As a chief human resources officer, you know that your rewards program is a key part of your employees’ compensation packages. It’s possibly one of the reasons people choose to work for your company in the first place.
But it is also a powerful tool to keep employees engaged and productive. So, to what extent are you making sure your rewards program is a win-win for everyone?
Below, we look at three ways you can collaborate with employees to create a rewards program that benefits everyone.
How Rewards Lead to More Effective Organizations
When CHROs collaborate with employees, investing time and resources into building rewards programs, their companies benefit in a multitude of ways:
- Retention. It makes it that much easier to attract and retain top-tier talent. Research by Blackhawk Network finds that employee incentives are one of the most effective ways of retaining younger workers who “see incentives as a necessary component of their employee compensation.” A further study also found rewards increase employee loyalty by 84 percent.
- Motivation. It’s long been known that “workplace recognition motivates, provides a sense of accomplishment and makes employees feel valued for their work,” write Annamarie Mann and Nate Dvorak, both formerly at Gallup. “Recognition not only boosts individual employee engagement, but it also has been found to increase productivity and loyalty to the company, leading to higher retention.”
- Productivity. Boosts in productivity and output occur when a solid employee recognition program is in place, say Deloitte’s Valarie Daunt and Vicky Menzies. Company research finds that engagement, productivity and performance are 14 percent higher in organizations that recognize employees compared to those that don’t. What’s more, a 15 percent improvement in employee engagement can generate a 2 percent increase in margins.
3 Ways to Improve Rewards Programs Through Collaboration
When chief human resources officers collaborate with employees, the value that your rewards program delivers is maximized. Here are three strategies HR teams can implement immediately.
Adopt Employee Feedback
Requesting feedback allows HR executives to understand employee satisfaction and sentiment, says Jonathan Best, account director at uFlexReward. “Building an agile mindset in reward provision is the bedrock of effective reward investment and employee satisfaction, as it can result in spotting opportunities towards which spend can be reallocated,” he writes.
There are questions you can ask employees to gauge their satisfaction with rewards offered by your company. The team at Paydata provides several examples, including:
- Do you feel that staff are recognized when going above and beyond?
- What type of recognition do you value most?
- Do you have any recommendations on how the business can recognize hard-working employees more effectively?
What’s beneficial about feedback is that requesting and adopting it is a form of recognition itself. Employees feel valued when their insights are acknowledged and implemented, says HR Morning’s Michele McGovern. You can seek feedback in any number of ways, but what’s most important is to react to it.
Offer Personalized Rewards
Another way to improve employee appreciation through collaboration is by personalizing the rewards program, says Meghan Stettler, director at the O.C. Tanner Institute.
Research by the recognition company shows that 70 percent of employees believe recognition is most meaningful when it’s personalized. But only half of employees believe managers understand how they prefer to be recognized and one-third say the way they are currently recognized actually makes them uncomfortable.
Personalization is powerful because it increases the likelihood that rewards are evaluated and consumed, says Jordan Birnbaum, who was VP and chief behavioral economist at TalentX for over five years and is now building his own software solution. When you first start personalizing benefits, data is a powerful tool, he adds. Demographics, for example, suggest which benefits employees might prefer. But don’t limit options unnecessarily, he warns.
You can also allow employees to personalize rewards by offering voluntary benefits, says Neil Vaswani, cofounder and CEO of Corestream. “Through my extensive experience in the space, I’ve seen that these voluntary benefits — or elective add-ons that businesses offer their employees to complement traditional offerings, such as supplemental health benefits, employee discounts and auto insurance — can be valuable when it comes to enhancing an employee’s life and maintaining their engagement,” he writes. He points to a 2018 survey by his company, which found 70 percent of employees wanted more voluntary benefits.
It’s important companies understand that the impact of personalizing rewards compounds. The more you personalize rewards, the more effective you will be at personalizing them in the future, says Marilyn Tyfting, SVP and chief corporate officer at TELUS International. “As employee data and advanced analytics become more prominent, you can use the information to move toward further individualization, while monitoring the success of your recognition program.”
Make Rewards Peer-Led
Making employee rewards peer-led is a final way to collaborate with employees and increase the benefits that employee recognition brings.
“Employees that are most satisfied with their organization’s employee recognition programmes are those that are not only aware of how to recognise people, but also who can do the recognising,” writes the team at experience management software provider Qualtrics XM. “Your people might not know they can recognise their peers for their good work. Encourage them to recognise their peers via the same channels leaders do.”
Peer-led rewards offer greater pleasure and more chance that a culture of recognition will spread throughout your company, says executive coach Gene Hammett, cofounder of Core Elevation. “Peer-to-peer recognition provides a powerful way to reward others and create the culture you want.”
If you want to improve peer-led rewards, technology is the answer, he adds. “One easy way to expand your recognition strategies is through technology that allows peer-to-peer capabilities. Imagine the power of having Jack express gratitude to Susan for helping out on a project using a technology that displays it to everyone.”
Empowering employees to recognize their peers publicly also helps you cement your company values, according to an article at REBA, the Reward and Employee Benefits Association, especially when employees can nominate each other for displaying those values.
“Not only does this actively encourage employees to live the values in their day-to-day roles, it also inspires them to seek out occasions where the values are being displayed by colleagues too. As a result, employees are far more aware of the behavioral expectations set out by their business and more in tune with their purpose.”
Listen to Your Team and Boost Your Organization
Rewards and recognition programs shouldn’t be a one-way street. To really maximize the benefits and create a program that drives significant value to both your company and your employees, CHROs need to collaborate with employees. Solicit and adopt their feedback, personalize rewards to their preferences, and give them the power to recognize others.