business goals, you need to get a strict launch plan in place and ensure that all aspects of your program are really transparent. That means set in place award criteria, how nominations are collected and evaluated, selection rules and so on. The program needs to be viewed as fair for employees to want to participate.
Measure your program’s impact.
Around a fifth of UK companies have a specific review group to audit their reward arrangements, and far more carry out periodic reviews of their reward arrangements. This might involve an in‐depth exercise or a regular assessment of existing rewards and changes. An effectiveness review generally involves:
• Gathering information on existing practices
• Making assessments of the effectiveness of the various reward practices
• Agreeing on key reward issues to address
• Considering possible options to improve the delivery of the reward goals
• Agreeing on the optimum improvements and planning their implementation
When it comes to your own goals and measurements for making a best in class reward programme, you’ll have these in place pre kick off, but you might want to look at Retention Rate. For this, you would measure the difference in employee retention between programme members and non-programme members, or you might also look at the Net Promoter Score to discover the degree at which customers would recommend your company to others based on a scale from one to ten. (The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. Scores can range from -100 to +100, and any positive score is considered good. You’ll need to partner with an outside survey firm, or run a customer survey in-house, to track this number.)