Employee Reward Programs: Your Ticket to Higher Morale and Better Performance

A poorly designed employee reward program literally does more harm than good. Unplanned or insincere programs are destined to fail in their morale-boosting design and may actually breed dissatisfaction among your employees. It's important to understand all of the dynamics involved in an office setting, particularly considering your relationships with your employees and their relationships with one another. The best practices balance individual and group awards, frequent and rare awards, and large and small rewards.

Individual awards are necessary, since an employee's single greatest complaint is likely that her work goes unrecognized and unappreciated. The reward need not be large or publicized, but should be specifically linked to the accomplishments of the recipient. Group awards are also important, however, in order to foster teamwork and a group ethic. Be careful with group recognition, since it tends to be impersonal and has the potential to reward under-performing employees as much as those who deserve recognition. This is a quick ticket to dissatisfaction among employees.

The frequency of awards is very important. Too infrequent, and employees will begin to feel unappreciated. Too often, and the rewards will lose their meaning and fail to motivate. Monthly and yearly awards are fine, but there should also be more frequent awards so that employees have a steady stream of encouragement. The frequency of awards is also related to the size and prestige of the honor.

Issuing nothing except small rewards will lead to general malaise among employees, while giving only large awards is not practical. One pitfall to avoid is the tendency to increase each subsequent award. With this kind of thinking, rewards will soon become impractical, overshadowing any smaller rewards and even the job itself. Tickets to theatre or sporting events, bowling excursions and banquets should be balanced with encouraging notes, congratulations and a few batches of brownies. Awards do not all need to be large, nor do they need to get better all the time. Their main function is to recognize excellent performance and inspire under-performing employees. These goals should always be kept in focus when determining what kinds of rewards to give employees.

Performance incentives are double-edged swords. When recognizing and rewarding one person or group, the result is a de facto punishment for everyone else. Still, there are several strategies that mitigate such problems and turn employee reward programs into sources of positive progress rather than destructive forces.

The most common reward programs also suffer from the most pitfalls. "Employee of the Month" (EOM) programs provide the best examples. One basic failing of such rewards is that it is so infrequent. Given only once per month, that means there are only twelve awards given out per year. Also, the performance that earned the distinction may have taken place weeks before the recognition is given, by which point it has been disassociated with the award.

Some businessmen, such as Jack Welch, advocate individual awards over group awards. Their reasoning is that under-performing employees will thus be motivated to work harder so that they too will be recognized. However, awards will motivate under-performing employees for only so long before they become discouraged and stop trying. Some companies give the award to everyone at least once. This is a poor solution, since performance ceases to be a factor and the award becomes meaningless. Rather than working hard to earn the honor, employees will simply wait for their turn.

It's a challenge, but developing a strong employee reward program will pay for itself in increased productivity and will also improve the working environment of your company. This is necessary to keep your employees happy and attract high-caliber talent to help your business succeed.

About the Author: J.B. Hooper is a consultant for TicketLiquidator.com. He has been an authority on live entertainment and recreation for more than twenty years.