It is a well-established fact among psychologists that different types of people react to different types of rewards. Despite this fact, many traditional businesses and non-profit organizations still rely on a single, simple “more pay for more results” type of compensation scheme. While this strategy may pay some immediate dividends in the short run, it is a strategy that, in the long run, is inevitably doomed to failure.
An Age-Old, but Outdated Paradigm
Regardless of the position held every employee must be inspired, motivated, coerced – choose any word you please – into working as productively as possible. While most employees and employers would cite money as the main motivating influence, studies have demonstrated that this is simply not the case.
Recognition, peer approval and even minor perks have also been identified as significant motivators in the work lives of many employees. This issue has come to the forefront in recent years as employers have finally come to grips with reality that the newest generation of employees requires a somewhat different approach to employee rewards and recognition solutions.
First, Some History - The “Old School” Approach
In the past, businesses have spent enormous amounts of money on employee incentives and rewards programs. By and large, these programs have been successful as the American model of management has dominated the world economy and been emulated in almost every country in the world.
Nevertheless, these reward and recognition programs have lagged far behind the cultural changes that have overtaken the American workplace. Previously, for example, employees were recognized as good “implementers of company policy” or “excellent earners.” In every case, the recognition was done in a ‘face to face’ way. The venue was always a company meeting or corporate event and the recipient was always congratulated by his peers in an immediate and personal manner.
Though the need to reinforce excellent behavior and superior achievement is more pressing than ever, the days of personal congratulations are over. Fully, one third of the U.S. workforce works on a contingent basis and has very little personal contact with their immediate supervisor or their peers. Obviously, a different sort of rewards and recognition solution is needed.
Now, the New Reality
The newest generation of employees grew up in a “recognition rich” household that now requires a serious rethinking on the part of employers as to the best rewards and recognition solutions for their company. Instead of quarterly or yearly “achievement awards,” the best companies will now develop managers who can consistently coach and “recognize” employees on an almost daily basis. Companies must realize that this change in focus is essential for success in the 21st century.
The basis for employee satisfaction and superior performance remain the same. The need to achieve, a control over one’s destiny and a degree of influence are still the prime motivators in a person’s work life but how they are satisfied has not kept pace with current technology.
Looking to the Future
To get the best results, a company must properly compensate the new generation of employees according to their rules or risk losing them. Some of the shortfalls of traditional reward programs include poor focus, lack of relevance and non-transparency. For example, a program that targets increased sales volume in a dying sector of the business and rewards the winners with a company mug fails on all counts. No one in the company cares about the sector, the new customers or the “valuable prize” for winning and, most importantly, every employee knows it.
The next generation of rewards programs must be an enterprise-wide solution that not only clearly enumerates the goals but also ensures a totally transparent scoring matrix that is easily accessible to all interested parties. These two factors, alone, will guarantee that all employees and management personnel are actively engaged in any rewards program. The camaraderie and competition engendered by a good rewards program are just icing on the cake.
The First Step
Implementing and monitoring a focused and successful rewards program can be a tedious and tiresome process without the help of some serious technology. Consider incorporating one into your current HRIS and see the benefits develop from there. It is not an easy task and the first one will probably not be your best effort but a little more time and effort will surely show results.
About the Author
Carolyn Sokol writes about issues that may affect small businesses such as human resources, HR management software, and HRIS systems. She is a founder of PEOcompare.com and contributor to compareHRIS.com, both of which help match businesses to the right HR or payroll service provider for their particular needs. Her background is in marketing and communications, employee education and training, development of policies and procedures and the ongoing delivery of outstanding customer service.