C&B Special: Make them hungry for more
Where end-of-year bonuses once stood as the gold standard, today’s reward programmes are more varied and reflect an organisation’s unique culture and creativity.
“From peer-to-peer rewards to gamification and front-row parking spots, the reward space is evolving with the speed of an Internet meme,” says Lisa Bodell founder and CEO of Futurethink, an innovation solutions consultancy.
“Your own incentive programme plays a key role in driving innovative behaviour, so it must serve your business goals while offering an array of aspirational carrots,” she adds.
With salaries under pressure, employers in Singapore have turned to bonuses based on performance to reward their top achievers this year, the recently released 2015 Hays Asia Salary Guide has revealed.
“Bonuses remain a favoured method of rewarding staff and a good bonus plan entails an incentive for good performance,” says Christine Wright, Managing Director of Hays in Asia. “This year, 51% of employers across Asia said they would award bonuses to more than 50% of their staff. In the majority of cases these bonuses are related to employee performance (80%) and employer performance (73%).”
“This shows that rather than give across-the-board salary increases, employers are using bonuses based on performance to reward their top talent,” she adds. “So as mentioned, the incentive element is very important in a bonus plan.”
In terms of the value of these bonuses, 44% of employers said they will award between 11% and 50% of staff salary as bonuses. Thirty-four per cent said bonuses will equate to less than 10% of staff salary this year.
In Hong Kong, bonuses are no longer a key deciding factor with regards to retaining banking professionals. According to the Hong Kong Banking Professionals Employer Retention Market Report, Hong Kong banks may need to consider changing their compensation strategies if they want to increase retention rates.
In fact, bonuses came seventh out of 10 options, in three of five survey questions covering why employees might leave, stay, or join a new employer.
Bonuses go creative
Employers in Singapore provide a wide variety of bonus schemes to their staff, says Wright.
“These bonuses depend on the nature of the industry they are in, and also the role they carry out,” she explains. “For example, back office staff in the banking industry will obviously be rewarded differently to front office staff.”
Two of the most well-known schemes are:
1 The quarterly performance bonus
This scheme helps to retain staff by always providing a bonus incentive. “Staff are less likely to leave when a bonus is due to be paid, and regular bonuses also keep staff motivated,” says Wright.
If employees are in a yearly bonus scheme and perform below expectations for a few months they might have the tendency to feel that they have missed their chance of getting a good bonus for that year.
“Quarterly bonuses mean that employees have a renewed chance to reach targets and receive a good bonus,” she adds.
2 Increasing bonuses
Some employers are simply offering to increase bonuses. “These schemes are not particularly innovative, but are very effective,” says Wright. “In the banking and financial services industries many employers have reduced bonuses in recent years.”
However, investment banks are once again starting to increase salaries and bonuses in order to reduce the resultant staff turnover.
“Bonuses can help motivate staff and increase retention,” Wright explains. “They ultimately reduce the costs involved in hiring and training new staff.”
Communicating bonus plans effectively
As you consider which incentives will be most impactful for your organisation, choose rewards that are in fair proportion to the scope of achievement.
“When you can pinpoint individual efforts — a winning idea, for example — it’s important to reward individuals,” says Bodell, who’s also the author of the best-selling book Kill the Company: End the Status Quo, Start an Innovation Revolution. “For accomplishments that can’t be attributed to one person — say, meeting revenue goals on a particular innovation — consider rewarding entire teams and groups.”
HR should ensure employee awareness about rewards and recognition for innovation by working with the PR team on a specific communication plan. “Outline the expectations (what is being rewarded) and if necessary, clarify changes to the existing programme,” says Bodell. “Keep teams motivated by bestowing rewards on a consistent basis.”
Lastly, check metrics regularly to determine if the plan is meeting your goals and fine-tune your programme accordingly:
- Are more innovative ideas being submitted?
- Has your market share on innovations increased?
- Have deadlines and budgets stayed on track?
“By taking a balanced approach to rewards and recognition, you’ll have the right type of carrots to measurably engage your employees on innovation,” Bodell concludes.
Non-traditional ways to reward innovative employees
Through working with the world’s leading organisations, the most effective reward programmes CEO of innovative solutions consultancy Futurethink Lisa Bodell has seen are a blend of compensation, gifting, recognition, and perks.
“Top innovators combine monetary rewards with recognition, and individual with team rewards in order to achieve a balanced programme, says Bodell.
As you design (or redesign) a plan that serves your organisation’s goals, consider these five approaches:
This typically translates to bonuses, cash-for-ideas, or stock options, although today’s innovators continue to expand the possibilities. When you need to motivate employees in the short-term, financial compensation offers a highly-effective route.
Gifting doesn’t necessarily have to be expensive, but creative gifts must carry enough perceived value to incentivise employees. Gifting is ideal for re-enforcing exemplary behaviours in the short-term, and also for fostering long-term loyalty.
3 Virtual rewards
The UK’s Department for Work and Pensions encourages ideas from employees through a gamification platform called “Idea Street.” Points are earned for submitting and further developing ideas.
Recognition enables you to publicly showcase employees who demonstrate the behaviour and performance that you want to cultivate. For long-term goals, this approach is often more effective than financial compensation.
Perks are rewards built into the overall work environment in order to attract and retain top talent, as well as increase long-term employee performance.