All business establishments and companies have specific goals and objectives. However, not all businesses are successful in achieving their respective goals. So, what’s keeping businesses from achieving their business goals?
There are a number of factors that may be considered in analyzing how to run a business. Underperforming employees may be easily pointed out as one of the major roadblocks in running a successful business. Employees who do not perform well or do not properly execute a task on hand can contribute to a business’s downfall. Employees’ performance affects all aspects of the company: sales, customer service and productivity in general.
Conversely, employees that work well and perform assigned tasks properly contribute to the success of the company. Having top-performing employees means good customer service, and good customer service means high sales and high productivity. In short, top-performing employees are an asset to the company.
Need of an Employee Reward and Recognition Program
So, what is the key to having well-performing employees?
One factor to be considered is the skill of an employee. However, hiring an intelligent and talented employee is just part of it. Performance does not depend solely on one’s skill or talent. Interpretation depends upon motivation. Yes, you may have a very qualified employee or even an overqualified one. But without the right motivation, such an employee may not perform as expected from him.
One of the basic principles of economics teaches us that people respond to incentives. People make decisions based on the benefits or detriments they will receive. Let us say, for example, when the price of a well-known product rises, and consumers will turn to cheaper, inferior products to cover their needs.
In the workplace, rewards and recognition systems boost employees’ morale and productivity. It motivates them to do more to receive more. It may sound like a simple concept, but many businesses fail to integrate an employee reward and recognition program.
What are the benefits of an incentive program?
In a study conducted by Dr Harold Stolovich, incentive programs can increase employees’ performance, interest in work and attract quality employees.
Incentive programs can increase employees’ performance if selected correctly and implemented adequately. Incentive programs improve employees’ performance by an average of twenty-two to forty-four per cent. On the other hand, team incentives can increase employees’ performance by as much as 44 per cent.
In Dr Stolovich research, results show that incentive programs increase employees’ interest in work. The increase in interest in works ranges from fifteen to twenty-seven per cent. Furthermore, according to the study results, work performance increased by 15% when programs were offered to complete a task.
When employees were asked to persist toward a goal, employees’ increased their performance by 27 per cent when encouraged by incentive programs.
Why does recognition and rewards program matter now?
Burned–out employees poised to jump from one company to another. Employee turnover is not suitable for business as employee turnover is expensive. While some turnover may be considered a regular occurrence in a workplace setting, poor management can turn an average level of turnover into an excessive one.
Based on the U.S. Bureau of Labor Statistics, turnover can cost an organization 33 per cent of an employee’s total compensation, including wages and benefits. Excessive turnover level does not only affect the company financially. It also has a significant impact on the employees’ morale. Employees’ poor morale causes a domino effect that directly affects effectiveness and efficiency.
Business organizations must reduce turnover rates. To decrease turnover rates, business owners and managers must understand the underlying reason why employees leave for other positions.
One of the main reason employee leave their current job is because they feel undervalued. Everyone wants to be recognized for a job well done. Recognizing employees is an effective way to communicate appreciation for the positive effort.
Another common cause of employee turnover is a lack of growth opportunities. A lot of talented employees can be lost if the employees feel boxed–in dead-end positions. Conversely, employees are more inclined to stay with an organization if they can see a potential for growth and comparable compensation.
What are the ways to keep your employees motivated?
There are a lot of forms of rewards and recognitions. Incentives may be in the form of cash or just a simple thank you. So, here’s a list of incentives that can keep your employees motivated:
1. Social events and gathering
All work, but no play makes a person a dull employee. A company should ensure that employees should strike a balance between life and work. Most employees want to unwind and relax after a tiring day or week of work. Company outings and events will give employees something to look forward to in the office apart from their routine tasks or work. It will also build camaraderie among employees and strengthen the boss-subordinate relationship, which will increase teamwork and job performance.
2. Cash incentive
They say money can buy everything. Although not all may agree with this saying, it sure will keep your employee motivated. In addition, it is an excellent way to reward an employee. Incentives in the form of cash bonuses can take your employee a long way.
3. Opportunities to Learn
Offering employees the opportunity to improve their skills, knowledge, and education will enable them to work towards promotions and work for the company in various capacities.
4. Health and Wellness program
The Health and wellness of an employee must be a top priority of every business organization. It’s a no-brainer that a healthy employee is more likely to perform well in his tasks and duties. So, health programs for employees are not solely for the benefit of the employees themselves but the company.
Several other options exist for employee recognition and reward programs – the critical factor in determining what program will work best for you and your employees.
