The Business Case for Employee Recognition and Rewards

Compensation Cafe

Why do we compensate employees? But compensation professionals (and readers of this blog) know the pay cheque is but one part of a very complex agreement between employer and employee to maximize a mutually beneficial relationship. Career-change opportunities within the company to keep employees on board while diversifying capabilities. Not all employees are suited for internal career changes, even when those opportunities exist.

Talent and HR News Weekly Update: Employee Recognition Trends

exaqueo

“People work for money but go the extra mile for recognition praise and rewards.” This week’s curated articles will get you thinking more about employee recognition and its link back to productivity, retention and more. 1) Trends in Employee Recognition from HR Trend Institute Employee recognition programs, once considered a “nice” but non-essential component of human resources, have changed dramatically over the past five years.

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Is “Annual Incentive” a Contradiction in Terms?

Compensation Cafe

Many organizations rely on pay for performance programs to help drive employee behavior. In the best cases, these schemes are designed to differentiate among performance levels, rewarding effort and results with annual merit pay increases and other annual incentives. The results from a recent Willis Towers Watson survey suggest only 20% of organizations find that merit pay is an effective driver of individual performance, while 50% say the same of their annual incentive programs.

The Tricky Business of Incentive Compensation

Compensation Cafe

The impact of these changes can be felt throughout the organization, from senior leadership teams responsible for successfully planning around those challenges to the front-line employees who adapt their roles and deliver on those plans. One solution has been to implement incentive compensation or “pay for performance” plans. Do all managers always take more risks when offered incentive compensation?’”. Compensation Philosophy Incentives/Bonuses Recognition

Cafe Classic: Competition Is Good, Except When It’s Not - The Difference between Incentives and Recognition

Compensation Cafe

Editor's Note: Incentives and Recognition are key elements of a total reward portfolio, but they work in different ways and are better suited to different purposes. I’m often asked, “What’s the difference between incentives and recognition? Incentives and recognition are two distinctly different mechanisms that can be used to boost employee productivity, but each has its proper place and time for use. Ensure Incentives Remain on Track.

Promotions, Bonuses, Raises, Recognition - When They Work (and When They Don't)

Compensation Cafe

You can’t give all employees promotions, bonuses, or raises. Social recognition, however, can be applied to all. In perhaps a worst-case scenario, promotions are little more than title changes in which the employee’s job duties change little if at all with no pay increase. It’s not a positive experience for the employee. But let’s be realistic about recent trends – at most, the majority of employees are receiving the equivalent of cost-of-living increases.

Cafe Classic: Empowerment is Great, But Make Sure You Have These Things First

Compensation Cafe

Editor's Note: Employee empowerment can be powerful and positive, but only if you have the right "scaffolding" in place to support the success of those empowered employees. It tells the story of a sales organization that ran an experiment in employee empowerment.

Cafe Classic: 3 Steps to Get Even More Value Out of Compensation

Compensation Cafe

Yes, compensation is a contractual agreement with the employee: X amount of pay for Y amount of work. In this context, compensation can be an integral element of how you focus employees and communicate to them your strategic goals. Editor's Note: Pay dollars are tight these days.

Cafe Classic: 3 Tips to Increase Intrinsic Motivation with Recognition and Rewards

Compensation Cafe

Derek Irvine addresses this fallacy and provides us with solid, research-grounded advice on how we can use our recognition and reward tools to influence how employees do their work in a meaningful and positive way. 3) Be sure to convey why recognition and reward is being given. “A

Why Potential Rewards Matter More at Work than Fear of Punishment

Compensation Cafe

What motivates employees best? Or perhaps how employees feel about their work? First, published last week, research summarized in “What Motivates Employees More: Rewards or Punishments?” On the other hand, expectation of reward (promotion, recognition, bonus) triggers a response deep in the mid-brain to take action, to advance. The better employees feel about their work, the more motivated they remain over time.”. Incentives/Bonuses Recognition

3 Reasons Why Metrics Go Wrong

Compensation Cafe

As Globoforce’s Vice President of Client Strategy and Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition , leading workshops, strategy meetings and industry sessions around the world. Incentives/Bonuses Pay for Performance Performance Management

LifeWorks

     

Cafe Classic: Choosing the Right Currency for Compensation & Rewards

Compensation Cafe

If you polled your employees and asked them, “What kind of rewards would you prefer?”, But what employees say they want for rewards, what actually works best to motivate employees, and what employees enjoy as rewards are entirely different things. Recognition and rewards requires an entirely different currency. Compensation and Recognition Rewards Are Different. A Vast Selection of Rewards Works Better than One Incentive Goal.

