What is more effective — rewards or recognition? Each has its own advantages. HR Katha finds the right strategy to keep the workforce motivated.
Organisations today, are finding newer ways to incentivise their workforce. Some employers still take the monetary route of rewarding their associates, while some are advocates of the non-tangible way of recognising talent and appreciating efforts.
Rewards can be consumed, are measurable and are dependent on a certain delivery or promise, while recognitions are more of experiences that affect work at the emotional level and may have a long-lasting impact.
Each has its own pros and cons, and much of it depends on the individual employee as the fact remains that one size does not fit all. After all, while a written note from the boss could be a great token of appreciation for a particular employee, a plaque to hang on the wall could give a high to another employee, while some may just want cash incentives.
The litmus test for all rewards and recognition programmes is just one — how successful the organisation is in attracting and retaining talent. The report tries to find out the right strategies to keep the workforce motivated.
Focus on culture not cash
It is important to build a culture of recognising great efforts as it has a long-lasting effect, rather than just giving out cash prizes, the effect of which is very short-lived. Industry practitioners are almost unanimous on this.
A senior industry practitioner says, “Offering big rewards can just kill intrinsic motivation.”
Rewards face a practical hazard. Most of the monetary rewards come in some form of pay, and therefore, remain confidential. The individual employee feels gratified that the company has recognised his/her contribution in a tangible way, but he/she is unable to share the same with his peers or colleagues. On the other hand, non-monetary rewards or recognitions have a demonstrative value.
As Lalit Kar, head-HR, Reliance Digital, says, “An employee feels distinguished, when his ‘above and beyond’ contribution or behaviour is publicly acclaimed and appreciated.”
Holistic rewards programme
Globally, organisations are increasingly realising the need to expand the rewards framework to include initiatives that may not be directly quantifiable but are still valued by employees. This realisation has given birth to the concept of total rewards, which covers different elements—benefits, recognition, health and work environment, training opportunities, compensation, work–life balance— to attract and retain talent for a longer term in the organisation.
“Relying on rewards as the only tool for attitudinal change has a very limited impact,” Kar says.
Leadership, organisation culture and structure, career programmes, learning and behavioural trainings, all have a far-reaching impact on attitude and behaviour modification.
“All these elements, in tandem make a lasting impact on the behaviour employees demonstrate in the workplace,” he adds.
Designing rewards programme
Rewards mostly fail to work because of their design. The most important factor is to identify the target group and then decide on the reward.
While conceptualising a reward system, organisations should look at competition and then design the reward programme. It is also equally important to evaluate the motivation of the target group that the reward has been designed for.
“If the target achieved by the team is large, and the reward is low, then it will not work for obvious reasons. Also, if the target is very low, a reward scheme will not work as an incentive, either,” explains, Rajiv Oza, vice-president & group head, HR, Biological E.
Various HR tools, such as the MAO, motivation analysis of organisations, can reduce the dilemma of improvising the right reward scheme to a great extent.
For the uninitiated, MAO, developed by Udai Pareek, the father of HRD in India, recognised the need of truly understanding the workforce to create customised reward systems.
It identifies six typical motivators of human behaviour—achievement, affiliation, influence, control, extension and dependence—that can be used to inspire the workforce and have them deliver their best.
It is understood that customising rewards as per individual preferences is the most ideal state to achieve for any organisation. But the question remains whether this is practically possible. The overall view is that it puts a lot of extra cost-burden on a company. Besides, the implementation itself will be too complicated.
Avadhesh Dixit, vice-president, human resources, GE, offers an interesting solution to this problem.
“To achieve this, the best way is to segment the employees into logical groups and customise the programmes accordingly. This segmentation can be driven by clusters of preferences as ascertained through employee surveys,” Dixit says.
Group vs individual rewards
Companies often fail to separate the individual achievements from group achievements and vice-versa. This commonly happens at the shop-floor or a retail outlet. Organisations reward all the employees equally in a store or a shop-floor for achieving the target, even though it is due to the contribution of a few associates.
A senior industry practitioner, quips, “When there is an element of performance inter-dependence in a team, rewarding the entire group turns out to be truly effective. But it will fall flat if individual contributio, in the group, is the key.
Rewards for senior management
So how can a rewards programme be designed for the senior management? Does cash work for them or only recognition?
Senior industry professionals are of the opinion that it is a function of factors like a burning desire to succeed in the marketplace, individual freedom and autonomy to make a sustainable impact and expansion.
More often than not, their personal wealth has a close linkage with the business performance of the company.
There is also another point of view which says that the higher people climb the corporate ladder, they start looking for other benefits, such as recognition within the organisation. This is because, when monetary needs are taken care of, people are likely to look for intangible rewards.
Having said that, it is also a fact that these are generic observations, and every individual will be guided by his own personality factor.
Some obvious mistakes
Despite all effective measures, a reward programme may completely fail and there are several reasons for it.
Whenever a company relies heavily on a reward programme, that too in isolation and without a proper support system, it is most likely to bomb.
Besides, there has to be a co-relation between the reward and contribution of the winner. An absence of either will jeopardise the entire activity.
Another important aspect is the periodicity of the award programme. Many companies expect an annual reward to continue to yield results for the whole year. In reality, however, all rewards are short-lived and it is wrong to expect that they will reinforce the day-to-day behaviour of the employees.
The last and the most important elements are constant innovation and reinvention. As Kar puts it, “The metabolic rate of change is very high and we need to align the reward programmes to the changed priorities. Otherwise, these become irrelevant.”
The way ahead
Reward programmes can only help if an organisation shares the fruits of people’s efforts generously and fairly with them, and also acknowledges the hard work put in by employees by appreciating them. Creating an environment of approval and positive reinforcement can sometimes work wonders! There are some questions that HR managers need to answer before framing any new reward scheme. What can boost the recipients’ confidence and motivation? Will the scheme enhance their careers? Will it acknowledge them for the efforts they have put in?
The change in business anatomy also indicates the importance of considering age as a factor, while drawing up schemes and programmes. With millennials dominating the market, it is necessary to take the Gen Y factor into account. Gender is yet another detail that cannot be ignored. While basing the programmes on conjectures can prove highly unproductive, following hypotheses like the Theory X and Theory Y of motivation might solve the majority of the problems faced.