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HR Glossary > Rewards And Recognition
Rewards and recognition (sometimes rewards management) is a strategic system for motivating employees to excel in performance and maintaining the loyalty of existing ones. The strategies are often set by top management or human resources and represent a series of employee benefits, activities, or gestures made by employers to show appreciation or pay higher attention.
Creating a rewards and recognition program is not an easy process. The following steps will help you create a successful reward and recognition program for your organization-
Clearly define the intent of your program – What problems are you trying to solve? Why do you want to create a rewards program? Identify the values that are vital to your organization. Determine whether or not rewards & recognitions are the right solutions to promote these values or whether it would better serve you by some other HR tool such as mentoring, training, or developmental assignments.
When defining the audience for whom the rewards are intended, it is helpful to focus on the behavior that needs to be encouraged more than individuals. People in your organization must know why they are being rewarded. They should understand how their performance contributes to achieving the desired results and feel valued for their contribution.
Organizations use various rewards and recognition programs to recognize employees’ hard work and loyalty. The different types of rewards are-
Bonuses: Some organizations offer monetary rewards to the employees for a job well done. The prizes can be either one-time or periodic payments.
Employee stock options: These are given to some employees as a reward program. The company issued these stocks to incentivize them to work harder.
Variable pay: Variable pay is offered by some organizations and their fixed pay as a reward program. In these programs, employees get more money based on their performance or an increase in sales volume.
Written/verbal praise: This type of reward is written or verbal commendation or appreciation to a worker for doing a great job.
On the other hand, Recognition rewards that organizations use for their employees. Recognition can take various forms, such as naming an employee as an internal consultant, providing additional support, or empowering the employee in more excellent assignments to choose from, increased authority, writing an annual report that features employees’ accomplishments, etc.
To promote recognition in the workplace, leaders need to recognize their employees for their contributions. One of the best ways is to create a culture that emphasizes the learning and development of employees. The way this is done is by promoting a culture of continuous development. It will also be great to take it a step further and reward those who have taken the time to focus on self-improvement.
Treating the employees with respect by recognizing their efforts and contributions can help motivate them. It will help create a work environment that is conducive to motivating employees. It would be great to give your employees opportunities to learn from mistakes and understand where they went wrong. You are providing a workforce with the chance of improvement, which can then be recognized in the workplace and out.
Recognition has been noted as a powerful determinant of job satisfaction. It is a fact that recognition can be an effective tool for motivating and retaining employees.
Media attention enhances reputation: An organization’s recognition efforts are likely to get media attention if they are extensive, unusual, or innovative. Media coverage helps an organization strengthen its reputation by portraying it positively, which makes the company look appealing to potential candidates.
Acknowledge exceptional performance: Recognition is an excellent way to acknowledge outstanding performance achieved by employees. That can do it through public praise, a formal note of commendation, or even rewards such as cash or gifts.
Employees feel appreciated: Employees who feel appreciated are more likely to go that extra mile at work, resulting in higher productivity levels and morale.
Employers enjoy lower costs: The cost of recruiting new employees and training them is considerably reduced with motivated employees who stay longer in their jobs due to higher job satisfaction levels.
Builds strong employer brand: Acknowledging exceptional employee performance also helps build a strong employer brand for the company since candidates are likely to choose the company over others when they
To implement a reward system, the following steps should be followed – Clarify your vision: Before you start implementing reward programs, you must be clear about what they involve.
Clarify your vision:- Goals, Benefits, and Costs are all essential things that need to be considered. At this stage, you should also set up a team of people who will manage the implementation of the reward program and take responsibility for it. The team should have clear roles, obligations, and accountabilities. In addition, the decision-makers should clearly define the goals and expected outcomes of the reward programs.
Get a committee:- A dedicated set of people should be appointed who will be responsible for implementing, managing, and establishing reward programs.
Define evident characteristics:- After appointing a committee, each member should define evident characteristics that define how the program will operate and benefit employees. The features should address what you want to achieve through rewards and how you plan to achieve those goals.
Please choose an appropriate method: After defining evident characteristics, it is essential to select the right way to clearly define where each person stands about their performance about each goal or attribute determined in step 3. When choosing
There is an unbroken relationship between reward and motivation. When an employee feels that he is being rewarded consistently for his performance and efforts, he finds his work more rewarding and more fulfilling, making it easier for him to motivate himself to do a better job. On the other hand, a lack of rewards can lead to dissatisfaction and diminished motivation.
Tangible rewards are essential because they can easily measure them. However, when recognition and praise are given consistently, this peer-to-peer recognition can have the same effect as tangible rewards. It’s essential to have both types of reward programs in place to keep your employees engaged in their work.
We would measure the success of any R&R program in terms of employee satisfaction. Ideally, when the employees are satisfied with the R&R program, they are joyful with the rewards and recognition they receive for their hard work and performance. It also helps if the employees know what is expected from them and what they can expect in return.
Make sure that you have a clear perception of what you want to achieve through your R&R program and how you want it to be perceived by your employees. To ensure that your goals are met, you will have to determine what kind of recognition your employees desire. Often, employers tend to provide monetary rewards or rewards related to the job itself, whereas employees would like something more personal and creative.
Rewards can be money, nonmonetary compensation, or non-financial incentives. Rewards are given to people who have performed well, but they can also reward other achievements. A sample of a reward could be a gift voucher on your birthday.
The incentive is a payment to an employee or group of employees to encourage them to increase their productivity, profitability, and higher performance levels. The incentive plans are generally designed to reward superior performance.
Recognition refers to acknowledging the employee’s contribution towards achieving the organization’s goals and objectives. It is not a key motivator but rather a way of giving thanks for the efforts made by an employee.
Benefits are given to employees in addition to their salaries and wages. Benefits may include life insurance, medical insurance, pension fund, leave encashment, and housing loans, among others.
The first and most significant thing that we should avoid is a lack of clarity in communication. If a salesperson can’t understand what his manager wants from him, it’s tough to give back the desired output.
The second biggest mistake is outsourcing rewards. If salespeople feel that their prizes are being given by someone else, they will not feel motivated to work harder. The third biggest mistake is non-existent or little promotion. If there’s no promotion of the R&R program, then it will fail in the long run.
Technology is an essential component of recognition and rewards programs. The technology involved in R&R management systems can be as simple as a company network that allows employees to thank or compliment their colleagues for a job well done, or it could be more complex, involving social tools that will enable employees to show instant appreciation through online profiles, blogs, social networks and so on. One way of increasing job satisfaction through an R&R program is through instant peer recognition, which allows employees to thank or compliment their colleagues for a job well done.
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