Gone are the days where a simple pat on the back and an annual bonus would win over employees. Leaders need to understand that they need to put in a lot more thought and effort into their rewards & recognition strategy in order to gain the loyalty of their workforce.
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I was at a party last week to bring in the New Year with my family & friends. There, I had the opportunity to catch up with few of my acquaintances from college. As we sat around the table, sharing updates from our lives, Swara mentioned that she was going to pursue an MBA degree.
"Oh wow...," responded another acquaintance to that. "Does that mean you'll be looking to switch jobs in the near future? I never thought you would quit working for XYZ."
"Actually, I'm not quitting. I'll be taking a sabbatical till I finish the course. I plan on rejoining XYZ at the end of my MBA," Swara replied.
"But why wouldn't you want to apply to other organizations? I hear ABC pays their MBA campus hires really well compared to XYZ." he asked.
"Well, XYZ really did me a solid by sponsoring my fees for the MBA. I wouldn't have been able to afford it otherwise. So I can't see myself working for another organization when XYZ has done so much for me." she shared.
Why Traditional Rewards & Recognition Practices Don't Work Anymore
If you were to talk to someone who was working during the 1940s to the 1980s, and ask them what their company did to thank them for their effort and loyalty, they would probably talk about availing low-interest loans, receiving annual or festive bonuses, and other monetary rewards. It is only during the last few decades that organizations have shifted their focus from merely rewarding to recognizing their employees.
It is now common practice in many businesses to publicly acknowledge the contribution of high performers in daily / weekly / monthly rituals (e.g. Salesperson of the Week) and significant events such as "Employees Day". While these are essential to keeping the workforce happy and satisfied, we have reason to believe that more can and should be done.
Scratching Each Others' Back
Just as organizations expect their employees to be invested in the growth and well-being of the business, employees are increasingly expecting the business to be interested in their development.
XYZ invested in Swara's professional development by sponsoring her higher education. By spending approximately 16 Lakhs on an employee, XYZ managed to retain a high-performing employee, upskill her, and generate positive word-of-mouth publicity both internally and externally. It also was able to send out the message that it is invested in its employees ' development thereby encouraging other employees to work hard as well. I'm no Math genius but I think in Swara's case, XYZ gained a lot more than it spent on her.
New Ways to Reward & Recognize Employees
Organizations need to come up with new ways to reward & recognize their employees. While we do not recommend doing away with the traditional ways, we do recommend the addition of some of these alternatives in order to keep employees happy and satisfied. The alternatives include:
Flexibility in Work Timings
By rewarding employees with the flexible work timings, employees can enjoy greater freedom in pursuing other personal interests. Having creative pursuits which aren't entirely vocational in nature can help employees destress and perform better at work.
Remote Working Options
Remote working options help employees to save commute time and also spend more time with their family. By having a positive work-life balance, there is a reduced risk of burnout in professionals.
Sponsorship of Courses / Certifications aligned to Professional Goals
Allowing employees to pursue individual professional goals is a great way to establish loyalty and dedication. By sponsoring such courses, organizations will be able to retain their talent better as well.
Workplace autonomy
Greater autonomy at the workplace is an indication of high levels of trust between the organization and individual. This will also foster greater accountability & respect while boosting productivity.
Providing Mentoring / Coaching
By providing mentoring and coaching to high-potentials, organizations can reap many benefits including improved performance, collaboration and leadership skills.
Awarding extra vacation time
Many organizations provide compensatory time-off but few award discretionary vacation time to their employees in lieu of above-average achievements / contribution. Such a policy will undoubtedly boost productivity in the workplace.
