In an increasingly competitive market, reward professionals are tasked with attracting and retaining top talent in their respective firms. An aspect of reward which is receiving a lot of attention is the notion of recognition. We spoke to a number of reward professionals to ask what changes they were looking to implement in order to adhere to the boom in recognition philosophies across the UK.
One recurring debate is centred around the worth of cash incentives – although a prevalent tool for rewarding employees in the past, many organisations are now moving away from this approach. A Global Head of Reward recently joined a software firm to review the firm’s recognition scheme which historically relied on the motto “cash is King!”. Good performance or behaviour reflective of the company’s core values were recognised by line managers with a discretionary cash nomination. Our contact argued that although using this method was quick, simple and transactional, often a ‘one size fits all’ approach de-values individual employees' success stories. Managers would apply cash incentives indiscriminately without differentiating between their employees, therefore being unable to showcase and reward high performers in a unique way. Cash would merge with the employees’ pay packet and disappear into their bank account without gaining the benefit of engagement and recognition from the employee. Our contact stated that in 2017 the spotlight will turn to reforming recognition.
Turning to other approaches, peer-to-peer recognition is a great platform from which employees can recognise and reward each other. A Group Head of Benefits from within the retail space outlined how their organisation allows employees across stores to go online and assign points to colleagues for helping them and to recognise their achievements. These points convert to vouchers which can then be spent in any way the receiver chooses. However, whilst it was noted that this points system is popular amongst the retail staff on the ground, the system doesn’t translate so well to corporate functions. As a result, the company is in the middle of redefining their recognition strategy, exploring new ways to incentivise all parts of the business. Our contact highlighted the importance of harnessing mobile technology such as iPads and apps to make a spontaneous peer nomination possible. In addition in keeping up with trends and the appetite to cater to millennials, their company allows employees to pick and choose how they receive their incentives by offering shopping vouchers, the options to buy company shares and other flexible benefits.
As more and more companies are investing in this space and outsourcing the task of developing compelling reward packages, recognition consultants are increasingly in demand. One consultant we connected with stated that companies still don’t seem to get recognition right – companies are more than willing to express gratitude, but most lack the know-how in how to go about this. Our contact also commented that, it’s not just what you receive from your organisation but how you receive it, that can make all the difference. Getting a letter from your boss which nobody sees is very different from receiving a round of applause in a monthly meeting or receiving an internet mention in the public domain. Arguably employees who receive this kind of positive attention would want everyone to be aware of their success, but that can be very subjective and differ from one person to another. Some people may not want to be paraded in front of the business (albeit for positive reasons) and would rather receive a private ‘thanks’ and slap on the back from their boss. In which case, the way in which staff receive recognition may be important, but there may not be a one-size-fits-all approach.
In summary, organisations are dedicating more attention to staff recognition and realising that simple tokens of gratitude don’t need to be costly, yet can form a powerful part of a reward strategy. As firms look for new and creative ways to reward their workforce, we expect to see many more tailored forms of recognition which really cater to personal preference.
If you are interested in discussing any of the themes above, or would like to catch up on a wider basis please drop me a line.