Hands up if you want to choose your own bonus!?
Every business owner wants their employees to feel appreciated. Every employee wants to know that they are valued by their employer. We’re all on the same page. Yet employee recognition programs that offer a ‘one size fits all’ approach often do not suit everyone equally. So how about allowing staff to choose their own reward!?
Many organisations offer performance based reward programs. Often they are aligned with currency. No doubt we could all do with an extra dollar, but while money is a necessity to keep a roof over our heads, it is generally not our fundamental driver to get out of bed and show up to work each day. We have other intrinsic motivations connected to experiences, health and wellness, and quality of life. With this in mind it makes sense to provide the opportunity for an employee to select an award affiliated with what inspires them.
Understanding employees reward preferences differ and tailoring a reward system to suit is intuitive management, but don’t think it won’t present a challenge. Your graduate may appreciate a contribution to paying off their post-secondary education costs, while a more seasoned employee may want an overseas holiday. You can engage with your workforce to gain an insight into the type of rewards that are meaningful to them, but to ensure an even playing field you may want to create a ‘grab bag’ style system. This can be connected to a points system where recipients can ‘cash’ their points early to receive a lower level reward item, or build these overtime to enjoy the benefits of a more valuable reward. Points can be allotted to individuals, teams or projects. Be careful, the more complex the reward system the more difficult to manage. I suggest rigorous testing with plenty of employee input.
While it is not a common approach for a company to fit recognition to the person, it does demonstrate knowledge of an employee’s interests beyond the workplace. The very act of asking employees to proffer their opinion on how they should be rewarded exhibits respect for your employees and your aspiration to recognise and remunerate them for their contributions.
If you want to control compensation dollars, ask your employees to throw a little skin in the game. For example, those that earn between $120K-$150K can sacrifice a portion of their salary in exchange for a higher potential bonus should they meet performance parameters. That is to say, if you have two employees earning $150K per annum, one may choose to sacrifice $10K for a potential $20K in bonuses, while the other may opt to sacrifice $25K for a $50K return. This style of reward system is directly linked to the organisation’s bottom line and motivates employees to reach targets beneficial to the company. And while the company proposes the risk, it is the employee who chooses whether or not they take up the offer. This bonus system style however is only suited to top managers as they have the biggest influence on company profits. If your industry is expecting a lean year, you can expect your managers to safe guard their salaries by taking no risk at all. The system may suit an entrepreneurial workforce, but the pick your salary plan in an unstable environment will result in failure to manage objectives.
Consider today’s workforce. It’s all about customisation; increased parental leave benefits versus more flexible working hours versus working remote to the office. All of these benefits have a different level of value to each individual employee. For some, a combination of benefit types will be most appealing. How do you decipher the type of reward system that is best for your workers?
Cash is a great bonus, but it is often spent on paying bills, groceries or the kids school fees. A tangible item such as a big screen television for the obsessed gamer, a gift card to one’s favourite clothing store or a bottle of grange for the wine connoisseur are recognised and appreciated as a special recognition of one’s efforts and passions. A personalised approach will leave a far greater lasting impression, however I think you will all agree that no matter what the reward you bestow upon your employees, at the end of the day public recognition in front of one’s peers is the pat on the back that will prove a difficult motivator to beat every day of the week. It is simply human nature that a boost to our ego will result in a rise to our self-worth. And that is money in the bank!
