A GUIDE TO REWARD AND RECOGNITION IMPROVING PERFORMANCE BY SHOWING YOUR APPRECIATION

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2 02 HOW MOTIVATED ARE YOUR EMPLOYEES? The definition of motivation is explained as: Desire or willingness to do something; enthusiasm. Are your employees enthusiastic and show a willingness towards completing their daily tasks? Desire or willingness to do something; enthusiasm. By understanding how to use motivation and rewards to improve performance, you can improve your business s productivity, quality, and service. You will also create a work environment that will empower and focus your staff to perform to the best of their ability, whether it s increasing sales or improving customer service. It is generally accepted that engaged staff are productive workers, which means that there are many benefits to having motivated employees.

3 03 HOW CAN I MOTIVATE MY STAFF? Find out what will motivate them Before implementing any sort of reward scheme, you need to understand what motivates your employees after all, everyone is different, and each employee will have their own likes, dislikes, interests and hobbies. Communicate The best way for an employer to know what motivates their staff is to ask them. You can ask them to complete a questionnaire to get an idea of what s important to them, or sit down oneon-one to discuss it. Simply asking for their input can be enough to motivate some employees to work harder, because it will help them feel that they are contributing to the team and the business, and most importantly, being listened to. You may take it one step further by offering a specific programme, where employees can provide recommendations to improve company policies or the workplace as a whole. Show your appreciation It is vital that, as an employer, you acknowledge the positive behaviours and achievements of your staff. Let them know when they have done a good job, and encourage them if they are struggling. A simple well done or thank you goes a long way towards increasing motivation. Employees will realise that the work they do is really valued and making a difference to the business. You should be constantly looking for ways to recognise excellence and outstanding performance in the workplace. This may be through a one-off reward, promotion, or you may opt for a low cost but high impact companywide employee recognition scheme. These schemes are a really effective way for businesses to engage their employees and thank them for the work they have done and best of all they don t have to be expensive to implement. Define their role Employees want to be valued, and to feel that they are contributing something to the business. By clearly defining an employee s role, you are providing context for everything they do, and ensuring they feel a sense of purpose while at work. Ultimately, an employee needs to understand how the job they do contributes to the overall goals of the organisation, and where they fit into the bigger picture. If your employees feel they are working together in alignment with the organisation s mission and strategy, you will create a more positive, motivated and productive work environment.

4 04 WHAT REWARD STRUCTURE IS THE MOST APPROPRIATE? The structure of the reward and recognition scheme has to fit the culture of the company as well as any budget restraints. Would your business suit a peer to peer recognition scheme, or a manager lead programme? Many recognition schemes are relatively cheap to implement and maintain, using an online platform through which employees can recognise their peers. The nominated individual can then view their recognition as an e-card or online message. Alternately a simple voucher award scheme could be more suited to your brief and the demographics of your business. Voucher Cheques can be awarded to chosen individuals, giving them a choice of which retailer vouchers they would prefer, ensuring the best reward for them. CASE STUDY To celebrate 10 years of internal reward and recognition p&mm launched an all new recognition programme for staff THE BUZZ. Engaging staff A teaser campaign began a month before the programmes official launch to build anticipation and excitement using e-comms and posters. New Year, new programme more choice The new programme gives all staff the ability to recognise their colleagues with 3 levels of recognition, offering something every occasion: A simple e-thank you Monthly nominations Annual nominations The site offers a user friendly and fun platform with: Individual and team nominations Quick and easy search facility, providing a list of people each with a photo next to them, their job title and area of the business, making them instantly recognisable E-card designs with dynamic content Preview facility allowing participants to check the recognition before sending Photo upload facility adding a more personal touch and providing a support tool for new starters Hall of fame, which showcases the monthly winners with the option to click for full details Rewards linked to p&mm s reward banking solution Adjudication panel allowing the recognition committee to review the nominations online

5 05 WHAT IS THE BEST WAY TO REWARD STAFF? Be sure to introduce an appropriate reward scheme that takes into account all of the following elements: Relevant reward The reward being offered needs to appeal to all employees, but doesn t have to be costly. This can be a tricky decision to make. You need to offer choice an effective and simple way to do this is to offer a selection of vouchers, for example. This is a great way to give an aspirational award that is tailored to each individual s tastes, as long as it is communicated effectively and personalised to the individual. Little and often A reward doesn t need to cost the earth. A card or even an to say thank you for a job well done can be highly motivational. Regular, lower value rewards will have a greater impact on productivity than large end of year incentives alone. Rewarding little and often will keep up the momentum throughout the year and be a regular reminder that the scheme exists. Cash is not king Cash is a short-term motivator, and a pay rise may not achieve the long term performance improvement required. Performance driven rewards and possibly offering additional perks through a company benefits scheme, (such as gym membership, corporate discounts, childcare vouchers and holiday schemes), will have greater impact on the motivation of employees. Provided of course, that the basic employment package is on a par with competitors. Achievable awards Awards need to be achievable to all, not just high performers. There is more to be gained by motivating middle tier staff than those already performing to the best of their abilities. Depending on the culture of your company, it could be worth introducing a scheme whereby colleagues can thank each other, rather than it being down to Managers to recognise their staff. Goals need to be realistic but ambitious.

