[VIDEO] 7 Fundamentals of An Effective Employee Rewards & Recognition System


The facts don’t lie The number of engaged vs. unengaged employees will determine the level of your success. Let’s pretend you are a farmer and have a team of horses plowing a field. If the entire team is pulling in one direction, but two are sitting on their haunches refusing to move, how far will you go? What would happen if half of your horses decided they weren’t working today?

Often, managers believe that if a majority of workers are engaged, that is good enough. But as you can see, it only takes a small number of disengaged employees to sabotage your workplace culture.

A “bad apple” really can “spoil the whole bunch!” If employee engagement is important to your success, then you should make it easier, not harder, for employees to enjoy their work, feel appreciated, and constantly do their best.

1 – Determine the Result

First, you need to establish the end goal. What are you trying to accomplish? What is the company’s vision? What goals do you have as a manager?

Creating rewards for the sake of rewards is pointless. You need to know the specific goals you want your team to achieve. Once you’ve determined the result, you need to convey it to your employees in a way that garners their interest and spurs them into action.

2 – Establish the Rules

For the same reason you want to clarify the end goal, you also need to make sure the compensation or reward structure is clear and easy to understand.

If your employees are spending their time trying to figure out the rules of the game, they won’t be working on the goal. Make the rules easy to understand and it will give clarity and establish trust in the rewards system. Establishing trust in your system is imperative. No one wants to win a contest only to have to fight at the end to get his or her reward.

The last thing employees want to do is work their butts off only to have to fight about whether or not they truly “won”. Don’t make them fight over the terms when they should be receiving their reward!

3 – Make the Reward Worth it

The reward needs to be worth the effort. Just as the “punishment should fit the crime” so the “rewards should fit the achievement.”

If you decide to reward the highest sales mark for the year with a golf ball set, you may want to rethink your strategy. Put yourself in your employees’ shoes. What reward would you want for reaching that goal? Choose rewards that are appealing to your employees, and are appropriate for the amount of effort it takes to win. You don’t want to be seen as cheap, but you also don’t want your employees expecting a reward for every little thing they do.

Let the reward fit the goal!

4 – Set a goal that is challenging, but not impossible

Challenges force us to perform above and beyond what we thought possible. The SEAL team is a perfect example of this in action. SEAL members, part of the Navy’s Special Forces, swear on the same code, “I persevere and thrive on adversity.”

Sailors within the SEAL team ranks are a living testament to the idea that the body can endure far more than the mind thought possible.

5 – Reward On Time

If you want your rewards system to work, give your employees the gift of immediate gratification. The closer you can tie the reward to the goal achieved, the stronger the reinforcement will be. This applies to everything about recognition, not just rewards systems. Once an employee has done something well, aim to reward or recognize them within one week of their effort.

Recognition doesn’t always have to be something big. Often, all people really want is for someone to acknowledge their effort and appreciate it.

People want to be noticed. They want to know their work matters and their extra effort hasn’t been swept under the rug.

6 – Analyze the Entire Rewards System

Once you’ve written down the goals you want your team to achieve, and thought of creative ways to tie rewards to those specific goals, you need to think about the entire system. Do any of your goals conflict?

The last thing you want is for your employees to be confused on which goal you actually want achieved. Often, managers create rewards systems that don’t make sense. If you want your team to reach a sales goal, don’t tie most of the rewards to customer service.

Make the reward worth it, and tie it to the right goal.

7 – Protect Against Unintended Consequences

People respond to incentives. When you reward your employees, they will change their behavior. But most managers forget that incentives often have unintended consequences.

If your reward pits team members against one another, don’t be surprised when they start sabotaging each other or refuse to share helpful tips. How will they try to accomplish the goal? If it is detrimental to your office culture, you may want to change the rewards system and keep teamwork a top priority. So before you roll out your new rewards system, think through the entire process.

Don’t be lazy. Nail down your end goal, the rules for winning, and the reward that fits the effort given.

Think about these:

  1. What specific, well-defined goal are you going to reward?
  2. What are the contest rules?
  3. What reward will make employees want to win?
  4. Is the goal challenging but not impossible?
  5. What is the timeframe for the reward?
  6. Step back. Does your reward system make sense? Accomplish what it should?
  7. Will your competition create animosity among team members?

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