Rewards and Recognition Programs to Improve Your Bottom Line

Marcianne Kuethen

September 3, 2013

Every day, companies across the nation implement Rewards and Recognition programs for their employees, hoping to bring about behavioral change and increase employee engagement and productivity. But can a reward plaque, 5-year watch, weekend cruise, or company-branded pen really produce highly motivated employees?

Research shows that there are merits to employing Rewards and Recognition programs, but only if they are built and implemented with critical factors in mind. For instance, if you haven’t yet read our recent article on employee motivation, we discussed the mounting research that reveals the importance of respect in your efforts to increasing employee engagement. Ensuring the foundation of a culture of respect is the first building block in creating Rewards and Recognition programs that succeed. Here are several other building blocks to consider:

Reinforce Your Organization’s Culture and Values—Your rewards program must align with how your employees think, the way they work, and what is most important to them. Your company culture must drive the types of rewards you offer as well as how you communicate and brand the program. For example, if your organization has a culture of fitness and attention to good health, offering ice cream sandwiches on Friday afternoons may not be viewed as a valuable reward.

Define Your Audience—Decide up front who will be eligible to participate in this reward program. Will you include part-timers and contract workers? Will an employee still receive a partial reward if he or she leaves the company? Think through these specific details up front to prevent legal issues or complaints.

Show Team Members the Value— Rewards motivate employees by placing increased value on work tasks. If your incentive program is to succeed, you’ll need to communicate and support it in a way that conveys that it’s a valuable program and worth their effort.

Sustaining Interest—Design your program so employees can accrue points frequently. Make sure some of the rewards can be attained within a fairly short time, and offer a range of rewards at lower and higher point values so less patient employees can achieve results quickly.

Keep It Simple—Unclear rules will certainly discourage participation, so avoid complicated instructions and formulas. Communicate the rules clearly. Specifically explain what behaviors you desire and exactly how the rewards for them may be earned.

Measure and Refine—Once your plan is in motion, you must analyze whether the program is working. This will require you to gather data, collect feedback from participants, and monitor the program while it’s in use. Afterward, you’ll want to survey participants to learn whether the program motivated better performance or not. With all this information, you can tweak and improve what you offer the next time around.

One important warning to take to heart is that Rewards and Recognition programs can backfire and actually decrease motivation, productivity, and engagement.  If they are only aimed at the bottom line, employees will sense your motives and the program will not result in lasting or meaningful behavioral or cultural change. You must model and fully think through your reward system or it can result in negative unintended consequences such as the ones described below:

1)      If you offer incentives to sales people to increase their sales but ignore gross profit, it may result in higher sales but lower gross profit.

2)      Offering rewards based on the wrong assumption may prevent your program from achieving the desired changes in behavior. For example, you might assume the problem is a lack of motivation when it actually may be ineffective training or tools.

3)      Offering individual incentives to a strong team may create internal competition with each other and diminish teamwork. Your recognition program will be worse than useless if it ultimately divides workers rather than building them into a tighter team.

4)      Incentive programs where only one or two employees win can be demotivating for everyone except the winners. The “losers” may eventually check out.

5)      Reward systems aimed only at increasing the company’s profits often create a temporary outward surge of effort, but internal motivation rarely lasts beyond the program incentives.

6)      Carrot and stick reward systems don’t have the sticking power that respect creates. These methods can strip employees’ motivation and halt momentum toward engagement in their work.

It is possible to increase your employees’ engagement, motivation, and productivity with a Rewards and Recognition program. But a successful incentive program requires a foundation of respect, an awareness of your company’s unique culture, and a focus on your employees’ needs in order to improve your bottom line.

One key to creating a culture of respect is trust. Here’s how to build it.