After an undisputedly turbulent year, 2020 still enabled many sectors to benefit financially from the pandemic - supermarkets, logistics, online retailers and fast food, to name a few.
Many organisations in these sectors have decided to provide their employees with significant bonuses as a way of recognition. Domino’s Pizza rewarded over 11,500 frontline staff in December, costing £8.6 million, BT offered a £1,500 special bonus to 60,000 workers for their efforts and Amazon recognised their global workforce in an initiative costing more than £367 million.
Whilst these acts of generosity are impressive and most welcomed by employees, why are organisations turning to reward? This article considers the benefits you might experience when implementing reward and recognition best practice in your organisation and the importance of doing so when the pandemic as we know it, comes to an end.
1. Reward reaches people in a hybrid working world
Jumping ahead to a post-pandemic scenario, things are unlikely to return to how they were. With many employees happier with the flexibility of working from home, organisations will be encouraged to adopt a flexible working model.
This change will, however, have an impact on recognition and reward. It has become evident in the last year that recognition has to be rethought when dealing with a remote workforce. Saying ‘thank-you’ when passing colleagues in the office or giving a pat on the back was easy enough pre-pandemic. Fast-forward to today, trying to effectively recognise those sat behind a screen or beavering away on the frontline is becoming increasingly difficult.
Organisations must begin to coach their people into the power of recognition and provide them with the tools to communicate thanks effectively across a remote workforce. Whether it’s a special section of an internal comms newsletter, a nominations programme to spotlight hardworking individuals or a dedicated recognition and reward platform, it’s important that employees have the opportunity to feel appreciated, valued and connected to their colleagues. They may be remote physically, but we should not allow our employees to feel remote emotionally.
2. Creates happier people and improved mental health
Organisational research has pinpointed two critical areas of employee engagement techniques that can have the strongest impact on absenteeism: work-life balance and recognition.
Whilst work-life balance is harder to influence, recognition and appreciation are within the reach of managers. If organisations have the tools and budget available to make hard-working employees feel valued through rewards, research shows that they are likely to have lower employee absenteeism rates of up to 41%.
This reduction in absenteeism is due to the fact that appreciated employees who are thanked for their work are less likely to feel stressed or undervalued. This strengthens their confidence and mental health, meaning they are less likely to require absence from work.
Demonstrating value and appreciation to your employees could be achieved in several ways, such as gift vouchers on the celebration of long-service milestones, rewards on the accomplishment of set goals or nominations for stand-out employees at the end of the month/quarter/year.
3. Boosts overall performance
We can also link lower employee absence rates beneficially to organisational performance. If your absenteeism rate is high, less work is completed and the load is likely to fall on other colleagues, increasing their stress and lowering their satisfaction levels.
In fact, there are many risks to high absence levels. Let’s take the logistics industry as an example. If a worker is absent from work unexpectedly, a delivery may not be able to take place which will have a negative impact on the end customer. An agency worker may be hired in the employee’s absence to ensure the delivery can be carried out, but this is still an extra cost to the business which impacts the bottom line.
Putting absenteeism aside, there are other positive impacts of recognition and reward on the performance of an organisation. Research shows that 69% of employees are more likely to work harder if they are recognised for their work. Such a simple thing, yet through setting expectations for employees in a positive way – reward those who align with best practice and their peers will want to emulate that behaviour to gain the same reward and recognition.
4. Fosters valued, loyal workers
Going one step further than absenteeism, employees who feel undervalued and dissatisfied are more likely to search for another job. Organisations with poor recognition and reward are therefore more likely to have higher employee turnover.
Organisations who commit to regular recognition see a 31% lower voluntary turnover rate with nearly a third fewer employees leaving the business. It’s important, however, to ensure recognition is not a tick-box exercise. For example, many organisations claim they have a recognition programme that may only consist of long service recognition, meaning employees are recognised perhaps once a year or not at all if they haven’t reached a milestone.
Creating a culture where individuals and teams are appreciated will foster loyal employees. By reducing the likelihood of having lots of resignations and open vacancies, you’ll save money on recruitment costs and professional development will be easier to promote, helping your people progress into senior roles. Read about how Asda saved millions in recruitment costs by implementing a national recognition and reward programme in this case study.
5. Enables the 'ripple effect'
Treat employees positively and the impact will have a positive ripple effect within your organisation. Amazon, Domino’s and Walmart's recent large investments in reward and recognition and these business decisions do not go unnoticed. Whether it's through publicised news releases or word of mouth between employees and their family and friends, your organisation will start to benefit from this positive perception.
With time, regular recognition and reward will develop the perception of a company that values its employees and appreciates their contribution. Whilst this can be achieved through free recognition, adding monetary reward can be impactful if your budget allows.
Positive reflections on your company and its culture in this way will have a great impact on your employer value proposition (EVP). This will help you to stand out from competitors in the recruitment market and, for public limited companies, enhanced employee engagement is even proven to have a long-term positive impact on the share price.
6. Keeps the workforce motivated and engaged
When reward is aligned accurately with detailed and tangible goals, you will gain better commitment from your workforce. If they believe the rewards are set up fairly and goals are visible, they are more likely to be motivated to work harder to achieve the end goal.
In a survey of 9,400 business and HR professionals, 52% were dissatisfied with the alignment of their employer’s reward strategy with goals. These findings imply that businesses need to revisit how they set up goals in a way that will motivate their people.
For customers using the Rippl incentives, reward and recognition platform, there is a focus on ensuring goals are visible and clear through the incentives dashboard. One of our automotive clients, for example, publish quarterly product sales goals to the dashboard, allowing both managers and employees to keep track of performance, providing instant digital vouchers when goals are achieved.
Rather than offering static reward – such as a quarterly bonus based on sales performance – the ability to promote bespoke and relevant incentives throughout the year is more likely to inspire and motivate your workforce. What’s more, offering reward in this way allows you to be reactive to business goals, such as the need to shift excess stock or promote new products.
Whether you’ve been tasked with reimagining your company’s reward and recognition strategy or are simply beginning to recognise the need for improvements, there are plenty of benefits to a thought-out reward and recognition programme.
The benefits of recognition and reward are amplified when we consider working life post-pandemic. Where before, employees often sought acknowledgement for their work face-to-face, many will now seek appreciation more frequently due to distance or increased workloads.
It’s important that organisations realise that small investments in reward and recognition will have a long-term positive impact on employee satisfaction, employee turnover and ultimately, the bottom line. By treating the workforce how you wish to be treated yourself, the transition into the new norm will feel effortless and rewarding.