David Jenkins & Associates — Making An Employee Reward Work For The Employer

Making An Employee Reward Work For The Employer

by David Jenkins

Employers reward their staff with different kinds of rewards, but, to the employee, are they really rewards or something else? A reward not linked to actual performance becomes in fact a benefit. Worse, employees will expect it to be provided regardless, because there is no obligation on the employee to earn it from the work they do.

A typical example is long service leave (incidentally, there is no legislative requirement to provide it to employees). If set up correctly, this could be a very effective reward, but most employers have fallen into the trap of letting it become a benefit. For instance, long service leave is often given after the employee has been in one’s employ for a defined period. But this is based on time, not on performance, so even the worst-performing employee who manages to survive in the workplace gets the benefit of extra leave.

The way to change it to a reward is to link it to the employee’s performance. When building the reward, include performance criteria. For instance, require an employee to achieve a percentage such as 80% of KPIs every year and also limit it with a set time period. This means the employer will get a ROI for providing the reward to their employees. In turn, the employee will ensure that their behaviour and productivity is focused on achieving and being recognised for it.

So the key to an effective reward is to link it to employee performance. Here are seven simple steps that an employer can use in developing a reward for employees in the workplace:

  • Define exactly what the reward is for.

    • There must be a purpose for the reward. What does the employer want to influence in regard to employee behaviour?

  • Identify what reward/s your staff are motivated by.

    • A low-income employee may be totally focussed on money, whereas a knowledge worker may want opportunities for training and skills development.

  • Build the reward for ease of use and administration.

    • Any reward should be designed for ease of use. Spend your time on measuring performance, not administering a reward.

  • Link the reward to employee performance.

    • Develop performance measures that accurately and objectively measure employee performance and results. Do not base them on subjective measures.

  • Develop an effective method to assess or measure an employee performance.

    • Keep it simple, but make sure measures provide clear information on actual employee performance.

  • Set and communicate clear criteria so employees understand how they will be rewarded.

    • Communicate to your employees clearly what they have to do to receive the reward and be consistent in its application.

  • Regularly evaluate the reward to ensure that it is providing a return on investment to the business.

    • Review rewards to ensure they are contributing to both employees and the business. Over time, some rewards can become less important to employees so it is important to reassess their worth.