Rewarding good work
Employee performance management can seem like an administrative overhead sometimes. Like any processes, unless there is practical meaning to it, it is hard to sustain, says Raymond Yip, Senior Manager – Group HR, Qian Hu Corp.
“Top to mid-management must clearly understand the need for a structured approach to performance appraisal of staff, and that how staff performances are graded equally reflects on how it is perceived to be executed by them,” Yip explains. “If the supervisors look at it as another administrative chore then staff will perceived it as just another academic exercise.”
Where staff members’ gradings are used to administer promotions and performance bonuses, it becomes a serious thing and the top management must hold supervisors accountable for their reports.
“Likewise, staff will have more faith in the system if learning and development needs are identified and followed through for career advancement within the organisation,” says Yip.
Still, HR can put in place the best employee engagement strategies in place, but without affective communication, it can only have limited results.
“Whether it’s communicating the value of pay and benefits through a total reward statement or providing regular face-to-face updates for the team, communication is key to an engaged and motivated workforce,” says Daniel Sherrington, General Manager – Singapore, Grass Roots. “Targeted, relevant and engaging communications are the foundation of a successful employee engagement strategy.”
Rewarding good performance
“For years, we’ve believed our best performers are also our most engaged employees and so we had little to worry about,” says Leadership IQ CEO Mark Murphy. “Not anymore.”
A recent study by Leadership IQ found that in 42% of US companies, low performers are actually more engaged than middle and high performers.
The logic is rather simple: In most organisations, low performers are pretty much left alone. They are as happy as clams because no one notices or bothers them. Top performers, on the other hand, are stressed out and feel undervalued despite making the most effort, with work often assigned to them because they are the only ones the boss can count on.
According to the survey, low performers were also more likely to recommend their company as a great place to work than were others in the organisation. Murphy says this can be a very scary prospect.
A separate study found that employee referrals were one of the top sources of talent, so if low performers are the people who are more likely to be the ones recommending their employer, then one should wonder who they are hanging out with and recommending their company to, he warns.
Murphy says HR should work on raising engagement levels for middle and high performers by first, defining performance expectations for everybody in the organisation – great performance versus good performance versus bad performance.
Employers should also hold people accountable to those performance standards. They should manage low performers and not avoid the difficult conversations, whilst differentiating and recognising high performers.
By appealing to the individual drivers and interests, a company can develop a reward and recognition strategy that motivates the masses. Many people come to work because of the rewards associated with the role, whilst others come and are motivated by what they actually do – ‘Extrinsic and Intrinsic motivation’.
“For many, simple public recognition for a job well done is worth much more to them than say a voucher or set of golf clubs, whilst others will be driven by the reward,” says Sherrington. “We are seeing much more evidence that the simple act of recognition without a reward attached, but done in a way that enables a public ‘well done’ can be far more effective than a monetary reward.”
“Also using learning and development, dinners with senior leaders and mentor programmes are becoming really popular in organisations that want to contribute back directly into an individual’s growth,” he adds.
At Qian Hu Corp, Work Improvement Teams (WITs) have been set up to attend to operational issues, set team targets and reward proportionately.
“While staff pay increments and bonuses are based on company and individual performance, we also have a award of a minimum of $60 to recognise creative and resourceful ideas implemented to help in the staff member’s own work area,” says Yip.
The company’s rewards structure consists of both monetary and non-monetary incentives. These include annual awards such as the Best Contribution Award, Best Improvement Award, and Innovation Award.
Recognising rank-and-file workers
While sales incentives have been around for years, the forgotten participant in most reward programmes tends to be rank-and-file workers.
First and foremost, management has to understand the needs of this group of personnel, says Yip “Generally, they are more geared towards monetary awards but there is always that ‘pat-on-the-back’ recognition and the big ‘thank you’ from a CEO or other directors that can have greater impact,” he explains.
“Top management must leverage on its HR professionalism to execute rank-and-file schemes to recognise the contribution of this important group of people within their organisation.”
Yip advises regular reviews as well as the development of creative approaches to give recognition to rank-and-file workers.
“Recognition, like celebrating special events in a unique location that is meaningful to the employee, goes a long way,” he suggests.
“Likewise, HR personnel should always keep communication channels open with staff on the ground to better understand their needs and issues.”
Danger: Over-rewarding staff!
There’s also always the risk of “over-rewarding” or “over-paying” staff for their performance.
This is where the value of separating reward from recognition is really powerful, says Sherrington. For example, during the Global Financial Crisis of 2007-2008, many companies slashed their reward budgets but still wanted to engage their staff.
“There was a switch to focusing on recognition and removing the reward element, and we found that employee engagement scores went through the roof,” Sherrington explains.
“This was a big win for companies because they were able to reduce their spend on reward whilst increasing engagement, just by adopting the simple yet affective process of building a recognition strategy and taking the focus off rewards, which also dealt with the double dipping, or over-compensating.”
Managing is more an art than a science, says Yip. “While we need science like statistics to make certain decisions or justifications, over the years, I have learned that it is very dangerous to base a business decision solely on hard data.”
Therefore, it can be hard to say how much reward is too much or little. “There are always the soft, hygiene factors that are more important,” Yip explains. “It is better to be slightly under-rewarding and close the gap by offering other non-monetary rewards, with an emphasis on hygiene factors.”
“It is (also) better to have a case of hungry employees than over-satiated ones,” Yip concludes. “Depending on the business and the industry you are in, management has to strike a fair and reasonable balance.”
|Rewarding on a budget|
Author of several books including ‘Employee Engagement 2.0’ and the NY Times, Wall Street Journal and USA Today bestseller, ‘We: How to Increase Performance and Profits Through Full Engagement’, Kevin Kruse, shares 25 zero or low-cost ways to recognise employees: