How To Define Your Purpose for Rewards in Your Programs

When I assist company leaders in creating a recognition strategy, I take them through defining and crafting a purpose statement and philosophy statement as part of their strategy design.

Essentially, I am asking them to answer the question, why are you doing recognition? 

WorldatWork asked the same question and received the following responses. These are the top seven of the 17 choices people had to select from. 

1.    Create/maintain a culture of recognition

2.    Create/maintain a positive work environment

3.    Reinforce desired behaviors

4.    Increase employee engagement

5.    Support organizational mission/values

6.    Motivate high performance

7.    Increase retention or decrease employee turnover 

You can ask the same “why” question about giving rewards, too. Why are you giving rewards if you are combining them in a recognition and rewards program? Not enough people stop to define their reasons or purpose for giving rewards besides recognition. 

Why Answer The Question? 

It is important to answer the question on the purpose for rewards, because with no rules and parameters, you get misuse of rewards by managers and employees alike. Such a void helps feed into the entitlement mentality of some employees wanting rewards all the time. 

The prime purpose of rewards is to increase people’s willingness to work harder for a company and to improve their productivity. 

Unfortunately, when rewards are unfettered people, use it like cash, whether points, pre-loaded debit cards, or gift cards, and some people will reward each other in a tit-for-tat fashion to benefit from the system. 

When there is a lack of opportunity for advancement or bonus increases are not in the offering, some managers end up using the rewards as a replacement for a bonus. Nice idea, but not what the rewards were intended for. 

Unfortunately, with no controls on the rewards and their actual purpose, some managers might become dishonest in who they favor rewards with, and then end up committing fraud.

This is such a shame. Rewards can be so beneficial when used the right way. 

Benefits of Rewards 

Rewards help create a temporary compliance to behavior or achievement of desired goals. Rewards were never intended to achieve long-term success.

Rewards create a great link to the performance that merited them only if the people giving the rewards accompany it with explanatory and praising communication. 

You should focus rewards on business objectives versus tasks. They provide guidance where an employee should focus their efforts and then reward their improved performance. 

Controlling of Rewards

Step 1: Define performance in actionable terms.  

What does the performance you want to improve look like operationally? It’s turning your strategies into goals and converting them into easily understood action statements.

Let me give you a poor example from a visit to a power company in the United States. Safety is an enormous concern in a power utility provider. They rewarded all employees with $50.00 gift cards for departments that submitted zero-accident safety reports.  

Yes, the gaming part of humanity crept in, and lots of employees received $50.00 gift cards. A minor accident was never written up so as not to prevent everyone from getting the reward. They were rewarding report submissions with zero-accidents recorded versus actual safe practices observed. Occupational Safety and Health Administration now prohibits such poor reward usage with safety programs. 

Step #2: Measure the right things with the right measures. 

Unlike the above example, rewarding safety should have you rewarding compliance with following safe practices throughout the company on a consistent level of success. In fact, the purpose of rewards and incentives with safety is to reduce workplace accidents and injuries. 

Look very objectively at how you will measure various performance outcomes. In the area of safety, you would be looking at measuring specific activities and precautions to improve safety. These could include compliance with reading and viewing instructional manuals and videos, or periodic evaluations of employees and departments. 

Incentives could also boost attendance at safety meetings and for soliciting suggestions from employees for improving safety in the workplace.

Step #3: Use the right rewards to reward the right things.

Over the years I have seen reward programs with the availability of multiple levels of rewards that have successively increasing currency value amounts. Managers have the option to choose from these various value amounts to give to their employees. 

However, the human tendency is not to appear too cheap. The next common behavior is to go middle-of-the-road and choose a higher reward amount. 

Take the example of a reward program that has nine levels which range from $10.00 right up to $450.00. Managers on average might select the $150.00 as their most common default reward amount to give to employees. But what is the purpose for their reward? Did the action or performance merit that reward value? 

Here’s where I recommend creating a criteria matrix or decision tree that helps managers evaluate the performance to match with the right value of the reward. 

Your criteria might look at the impact of the performance whether it was low, medium, or high impact on the business, or safety, depending on the program objectives. Was the action a singular, onetime occurrence, or was this a consistent behavior? Did the performance affect one person or many? These, and many other factors applicable to your work and culture, will determine the rank level worth of the performance and match it up with the appropriate reward level value.

Having these criteria helps managers think about their rewards instead of routinely giving them out willy-nilly. It helps everyone to give the right rewards for the right things.

Review of Rewards 

Besides defining what your purpose for rewards are in your organization, you may need to review the usage of rewards in your recognition and rewards programs. 

1.    Consider analyzing your existing reward programs and practices.

2.    Review, and revise if needed, your current reward principles to ensure they are aligned with your organizational culture and business practices.

3.    Review, and revise if needed, your current reward practices in keeping with generally accepted reward principles.

4.    Monitor and evaluate use of rewards through your reward programs on a quarterly basis to help prevent misuse of rewards.

Recognition Reflection: How do you monitor use of rewards in your recognition and reward programs to ensure they are equitable and appropriate?

Roy is no longer writing new content for this site (he has retired!), but you can subscribe to Engage2Excel’s blog as Engage2Excel will be taking Roy’s place writing about similar topics on employee recognition and retention, leadership and strategy.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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