10 ways good reward management will transform your company
Reward management might seem like overcomplicating a preexisting structure. However, it isn't that hard. And, with the preferences of the workforce changing, good reward management can bring you big benefits. Here's how it can transform your business.
So, what is 'reward management'?
Gone are the days of ‘give me all your time and dedication and I’ll give you some money’. When it comes to successful employer-employee relations, benefits, perks, and rewards are becoming as important as pay. We are now in the ‘you scratch my back, I’ll scratch yours’ era of reward management.
Simply, reward management is the implementation of strategies or policies to help reward everyone in the company, in a fair and consistent way. When you reward your employees for good work, they feel valued and more motivated – which can overall boost the productivity and success of your business.
The most successful reward management strategies give employees opportunities to enhance themselves – bringing about a mutually beneficial way of recognising good workers.
But, how is reward management important?
Rewards come in many forms. But what really matters is how you manage these rewards. When rewards are managed fairly and effectively, they add to employees' happiness. Employees stay loyal to your company and help to grow your talent pipeline.
Nowadays, for success in the working environment, you need a blend of work and rest. This doesn’t mean that when we are resting, we are working and vice versa, but more that perks, benefits, and rewards at work can become useful in a meaningful way away from the office.
When you are thinking about reward management, you need to really think about what rewards your employees will actually appreciate, and which could actually benefit their life. Whether these rewards benefit your employees financially, add to their lifestyle or improve their wellbeing, when employees know that their employer is thinking about what rewards will improve their lives - they know that they are valued and will be happier and work harder.
The modern generation of workers, who will make up 75% of the workforce by 2020, are more interested in self-enhancement and lifestyle rewards than simply financial incentives. An effective reward management strategy doesn’t just promote good work by dangling a carrot in front of employees, but by promoting a healthy work-life balance that allows the employee to be their best and perform their best.
Benefits, perks, rewards: what’s the difference?
Is there a meaningful difference between these three lovely, shiny bonuses (what even is a bonus?). Perhaps the easiest way to remember what’s what is:
BenefitsBenefits are built into one’s salary. Traditionally, benefits were substantive yet non-financial aspects of one’s payment. For example, in the U.S, full health insurance can save an employee a lot of money and stress.
PerksPerks are often thought of as additional little treats that make life at work more bearable. These range from beer Fridays, to dog Wednesdays, to frisbee Mondays. However, where things are changing is that these auxiliary perks are starting to count for more.
Many employees want to better themselves, and the best companies are realising this. So now, perks can include time allowances to learn a new language, join fitness classes, or cycle-to-work schemes.
As you may have noticed, many of these more substantive perks will be mutually beneficial, as a happier, healthier employee will contribute to a positive office culture as well as perform better. If you'd like a little more information on these, find everything you need to know about Perks here.
RewardsRewards provide an opportunity to not only promote productivity but do so in a way that aligns with your company values.
So, this means instead of giving a cash prize for good work or a day’s holiday for a successful project, you should offer incentives that will promote teamwork, or consideration in the workplace, as well as those that encourage quality work.
The who, how and why of giving back to employees
Unlike benefits and perks, a key aspect of successful reward management is recognising and singling out who to reward. How do you fairly tease apart who has acceptably contributed to a group goal, and who has shone? It can be tricky, but clear communication channels and knowing everyone’s goals is a start.
Reward management can contribute to a thriving company culture. If your employees are rewarded for going above and beyond, helping each other achieve, and meeting their own goals, you’ll foster a caring community and compassionate environment. Furthermore, this can be done to varying degrees, meaning that you won’t dilute the significance of rewards.
Perkbox’s Recognition hub helps you achieve this by offering easy to access rewards in a variety of contexts. Promote healthy competition to develop individuals, or recognise a team for their quality work. It’s a big step towards implementing the three crucial R’s in your workplace: recognise, reward, retain. If you do these well, you'll have won reward management.
So, now you know that rewarding can play a crucial role in company culture as well as employee retention, let’s look through the myriad benefits to your company that good reward management can have.
10 benefits of reward management
1. Attracts the top talent
Your employer brand needs to be well managed and presented by your talent acquisition team. This is because the top talent want to know that they will be getting what they're worth. You can show them how they’ll get this by detailing your sophisticated reward management system within job overviews during the recruitment stage.
2. Retains the top talent
Retention is one of the three Rs for a reason. The importance of employee retention is hard to overstate. Keeping your best employees is vital for business success and if they don’t feel appreciated they may leave to join a competitor which could be very dangerous for your business. There are many ways to retain them, and reward management is integral in this fight.
3. Contributes to company culture
As alluded earlier, when you manage rewards effectively, you can link them to company goals and values. The benefits of this is wide-reaching, as a strong company identity and culture infiltrates all areas, including the P word - productivity.
4. Employee value proposition (EVP)
If you don’t know by now, EVP is big. If you can’t remember the letters, think ‘extra very important’. Sounds silly, but it’s crucial in helping all of the first three points in this list.
The EVP is the overall package you are offering to your employees, and good reward management is a big part of this. Your EVP is what will set you apart from competitors – so it's vital that you can shout about this if you want to attract top talent.
5. It contributes to employee wellbeing
It’s not hard to imagine scenarios where neglecting an employee’s hard work can leave them feeling disengaged and dejected. The opposite is also true. So, with employee wellbeing more important than ever, you can’t afford to risk forgetting about those who push your company to new heights.
It’s simple but it needs to be said. Reward management can help productivity massively. From healthy competition to knowing that their hard work will be appreciated, employees are more likely to produce quality work if they know meaningful rewards lie around the corner.
As with company culture, reputation influences many aspects of the business. One of the more important fields of influence is on clients. Notoriously bad employers can find it harder to convince a client to trust them if they know the company’s own employees don’t. Reward management, therefore, can be a key way to engage employees, contributing to a positive reputation.
8. Improves your performance management system
Very popular in modern business management is the process of performance management. This aims to continually improve and grow the performance of each employee. So this isn’t just about achieving your goals but pushing your business to the best it can be. Increasingly, reward management is being employed in such systems to keep employees engaged and growing.
Similar yet distinct from retention and culture is loyalty. An effective reward management system ensures that your employees can form a meaningful bond with your business. This will improve many areas, such as how they speak about and sell the company to others, whether they be clients or potential job applicants.
10. Encourages a long-term outlook from employees
Instead of offering here-and-now rewards for single pieces of good work, a sophisticated reward management system will promote consistent good work over a period of time. That’s where the ‘management’ comes in. You don’t just fling freebies at your employees, but think how to best attach them to long-term goals, thus breeding a long-term outlook.
There are some lovely ways your reward management system can transform your business. We’re sure that, after implementing one like the rewards hub from Perkbox, you’ll continue to see these rewards for yourself, as well as some you may not have anticipated.
With benefits, perks, and rewards firing on all cylinders, you’re giving yourself a fighting chance at nailing the recruitment through to retirement cycle of employee engagement and performance.