27 Dec 2018
Showing your staff you appreciate them is a good business practice. It lets them know you value their hard work. A simple thank you goes a long way to making your staff feel valued and motivated, it’ll inspire them to continue doing even more.
Why is Reward Management Important?
Compensation for good work may come in various forms. It could be money added to your employees’ salary or a paid day off or an opportunity for growth or travel within the company.
Having an effective system that compensates workers can contribute to their happiness. It also keeps them loyal to your company while at the same time making them eager to move up the internal ladder.
When creating employment contracts, as well as a section on pay & benefits, you should also include a section on the company’s rewards policy and procedures.
What is reward management?
It’s the adaptation of policies within an organisation to incentivise your staff.
You’ll decide on the value and conditions of the bonus, as well as the targets they need to meet for eligibility. You’ll also choose what bonus policy you want to introduce and will have that for every employee (regardless of what they want).
But you can meet with staff members to decide their targets and discuss what they have to do to meet the bonus policy.
Organisations investing in performance-based rewards management are doing so to serve as positive reinforcement for staff members as well as to improve morale.
Types of rewards in the workplace
Compensation for your employees can come in different shapes and sizes. They’re either:
It can be an acknowledgement in the company newsletter or a bonus at the end of the month. It could be a promotion or an exclusive parking spot. Whatever you decide upon, it needs to be fair and consistent among all employees.
What are performance-based rewards?
As the name suggests, the ability of individual staff members is the basis for this type of compensation.
You hold a performance appraisal where you review an employee's work and conduct in the office over a period of time.
What are membership-based rewards?
Irrespective of individual efforts, staff members may receive a bonus based on the performance of the whole company.
Employee performance and compensation
Compensation of any kind plays a huge role in motivating your staff. As with most people, we’re more willing to undertake a task when there’s a possibility of a prize after.
Following successful appraisals, you may want to offer benefits based on the organisation or on an individual employee's performance.
Examples of performance-based reward
- Pay: As an employer, you may review and increase a staff member’s salary based on their abilities and achievements. All information on the salary review process should be available in your employee handbook.
- Bonuses: Creating a company bonus system allows you to issue out bonuses fairly among all staff members.
- Events: Offer training opportunities or social occasions for your workforce to enjoy.
- Promotion: Offer promotions to staff that have gone above and beyond. Promoting from within motivates other staff members as it shows that there are career opportunities for them as well.
Advantages of reward management
- Increased employee productivity: Your staff is likely to be more engaged, motivated and productive. When you acknowledge good work, they also have the incentive to work harder still.
- Loyalty: It can be difficult to instil loyalty in your employees. Offering bonuses and other prizes as a way of recognising their accomplishments not only builds trust, it also increases engagement with the business.
- Job satisfaction: Staff members feel more satisfaction in their job when they know it contributes to the success of your organisation. Recognising their efforts after major projects makes them feel valued.
- Increased retention rates: Investing in a rewards programme for your employees also allows for a low rate of staff turnover. A high turnover of staff can lead to poor morale, which in turn may lead to them looking for alternative employment.
Need help with reward management?
Get in touch with us today for guidance with reward management for your business: 01455 858 132.
Free to Download Employer Resources
Do you have any questions?
Get a free callback from one of our regional experts today