...
Unlike a pay-for-performance type of incentive plan which companies often implement for their employees, an employee recognition program is a flexible, creative, sometimes spontaneous, and universal reward system implemented for several reasons. The most common reasons employers institute such programs are:
- Employee retention – turnover is expensive.
- Employee appreciation – workers want to feel valued.
Generation Y workers are beginning to make their mark on the workplace. They have a reputation for being known as the “now” generation, needing immediate gratification. They believe they should be recognized frequently and immediately for doing a good job. A once-a-year performance review does not satisfy this group, and often they will not stick around that long to be appreciated. In fact, some companies have instituted one-year, two-year, and three-year awards. Although they still implement the standard 5-year incremental service awards, many Gen Y workers are not around to participate in the longer range awards. This is another reason employers are trying to build employee loyalty – to reduce turnover.
Types
There are basically two types of incentive programs that companies offer to employees.
- Cash incentives (e.g., incentive bonuses and performance pay plans);
- Non-cash awards (e.g., any of an unlimited number of “thank-you’s,” gift certificates, company merchandise, etc.).
Some employees are just not motivated by a general recognition program. That is why programs can be designed to peak the interest of a particular employee population. Some workers want both cash and awards; some want a work/life balance; some want just the money; some want flexibility; and some just want to be recognized. Creativity can be used to appeal to each type of employee.
Reasons
As mentioned previously, there are two main reasons (employee recognition and retention) for implementing a recognition program. However, there are many specific reasons for which employees should be recognized in order to accomplish the two goals. These can include meeting personal goals; team building efforts; cost reduction; or perfect attendance.
The act of recognition shows respect, commends accomplishment, improves morale, and can ultimately increase productivity.
Examples
Some of the more common examples of employee recognition used by companies include:
- Thank you note or electronic greeting card;
- Email from the CEO or President of the company;
- Spot award;
- Travel (e.g., airline tickets);
- Gift certificate (e.g., restaurant, movies, gas card, etc.);
- Jewelry or watch;
- Flowers;
- Casual dress day;
- Extra vacation or personal day;
- Merchandise with company logo (e.g., t-shirt, mug, pen, etc.);
- Food (e.g., pizza, bakery, ice cream provided by employer);
- Celebration (e.g., a party for the team or department);
- Birthday/anniversary cards;
- Holiday parties; or
- Lunch with a supervisor.
Implementation and administration
There are a number of organizations that offer services to employers for setting up such a recognition program and tailoring it to fit each company’s needs. They will also educate managers as to how to use the program and take full advantage of it.
It is best to keep the program simple. Some programs are now entirely web-based and managers are able to go online to select the level of award for a particular employee. The employee is then notified and congratulated, and is able to choose his award from a host of online options in that category, thus allowing customization for each employee.
A noted psychologist, B.F. Skinner, believed that people learn to behave in a manner that gives them the desired consequences. Results of future employee satisfaction surveys, as well as the trend in a company’s turnover rate, will clearly indicate the success of the program.