Including Meaningful Work in the Total Rewards Package

Compensation Cafe

I’ve been consulting with organizations on how best to structure – and fund – social recognition programs to create a culture of appreciation and gratitude in an organization for a couple of decades now. During those years, a consistent question on recognition program design was, “Why not just give cash awards? Recognition needs a different currency. Simply put, no matter how much cash employees receive (in a mix of base pay and bonus), it’s never enough.

Using the Corporate Tax Break to Your Best People Advantage

Compensation Cafe

That, in addition to the tax break for corporate money repatriated overseas, means many companies are looking for ways to pass the benefits of the cut on to employees. To date, more than 260 companies have announced one-time bonuses for employees out of the expected return. Indeed, Mercer is reporting 32% of employers who responded to a survey on the topic expect to spend some of the corporate income tax savings in employee rewards. Incentives/Bonuses Recognition

Why Wait? Timely Rewards Deliver Increased Intrinsic Motivation

Compensation Cafe

How does this impact the way we think about total rewards in an annual (or even quarterly) bonus structure? As we learned from Teresa Amabile’s “ Progress Principle ” work several years ago: “We found that the most important indicators on employee engagement [were] not things that most managers think about. Timely rewards indicate to people both of these factors – that the work they are doing is meaningful, valuable, and worthy of recognition.

4 Keys to Leadership According to Jack Welch

Compensation Cafe

To be a good leader for your employees, one needs to be rich with your praise, cheer them on, love to watch them grow and be excited about their success. You need to love to give bonuses. But more to the point, in the first quotation above, Mr. Welch highlights nearly every important element for engaging employees: Frequent, timely praise and encouragement. Above-and-beyond bonuses available to any level of employee. First and foremost is employee engagement.

3 Innovative Compensation Ideas Ready for Prime Time

Compensation Cafe

They change employee commitment to their colleagues, their customers, and their company. After completing the 90-day new-hire training period, Zappos needs to know its newest employees are all-in. Indeed, Amazon doubled down, offering fulfillment center employees $2,000 in their first year to quit, increasing the offer $1,000 every year to a maximum of $5,000. Compensation Philosophy Incentives/Bonuses Pay for Performance Recognition

Why Appreciating the Labor of Others Matters

Compensation Cafe

Material incentives like bonuses…quickly lose their punch… When you rely on “stuff” to feel satisfied, you have to keep upping the ante because whatever you get becomes the baseline. He is the co-author of "The Power of Thanks" and his articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Incentives/Bonuses Recognition

Cafe Classic: Balancing Process and Outcomes – How “Silo” Thinking Can End Up Rewarding the Wrong Thing

Compensation Cafe

Organizations that implement employee recognition and reward programs usually do so with the best of intentions. Avoiding silo creation and balancing process and outcomes are the two critical areas to always keep in mind in recognition and reward program planning. The Fix: Avoiding silo creation requires deliberate, intentional action to refocus attention of all employees, at every level and in every function on overarching organizational goals, strategy and values.

Living Wage vs. Pay for Performance

Compensation Cafe

Yet in some industries, especially those where labor is perceived as a cost and not an asset, more emphasis is put on incentives or bonus in a pay-for-performance model targeted to the higher order needs before fulfilling the base pay requirements for achieving the security of the foundational needs. As this article illustrates, Walmart has moved away from its low-pay reputation to working to raise the minimum wage of its own workers (average for full-time employees now at $13.60

When Irrational Humans Make Good Decisions

Compensation Cafe

That statement alone could fuel many long conversations, but the simple truth of it is often something we ignore when thinking about how best to support our employees in bringing their own best selves to work every day. The implications could be wide ranging, from helping employees adopt healthier habits to increasing their happiness and productivity at work.”. Gino continues: “Consider how simple interventions can increase employee happiness and productivity. News flash.

