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A longer version of this article first appeared on motivosity.com.
At the heart of every business, in every industry, in every part of the world, are the most important pieces of any company — the people. Employees are the lifeblood of an organization, critical for its success. But what keeps them engaged, happy and less likely to leave?
Studies show that employee recognition is a top driver of engagement. A recent survey found that 39% of employees say the best way to improve their engagement is for leaders to recognize their work. At least 80% of employees say they would work harder if they felt better appreciated.
Employees are more engaged when they’re recognized for good work. Recognition leads to higher job satisfaction, increased productivity and repeated positive actions. Thus, implementing a comprehensive employee rewards and recognition strategy is key. Companies with strong employee recognition programs see up to 21% higher profits and experience a 50% reduction in turnover on average.
Building an Employee Rewards Strategy
When employees are recognized for good work (and see how much the company appreciates them), the business is more likely to be successful. HR professionals agree that recognition programs directly impact retention in a positive way and employees report that they work harder (increasing their productivity) when they feel valued.
Showing employees how much they’re appreciated is the first step in improving employee engagement. And for most, that means building an employee rewards strategy. An employee rewards strategy is a comprehensive way to show employees they are valued through benefits, compensation, development opportunities, recognition programs and more.
Some key components of a rewards strategy include:
- Formal recognition initiatives that align to company values.
- Performance-based compensation like bonuses and commissions.
- Physical rewards like company swag.
- Professional development opportunities.
- Experiential rewards like paid vacations or outings.
There are five key pillars to crafting a rewards strategy. You want to ensure the strategy includes competitive compensation, comprehensive benefits, better work/life integration and balance, opportunities for career development and growth and overall recognition and appreciation.
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Employee recognition is a critical component of a total rewards strategy as it directly impacts engagement, productivity and retention.
Steps to Creating a Rewards Strategy
When creating a new rewards strategy for your organization, follow these steps:
- First, assess your current rewards and recognition programs.
- Next, align the strategy to your company's mission, values and goals.
- Survey employees to understand their preferences.
- Once your survey is complete, design a comprehensive strategy that includes the five key pillars.
- Once your strategy is complete, communicate it out to all employees.
- Finally, regularly review and refine the strategy to ensure it continues to meet your needs and the needs of your employees.
Rewards can be given for many reasons, including milestones (such as birthdays or work anniversaries), new employee onboarding, work achievements, holidays and special events or participation in company initiatives. No matter the reason, rewards distribution should follow best practices. They should be timely, meaningful, flexible, personalized and accessible to the employee. Examples of employee rewards include custom gifts, company swag, gift cards, travel experiences, monetary rewards (such as dollars or points) or intangible rewards (such as extra time off).
Recognition should also follow best practices. Employee recognition can be either formal or informal, but should be specific and authentic, while aligned with company values at the same time.
Conclusion
Rewards and recognition are critical for employee engagement, satisfaction and retention. When employees feel respected and appreciated, they are seven times more likely to report being treated with respect. This leads to better work performance, increased loyalty and higher satisfaction. Companies that implement formal recognition programs have a clear way to reward employees that align to their company values, directly impact the business and more.
Motivosity makes it easy to implement a comprehensive employee rewards and recognition program. Visit motivosity.com to start building an unforgettable culture of appreciation today.
