The way you reward people forms an essential foundation for effective people management. Money is by no means the only motivator of people, but too little money demotivates powerfully. Studies have shown that material reward is far more powerful than monetary.
1. How To Determine Levels Of Reward
To determine how much reward is appropriate, consider the question what level of employee reward will attract, retain, and motivate people of the calibre that you require. If an employee does something that results in a one-time boost for the company, a one-time incentive is most appropriate.
2. Why Give Employees Added Rewards In Addition To Wages?
Keep in mind that the main reason why you are giving an employee reward is because you want exceptional results, not comparable performance. Exceptional productivity will more than cover extra pay.
– Employee rewards should be set for noteworthy achievements
– Rewards must be related to a particular completion of a given task
– Employees should be encouraged to express their recent achievements
– Ensure the employee knows they deserve it, it will have a great impresion on their personality
3. Employee reward should never be an alternative for a reasonable remuneration scheme
This type of award should not be set as an enduring option to stable income amendments when, in fact, these changes should be carried out for constant and regular completion of tasks, excellent execution, and notable modifications in conscientiousness, or enhanced assessment of a status. Remember that employee reward is a one-time incentive program; therefore, it should be set out clearly and must be understood well by the employees so that they will know where to stand.
6. Employee rewards should not reflect the impression that these are changes to one’s basic pay
It must be set out clear to the employees so that they will not expect anything more than what they have to receive. Make it apparent that the extra pay is for special achievement only and nothing else. Generally, employee rewards may be in the form of cash incentives or non-cash fringe benefits. It could even be something of no real financial worth such as a personal letter of commendation.
7. Reward By Volume
If you have to use a monetary type of employee reward, give reward based on results. This means that the employee gets a fixed amount for a specific amount of results. In theory, this gives the employee the best incentive to maximize output. In fact, employees tend to put a ceiling on their earnings and thus on their effort. Nevertheless, the key concept here is that the management should only give an employee reward that is tied to an individual achievement. The reward must be reasonably large to have value – no one likes getting an overly small reward as it could have the opposite effect and make the employee view the company as cheap or undervaluing them. Never reward an employee for what has been accepted as a sensible objective. It should be given for extraordinary achievements only.