Cafe Classic: Celebrating Success. Who Do You Reward?

Compensation Cafe

It's time to take down the these false barriers to recognition and reward. I’m told this is standard in Pixar movies and one reason they usually include a “secret scene” at the end – to ensure everyone involved in creating their award-winning movies receives the recognition they deserve. I know of no other studio that does this, and it’s a hallmark of Pixar’s strong culture of recognition. Compensation Philosophy Incentives/Bonuses Pay for Performance Recognition

Cafe Classic: Unions, Recognition and Employee Engagement

Compensation Cafe

Editor's Note: Today's Classic features Derek Irvine with some data and insights about the importance of employee engagement - even (and some might argue especially) in a union environment. The reality of unions is they came into existence to protect employees where company leadership refused to. Regardless of industry or job role, unions rose up to defend employee interests, even the most basic such as the right to survive a day’s work.

Where Have All the Raises Gone?

Compensation Cafe

Last month The New York Times ran an article bemoaning the loss of pay raises in favor of one-time bonuses and non-monetary rewards. Cited in the article, analyst firm Aon Hewitt calls this a “drastic shift” based on the firm’s annual survey on salaried employee compensation. Aon Hewitt did not even start tracking short-term rewards and bonuses — known as variable compensation — until 1988, when they accounted for an average of 3.9

Will Keeping SCORE Help You Keep Top Employees?

Compensation Cafe

How do you measure impact of efforts to improve employee satisfaction, engagement and retention? According to the article, SCORE stands for the primary employee concerns in the engagement and employment contract: Stability, Compensation, Opportunity, Responsibility, Environment. I understand the author’s point, but I don’t think we can so easily discount the importance of Stability and Compensation to high-performing and high-potential employees.

Fair Pay, Differentiated Rewards

Compensation Cafe

Let these employees shadow their VP for a day or two including any meetings with clients and top management. Torkornoo agreed that merit pay methodologies are “anachronistic relative to rewarding performance,” offering ideas for effective recognition: “Beyond attending as well to non-cash rewards that provide a balance of 'total rewards' aligned with your employee interests / values, we need to focus on the things that help high performers (individuals and teams) do their thing.

1% of Payroll: The Magic Number For Social Recognition Investment

WorkHuman

Why do some recognition programs take off with widespread adoption, while others struggle to gain traction or make an impact? The problem is not that some work cultures don’t need recognition – appreciation is a basic human need. One challenge many companies face is that executives, and sometimes even HR leaders, perceive recognition as a cost as opposed to an investment. What about “free recognition” or “e-thanks”? Check out the e-books Annual Bonus, Annual Waste?

The Recognition Science Denier

WorkHuman

She started our meeting by saying, “Of course, I know what recognition is. It’s a soft, feel-good program that employees seem to like and a necessary expense today. She was a “Recognition Science Denier.” But by the end of the meeting, our conversation had shifted from recognition as a cost to recognition as an investment – in culture, and employee experience , retention , and engagement. “We Do you work with a Recognition Science Denier?

Chasing Best Practices

Compensation Cafe

It turns out that high performers are more likely to provide pay increases (90% compared to 84%), bonuses (81% compared to 74%), and are also likely to leverage more of a compensation mix. At first glance, companies that want to achieve better performance may be well advised to adopt some of these practices, and start distributing more increases and bonuses as well as explain the reasons for those investments.

Healthcare HR and Employee Retention: 6 Key Factors to Consider

Precheck

Healthcare HR and Employee Retention: 6 Key Factors to Consider Nov. One of the largest growing concerns among employers across all industries is retaining high-performing and high-potential employees. In fact, 46 percent of HR professionals cite employee retention/turnover as the top workforce management challenge in 2016, an increase from 25 percent in 2012. signing bonus) and offering new job perks,” the report s states. Staff Recognition.

Is Pay a Critical Part of Culture or Not?

Compensation Cafe

Employees that took that survey were asked to rate the three most important attributes of workplace culture. The number one answer from 50% of those employees: pay. But for the most part, I am surprised that so many employees point to pay as the most important part of culture. Much more fitting with our intuitive expectations of the key drivers of culture, but findings the report refers to as “striking out” in terms of not aligning with the employee perspective.