6 06 HOW TO ENSURE THE CHOSEN SCHEME STAYS ALIVE Communication, communication, communication! It is imperative that any chosen scheme is communicated using the most appropriate media, marketed in the right language and on a regular basis to those employees it is aimed at. There is no point in having a flashy launch if it is not communicated constantly thereafter. Employees need to be engaged throughout the scheme. Employees need to be engaged throughout the scheme and always kept aware of what they need to do to achieve their reward. Details of the scheme should be easily accessible to all, for example on the company intranet site. Regular reminders need to be sent to keep employees engaged and to celebrate successes, perhaps through weekly newsletters or even displayed on notice boards around the office. Segment your communications to ensure relevant messaging is delivered to individuals. There is no benefit in promoting a top performers year end reward to someone who is underachieving, here focus instead on performance improvement messages and education. HOW MUCH WILL IT COST? The chosen solution needs to fit within your budget as well as achieve what you want it to. The cost of implementing a reward scheme needs to outweigh the cost of your staff turnover. It costs in excess of 30,000 in some industries to replace a staff member (including recruitment fees, training and a significant drop in productivity over a sustained period). Reward and recognition schemes can vary greatly in cost, from a simple voucher based scheme to a thank you campaign where rewarded employees receive an e-card, to an all singing, all dancing online social network solution. The chosen solution needs to fit within your budget as well as achieve what you want it to. Typically organisations allocate 2-3% of their payroll budget to a recognition programme, however the best option is to talk through your end goals with a specialist agency who will be able to send you a full proposal.

7 07 HOW WILL I KNOW IF IT IS A SUCCESS? The most important factor when trying to work out whether a scheme is succeeding is to ensure that the targets set at the start are measurable what do you want to achieve? For example, has there been an increase in sales or a marked improvement in engagement scores since the launch of the scheme? Motivating your employees is vital to any organisation and should be a key objective in your business plan. The programme needs to change behaviour are employees now more motivated? A questionnaire could be sent out to ask employees opinions to see whether they feel that the new programme has been a success. This will make them feel valued, help engagement and could be a motivating factor in itself. Whatever scheme is chosen, it is imperative that it is regularly reviewed and revived to keep it alive, and to make sure that employees (and ultimately your business) reap the rewards. Motivating your employees is vital to any organisation and should be a key objective in your business plan. A motivated workforce is a highly productive workforce with happy customers, which ultimately will help your business achieve its goals. WHAT RESULTS CAN YOU EXPECT? There is a large body of evidence demonstrating the results that can be obtained by implementing a well structured staff reward scheme. Improved job performance Gallup found that engagement levels can be predictors of sickness absence, with more highly engaged employees taking an average of 2.7 days per year, compared with disengaged employees taking an average of 6.2 days per year. A Corporate Leadership Council report found that highly engaged organisations have the potential to reduce staff turnover by 87 per cent and improve performance by 20 per cent. A Watson Wyatt study reported that the highly engaged are more than twice as likely to be top performers almost 60 per cent of them exceed or far exceed expectations for performance. Towers Perrin found that broadly three-quarters of the highly engaged believe they can impact costs, quality and customer service; whereas only 25 per cent of the disengaged believe they can.

8 08 IN NUMBERS % Highly engaged employees take an average of 2.7 sick days per year. Disengaged employees take an average of 6.2 sick days per year. Highly engaged organisations have the potential to reduce staff turnover by 87 per cent. Almost 60 per cent of highly engaged staff meet or exceed expectations. Only 25 per cent of the disengaged believe they can impact costs. Customer satisfaction PricewaterhouseCoopers, who use staff and customer engagement levels as one of their four Key Performance Indicators (KPIs) have found a strong correlation between highly engaged staff and client satisfaction. IES in their study From People to Profits found a link between employee satisfaction, customer satisfaction and increases in sales, based on a study of 65,000 employees and 25,000 customers from 100 stores, over two years. A study conducted by NBRI at a large Financial Service organisation found that a five point improvement in employee attitudes led to a 1.6% rise in customer satisfaction. Financial returns The Corporate Leadership Council reported that engaged organisations grew profits as much as three times faster than their competitors. A global study carried out by Towers Perrin-ISR 50 compared the financial performance of organisations with a more engaged workforce to their peers with a less engaged workforce over a period of 12 months. The data comprised of 664,000 employees from 50 companies, of all sizes, around the world, representing a range of different industries. Engagement was measured alongside more traditional business performance measures such as operating income, net income and earnings per share. Towers Perrin-ISR s findings included the following: Those companies with a highly engaged workforce improved operating income by 19.2 per cent over a period of 12 months, whilst those companies with low engagement scores saw operating income decline by 32.7 per cent over the same period. Those companies with high engagement scores demonstrated a 13.7 per cent improvement in net income growth, whilst those with low engagement saw net income growth decline by 3.8 per cent.

9 09 Gallup research for a UK retailer with 174 stores in a study over two years concluded that stores that improved engagement year on year grew their profits by 3.8 per cent. Stores that did not improve their engagement saw their profits decrease by 2 per cent. Hay Group in their publication Engage Employees and Boost Performance concludes that engaged employees generate 43 per cent more revenue than disengaged ones. Companies in the Best Companies to Work for in the period increased their turn-over by 94 per cent and their profits by 315 per cent. A Watson Wyatt study of 115 companies suggested that a company with highly engaged employees achieves a financial performance four times greater than companies with poor engagement. IN NUMBERS 32.7% 13.7% A highly engaged workforce improved operating income by 19.2 per cent. Companies with low engagement scores saw operating income decline by 32.7 per cent. High engagement scores demonstrated a 13.7 per cent improvement in net income growth. Low engagement saw net income growth decline by 3.8 per cent. Companies in the Best Companies to Work for in the period increased their turn-over by 94 per cent

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