Hit The Reward & Recognition Mark

March 2008
Human Capital Magazine

Excerpt from article:

Everyone likes a pat on the back now and then, but does an ad-hoc reward and recognition program still cut it? Human Capital discovers that flexible - and fun - perks are the key

How often does a reward and recognition (R&R) program launch in a blaze of promotion and high take-up rates only for it to flounder months later, buried under an administration burden and general disinterest from managers and employees?

As recent research from employee R&R specialists Accumulate reveals, programs fail for a number of reasons - but there are key strategies that can prevent them from falling over, notes Adrian Finlayson, CEO of Accumulate. "We find that where programs fail, it's generally because of a range of factors - not just one single thing.

"Common issues include program objectives not being aligned to company objectives, program structure not being tailored to the organisational culture, and education and ongoing communication being limited," he says.The companies that avoid these pitfalls are likely to see improved motivation and engagement at work, as well as higher retention rates - all of which bring positive bottom-line results.

Laying the groundwork
Prior to setting up an R&R program, consultation with employees, managers and senior management needs to take place.

This allows for alignment between what the organisation wants to achieve and what will motivate individuals to behave the way the organisation needs them to behave.  

Key objectives of an R&R program might include:
* Increased sales 
* Increased productivity levels 
* Alignment of behaviour with corporate values
* Improved engagement or satisfaction levels
* Higher levels of safety/reduced number of incidents
* Accuracy improvements (in reporting, etc)
* Just in Time (JIT) - improved management of inventory levels
* Recognition of milestones such as tenure y(length of service)

If the program is intended to deliver a particular outcome, such as increased productivity, then it makes sense to structure the program around this outcome, Finlayson notes.

This can mean targeting the program to the types of behaviours the organisation wishes to reinforce and to the relevant areas of the business, while also introducing reporting and measurement mechanisms that enable managers to evaluate how effectively the program is working.

R&R program objectives should be agreed by the CEO and senior executive team and tied directly to company objectives.

"An R&R program can be an effective way of motivating individuals to behave in a way that's consistent with corporate values, business goals and performance targets," says Finlayson.

"We encourage our clients to see R&R as a business investment - and with any investment there needs to be an objective. Without clear objectives it's impossible to evaluate and justify the investment in R&R.

"From the employees' point of view, if it's not tied to company objectives, a reward program runs the risk of becoming either an expected part of a salary or being mistrusted because there's a lack of clarity around what employees need to do to earn a reward," Finlayson continues.

Other considerations
It's also important to be aware of what other organisations are doing and what potential employees might want from an R&R program. By studying what others are doing, it is possible for companies to build competitive remuneration and benefits packages that use R&R programs in an innovative way.

How rigid should an R&R program be? According to the experts HC contacted, this depends on a number of criteria.

Firstly, the organisation's size and structure has an impact - larger organisations with many employees and more sophisticated monitoring and reporting tend to need more structured R&R programs.

Managers of each division should be given some discretionary budget to spontaneously allocate small 'spot' awards, such as a double movie pass, when they see something worth rewarding.

Indeed, the R&R budget has a significant impact on programs; the bigger the budget, the more control that is needed.

"More control means more structure in the R&R program. Such controls can include how and when rewards can be approved and redeemed," says Finlayson.

Easing the admin burden
Technology has transformed the administration of R&R programs by providing great efficiencies and openness in: 

* Reporting - technology platforms can provide instant reports on measures that are built into the program during the design phase
* Participant communication, education and training
* Rewards redemption - systems now exist where participants can jump online and redeem their points on a range of rewards of their choice
* Budget management - with program automation, R&R expenditure can be monitored across an organisation in near real-time
 

An online program allows participants to log into a customised, program-branded website to choose their reward from a broad range of options and then order it online, drawing down from a points balance in their individual 'account'.

This online option is a far more efficient process and the back end ensures that the whole transaction is tracked for reporting purposes.

Variety the spice of life
However, not everyone is motivated by the same non-financial rewards, so variety is crucial. For example, some people are motivated by public recognition, so simply announcing the value of their contribution to the rest of the team may be more effective than giving them something of monetary value. 

A reward is more motivating if it's what someone wants rather than something that's prescribed. People like variety and being able to choose a reward that suits them," Rowell says. "Understanding your audience - that is, the participants of your program - and tailoring the R&R options to suit them will ensure that the program strikes the right chord and is effective."

Self-selection of rewards is also important, in order to prevent managers choosing a reward that is not appealing to the recipient.

Finlayson notes that recognition is often the 'forgotten R'. "Variety in how we recognise people is also important to achieving the program objectives. This may take the form of peer-to-peer recognition, manager recognition, team recognition, departmental or company wide," he says. The types of recognition and the types of rewards offered should be tailored to each organisation and this is where external experts can assist in delivering best practice and effective programs. 

For more information about the Accumulate employee recognition rewards programs and software, sales & channel incentive programs or customer loyalty programs call 1300 733 725 or email info@accumulate.com.au