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Why & How to Implement Employee Reward & Recognition Programs

by Bill Collier

Are employee retention, morale and job performance important to your organization?

Obviously, that question is asked tongue-in-cheek. These things are vitally important to every organization.

Now, here's a serious question: Does your company have any sort of formal employee reward and recognition program ... for such things as individual years of service or performance excellence? ("Performance excellence", by the way, may refer to either individual or organizational performance.) If not, you may be missing the boat.

Harvard Business Review reported that the use of rewards was the single highest predictor of organizational results.

A recent study conducted by the Gallup organization found that employee recognition was one of the 12 key dimensions of great workplaces.

Fortune magazine recently featured the "100 Best Companies to work for in America," based on data collected by Hewitt Associates. According to Hewitt, "the 100 Best are all leaders in their own right when it comes to employee recognition."

Every day, your people throw their hearts into their work. They want to succeed. They want their work to be appreciated and their efforts to be recognized. When we remember to take care of this need for recognition and appreciation, we take strides toward creating the kind of energized workplace we need to succeed in today's business world.

It is so easy to get caught up in the daily struggle that you never stop to recognize the good work you and your employees do. Recognizing your people will pay off in the form of retention, morale, and job performance ... all of which positively impact your bottom line.

If you recognize the good things employees do, then you will find yourself spending a lot less time worrying about the bad things they do. They will do less of the negative, and they will strive to do more of the positive things you are recognizing. It is far easier to lead people to improved performances by thanking them when they do it right than by giving them grief when they do it wrong.

Looking at it another way: You'll get more of the behavior you reward. It's human nature.

There are important milestones and accomplishments in the life of your business. Stop and take a moment to celebrate. Annual service anniversaries. Birthdays. The company hits a new all-time revenue goal. An employee or department achieves a new productivity level. Quality is up. A customer tells you about a great job done by an employee. An employee finds a new vendor and saves a bunch of money. A year-end or holiday thank you for a great year.

Be sure to single out your high performers for recognition. Some of your recognition budget, however small, should go toward spotlighting role model performance and role model employees. It inspires your people and gives everyone a clearer idea of what you want them to shoot for.

So, how do you get started? It can be as simple as deciding to hand out a plaque for every 5 year employment anniversary, or it can be as detailed and involved as you want it to be. Here is a process that can be modified for your particular situation:

  1. Get top management's full support. Then establish a planning team. 
  2. Determine the context for recognition:
    -Why a recognition program is needed (purpose, goals)
    -What needs to be recognized (achievement, service, company financial results)
    -How much is available to spend on the program
  3. Get input from potential recipients on their recognition preferences (gifts, plaques, cash, etc.)
  4. Research resources. (If you're giving gifts or something other than money, you'll need a source for the rewards.)
  5. Decide on recognition strategies:
    - Who hands out the recognition?
    - What criteria will be used to determine who is eligible to receive the rewards?
    - When or how often the recognition will occur?
    - How the recognition will be accomplished (private or public, formal or informal)?
  6. Document everything for future reference: research findings, decisions made and the program's design details. Good documentation ensures consistency and fairness, plus avoids the "reinventing the wheel" syndrome.
  7. Seek feedback on the program after it is implemented. Make adjustments to the program as appropriate to ensure maximum effectiveness. Are the goals established in step 2 above being achieved? If not, make changes.

The process sounds more complicated than it is. Don't be discouraged. The point is to do something and get some activity started.

Employee rewards and recognition can be a key part of reducing turnover, enhancing performance, good attitudes and strong financial results for your organization.

Bill Collier is a St. Louis-based business coach, consultant and speaker. He is the author of the book “How to Succeed as a Small Business Owner … and Still Have a Life.” His website is www.collierbiz.com, and his email is bill@collierbiz.com


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