When I think about rewarding employees, I think about the actual act of recognizing an employee and the psychological aspects that go with it. In my mind, this goes back to basic human needs.
If we look at Maslow’s Hierarchy of Needs, one of the things that’s mid-way up the pyramid is the need for recognition. There are also self-esteem needs and the need to be accepted and to have a feeling of belonging to a group of people. I think employers often focus too much on buying a pen or creating a plaque as a tangible item to recognize employees with, but in my mind, it really goes back to just saying to a person, “I see you” or “I recognize the importance of you and what you contribute on a day-to-day basis.”
Rewards and recognition are such important aspects of an organization, but sometimes there’s a misconception that they’re something a company needs to invest in and that they cost a lot of money to make a big difference. In reality, rewarding your employees doesn’t have to be costly.
There are many ways to reward and recognize employees that don’t cost very much or that cost nothing at all. In fact, it can be very costly for a company not to reward their employees, because when people don’t feel recognized or rewarded, they disengage from the organization and start looking for other job opportunities. Also, their morale and productivity may be lower and then, of course, they end up leaving, which costs the company money because the turnover rate is high and they have to keep replacing people.
Mistakes Employers Make When Rewarding Employees
There are a few mistakes employers often make when rewarding employees. Some of them include:
- Creating Reward Programs Not Tailored to Their Company—Oftentimes companies create a recognition plaque or employee-of-the-month program as a way of rewarding employees—and not that those things don’t have a high value, because they do—but they are usually not tailored specifically enough to their organization. Or to the types of employees working for the organization. Perhaps there are generational differences or cultural differences and so the programs I mentioned above don’t necessarily reward employees in the way that people want to be rewarded.
- Tying Rewards to Pay—This means employers put a lot of focus on making sure people are paid appropriately and paid the right amount for the work they do. This is a mistake, however. Employers need to take a look at the research out there; there are multitudes of studies and surveys that have been done or that are done each year.
For example, the Best Places to Work Institute does a survey every year and they use the results to compute the 100 Best Places to Work in the United States. And when you look at the questions they ask on their survey—there are 57 of them—only two of them are tied to compensation: Asking people if they are paid fairly for the work they do or if they get a fair share of their company’s profits.
Five of the 57 questions are related to soft-rewards and recognition and ask employees, “Do you feel appreciated? Do you feel management shows you appreciation? Do you get feedback on your work?” This shows that the focus isn’t on compensation as much as it is on soft-rewards.
And research tells us that while compensation is a motivating factor and a reason why employees stayed committed to an organization, it’s actually lower on the list of needs than things like feeling recognized and rewarded. So that’s why I think employers often focus too much on tying the rewards to pay and not enough on the actual act of recognizing an employee for a job well done.
- Creating Programs that Only Appear to be Rewarding—Employers who have reward and recognition programs in place at their company are on the right path, but sometimes their programs don’t give employees enough ownership.
For example, some companies have employee-of-the-month programs, and the employee is usually chosen by management or a committee of management, so sometimes employees get the perception that they have to be one of the “company favorites” to be chosen. This makes the rewards program lose its credibility, especially if employees feel like the same people are rewarded over and over again.
So, do you want to create a better, more efficient program for rewarding employees? Then check out my next Insight, where I’ll give you the steps to take to create a low-cost reward and recognition program at your company.
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