Recognition, Rewards and Results
Recently I was engaged in an online blog about employee reward schemes and my professional experiences. The originator of the inquiry was wondering how to compensate employees for their ideas and performance. The discussions were varied and the suggested approaches interesting.
Always there is the argument of financial reward and if it is necessary beyond the non-monetary recognition programs. Some contributors were adamant that it should be considered part of doing a good job and no special consideration was warranted. Some felt that a TQM process or a Six Sigma approach was the Holy Grail and for them it may well be the case. They failed to mention that those programs can include recognition and reward components.
Such initiatives should be both individual as well as team in scope. Here are a couple of successful examples:
1. One program that produced very successful results was at a firm that provided digitized data. The process was manual, before the advent of hi-tech scanners, requiring the operators to electronically trace various charts to transform analogue data to digital. This laborious and repetitive activity required very stringent accuracy margins. The operators were paid hourly and certain performance measures were not only expected but insisted upon.
The challenge was how to increase performance while maintaining the accuracy requirements and incorporate a motivation factor. The company was doing well but the focus was on how to increase revenue. They began by looking at their best performers and what their stats were. Essentially, the number of feet produced per shift with an accuracy rate of 95%+ was the benchmark threshold. Then, revenue per operator at that rate was compared to the overall average for the group. These operators were paid marginally higher than the minimum wage initially with some uplift as their performance and time on the job increased a typical workplace scenario.
With the above as the backdrop the following program was implemented:
- A day bonus of $50 was offered for reaching the top performer thresholds with a resulting increase in revenue by several times that bonus amount.
- The result was dramatic as almost every operator was trying to hit the daily production number to qualify for the bonus.
- Morale was high and turnover was low.
2. The next example of a reward and recognition program had multiple strategies and desired outcomes. As in the previous example, the workforce was doing a good job, but the company’s goals were centered on Best Practice, Employer of Choice, retention and high morale.
- The desire to become a Best Practice centric firm was two-fold. First, it was surmised their customers would likely respond positively to their various services (customer satisfaction rating of 80% or better), and second, their shareholders would be assured the business was being well managed. This had significance for positive recognition across the entire enterprise. Very exhaustive service level agreements and stringent performance thresholds needed to be implemented and then delivered.
The group went from not knowing what Best Practice was to eventually winning a JD Powers Award.
- Being able to demonstrate they were an Employer of Choice enhanced their online recruiting.
- Retention and morale were very much assured and enjoyed by the implementation of the other programs.
- Not all of the recognition included a monetary component but in most cases it enhanced the motivation factor.
Now the reward part; as this was a multi-year process a lot of short-term rewards were incorporated. Here are a few:
- Performer of the month recognition with a small gift voucher.
- Group monthly performance usually meant free pizza day.
- Employee key contributions were communicated and posted for the entire employee base to see.
On the cautionary side of these programs is that you need to carefully determine what you want to achieve as well what the recognition and reward should be. Once you enter into a program or series of programs, retreating from them or not replacing them with a comparative program will cause disappointment and that can be far reaching in consequences.
This is not to suggest that these approaches and these few examples is in any way a universal recipe to recognize and reward your work force. The diversity of workers and environments may well eliminate some or all of these approaches. If you, as the Manager or President, ask the question “how do we do more?” then it will require commitment on your part as well your people, and it just might be worth the adventure.
Recognition and reward will produce results.
Managing Principal – Alberta