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Article
Overview: As
competition for qualified employees increases and employee tenure decreases, understanding
what motivates and incentivises staff is becoming increasingly important.
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Takeouts:
- With people working longer hours and greater
pressure being placed on employees to deliver more with
less, a 'fair' wage and stable job are no longer incentive enough to retain staff.
The
main reason reward and incentive programs typically fail to deliver is because
they only offer a 'one size fits all' approach, as opposed to being flexible enough
to accommodate the differing interests, needs and passions of staff. To
be successful reward programs must align with corporate strategy, integrate with
human resource strategies and recognise the different needs and wants of various
groups within the organisation. | |
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An
employer funded party at Christmas where every staff member receives the same
gift. A packet of biscuits for working huge
overtime to ensure deadlines are met. A Sydney bridge climb or bungee jump. All
of these could be classified as a reward - if employees clearly have their heart
set on those things.
But on closer examination, it is more likely they will generate a brief and superficial
level of appreciation at best, and not the real fruit of increased loyalty and
productivity.
The
nature of business rewards is shifting. What was once a spur of the moment act
of generosity from an employer or a simple Christmas bonus scheme is now being
thought of in more strategic terms. An effective rewards program can not only
motivate staff to higher levels of achievement, but also generate deeper loyalty
- without being misconstrued as bribery. So
what are rewards? What do you reward? And how should you use rewards as a part
of your overall HR strategy? Rethinking
Rewards At
its simplest, a reward is the return given for the performance of a desired behaviour,
designed to create positive reinforcement.
While almost anything given to a staff member could potentially be a reward, it
is the positive reinforcement of behaviour that benefits the business which differentiates
rewards from things such as gifts. Ultimately,
a successful rewards program supports business performance. This requires a shift
in thinking from focusing only on the bottom line cost to the employer of offering
rewards, to calculating the impact that happy and appreciated employees have on
the top line of profit.
A successful
rewards programme requires a balanced approach that incorporates three key perspectives:
the employer, the employee and the cost. While any of these may be the initial
point of focus, they must work together to create an effective and sustainable
rewards system.
The Rewarders' Perspective For
an employer, rewards can be a big expense. So, to be successful a reward programme
must achieve three things: -
Alignment with existing top-line corporate strategy (how the company creates value);
- Integration with
human resource strategies (the behaviours, skill-sets and competencies required
by staff to sustainably create that value);
-
Segmentation of the workforce (identifying the different groupings and how they
uniquely contribute to value creation).
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you do not know what you want to reward, you conversely cannot know what you would
not reward. If an organisation is committed to differentiating itself in its employer
brand and culture, the reward strategy should reflect this differentiation. Rewarding
Virgin Blue's staff with fun and challenging reward options such as a White-water
Rafting experience as opposed to a $50 book voucher may help to more closely align
the reward program with Virgin's employment brand. Furthermore, knowing how your
workforce is classified - not just by behaviour or skills, but also by function
and demographics (e.g. salary, family status, gender, age and geography) - can
have a significant impact on how your reward strategy is developed. |  |
The results
of a survey conducted by Wirthlin Worldwide (March 1999) of 1,010 people who were
asked how they spent their last cash reward, cash incentive or cash bonus highlighted
the potentially limited impact of cash incentives. 
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importantly, data of this nature will reinforce a commitment to customising your
rewards instead of adopting a cookie cutter approach. Targeted rewards can eliminate
once and for all the potentially wasteful practice of uniform spending that only
appeals to a small percentage of recipients. The
"Rewardees" Perspective Once
you have accurate internal data regarding the demographics of your employees,
you must connect with employees to understand their perspective. Basing your reward
strategy on assumptions about what employees value, rather than fact, can result
in ineffective and costly incentives which do little to motivate staff or reward
desired behaviour. Staff
perspectives must be tested against facts and historical business results. This
will allow all parties to be better educated as to the true cost and benefits
of each reward. For example, to a stressed manager, the perceived value of a $50
professional back massage may be greater than the perceived value of a $80 gift
certificate. In applying such insight to your rewards program offering, both the
employer and the employee stand to benefit. It
is important to separate opinions from facts, so further research should be done
to quantify the importance and satisfaction of staff to each reward component
and attempt to measure how effective it is at generating employee commitment.
Once
views have been tested by qualitative (e.g. one-one interviews) and quantitative
research (e.g. statistical modelling), you have the opportunity to communicate
your reward program to staff. Any changes to existing rewards are significant,
and should not be made without a clear communications strategy to avoid staff
misperceiving your efforts as an unjust reduction to their remuneration. Counting
The Cost When
costs must be cut, employee rewards are often one of the first areas to be scrutinised.
To avoid this situation, rewards programmes should be both measurable and sustainable
over time. This means understanding the real return on investment in generating
tangible improvements to business results. Finally, all data should ideally be
externally benchmarked to validate the cost of running your reward programme and
to compare the benefits received.
Conclusion
Employer,
employee and cost perspectives are the three-legged stool on which an effective
and sustainable rewards program should sit. With accurate financial data, a clear
analysis of workforce perceptions regarding rewards and a commitment to good communication,
you will have the right foundations to develop a rewards programme that delivers
tangible benefits to both employee and employer.
References:
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About Regent Recruitment
Regent Recruitment is a recruitment consultancy that assists leading Australian
employers to attract and retain talented staff on a contract, temporary or permanent
basis. Whether we are filling one permanent role or recruiting contract staff
for a 400-seat call centre, we deliver an exceptional recruitment service.
Unlike other recruitment consultancies, Regent
Recruitment is unique in that it combines the capabilities of a large-scale multinational
recruitment operation with exceptional service levels typically only associated
with small boutique agencies.
How
can we assist you?
We would welcome the opportunity to have a confidential
meeting to discuss your staffing needs in more detail. If
you are interested, in the first instance please call Howard Mereine, General
Manager, on (03) 9909 7150 or e-mail Howard at hmereine@regentrecruitment.com.au. We
look forward to speaking with you.
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This article was licenced by Regent Recruitment for the Regent
Recruitment client newsletter.
Written by Victoria Small, and edited by Paul Quinn, Quinntessential Marketing
Consulting Pty Ltd.
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The
views and opinions expressed in this document are those of the authors and do
not necessarily reflect the view of Regent Personnel Pty Ltd.
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