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The Importance of Reward and Recognition

the  importance of reward and recognition

In November last year Harvard Business Review published an article by Mike Robbins, a leading authority on staff motivation and engagement on why employees need both recognition and appreciation. Nearly a year on, and this could not be more relevant to today’s increased focus and understanding of how we keep our employees both engaged and motivated.

Obviously since this article was written, the working world has changed. Covid-19 has had a profound effect on us all. Offices sit empty or with a spatter of employees allowed in and working from home has become standard practice.

Robbins focusses on the belief that recognition is about acknowledging what people do and appreciation is about how they behave. He talks about how these two values are key for leaders who want their teams to thrive. However, much of this is theory and, there is an especially important missing component – Reward!

Reward is the way that your employees understand that their employers have valued what they do and how they behave. This is a component that turns a company values into a reality and helps cement the cultures of engagement, loyalty and high performance.

Supporting business strategy

One thing that we have heard from a number of our clients recently is how business objectives and strategies change over time. From fast growth, where HR teams are under pressure to attract and retain talent, through to reducing costs and driving efficiencies where HR are under pressure to reduce churn and therefore acquisition costs.

And as the reality and financial implications of the global Coronavirus pandemic have set in, businesses are reviewing their objectives and HR teams are under increased pressure to keep their talent engaged and motivated – especially in this climate of uncertainty.

They are being asked to do more with less as financial belts tighten but have an increased workload as they try and engage with a more dispersed and remote workforce. Hence, there is now more importance placed on recognition and reward than ever before.

A recent survey by Psychometrics revealed that 58% of employees indicated that being recognised would improve their engagement at work.  Further to this, a Gallup poll showed that when employees don't feel recognised, they're twice as likely to say they want to quit within the next year.

During Covid-19 it is probable that these figures are a little on the low side as employees become more and more remote and isolated. However, McKinsey believe that this hiatus in office working actually presents an opportunity for businesses and their leaders to seize the moment and review their employees’ needs.

Their recent report showed that being recognised at work during this pandemic increased work effectiveness by over 20%, improved company engagement by over 50% and improved the sense of personal wellbeing amongst employees by nearly 50%.  

 

What is effective recognition?

 

There are many ways in which companies can recognise their employees and many reasons to do so. For example, Colt Technology who run a global reward and recognition scheme has focused on using their scheme to support the implementation of company values. It recognises and rewards its staff for not only working hard and being successful, but also behaving in a way that best represents the business and its values.

In addition, Colt has implemented a variable mix of financial and non-financial rewards that help give back to employees without putting additional financial strain on the company. In fact, the Gallup report mentioned earlier surveyed which types of recognition and reward were the most memorable and emphasized six methods – and money is not the only or most popular form – these were:

  1. Public recognition or acknowledgment via an award, certificate or commendation
  2. Private recognition from a boss, peer or customer
  3. Receiving or obtaining a high level of achievement through evaluations or reviews
  4. Promotion or increase in scope of work or responsibility to show trust
  5. Monetary award such as a trip, prize or pay increase
  6. Personal satisfaction or pride in work

Given this research and the conversations we have had with our client at Xexec, we know that a successful reward and recognition strategy should include a mix of financial and non-financial rewards. But more importantly, it should now, in the time of Covid-19 and an uncertain working environment, become even more important to a business and how it drives culture, engages and motivates its workforce, wherever they are based.

If you'd like to find out more about building an effective employee reward and recognition strategy, download our free e-book

Download Reward and Recognition e-Book

 

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