Rewards And Recognition

REWARDS AND RECOGNITION

Introduction

Reward & Recognition External Data

Recognition Program in Place? 84% 87%

Nearly 9 out of 10 companies offer some sort of recognition programs for employees

Reward and Recognition programs are generally less expensive than base pay, benefits, stock options and bonus

2006 2007 Cnbc survey -2008

The Four Elements P O R T raise pportunity hank you espect

PROGRAM PURPOSES

• Recognize individuals and teams in a timely and effective way.

• Provide a continuum of opportunities to acknowledge and recognize members of the organization.

• Recognize that each individual can make a difference.

• Be a fair and flexible practice that is woven into the fabric of the org culture.

Reward refers to all of the monetary, non-monetary and psychological payments that an organization provides for its employees in exchange for the work they perform.

Reward (or compensation) management is a core facet of the employment relationship.

An organization can provide two types of reward: extrinsic and intrinsic .

The mix of extrinsic and intrinsic rewards provided by the employer is termed the reward system , the monetary or economic element of the reward system is termed the pay system.

The Nature of Reward system

Reward objectives

Any organizational reward system has three behavioral objectives:

1. membership behavior to recruit and retain a sufficient number of qualified workers

2. task behavior to motivate employees to perform to the fullest extent of their capabilities

3. compliance behaviour to encourage employees to follow workplace rules and undertake special behaviours beneficial to the organizations without direct supervision or instructions.

A MODEL OF REWARDS SYSTEM

Total Rewards Components + + + = Total Rewards Benefits Reward and Recognition Variable Pay Base Pay

R&R Overview 14 Base Pay Bonus Benefits Equity Rewards & Recognition Top objectives for R & R programs include motivating high performance, reinforcing desired behaviors and creating a positive work environment. R & R programs have grown over the years from informal “thank you’s” to plans with a written strategy and more defined budget.

What is Recognition?

“ Recognition is any thought, word, or deed towards making someone feel appreciated for who they are and recognized for what they do.” 1

“ Recognition can be a strategic tool for shaping behavior and moving an organization in a desired direction.” 2

“ Recognition is something a manager should be doing all the time—it’s a running dialogue with people.” 3

Why Focus on Recognition?

Employees identify recognition as one of the most effective motivators 1

Even small increases in supportive practices are associated with decreased turnover and increased sales/profitability 2

Employees who feel that their organization values them are more likely to value their customers 2

Appreciation and/or praise are among the top three drivers of employee motivation and engagement across a variety of industries and companies 3

Recognition in General

To Recognize is to

Acknowledge, Praise, Encourage

Immediate- handwritten note fine

Simple- thanks on back of business card

Timed well- right after stressful period

Public- share with boss

Personal- give credit,use name,spend time

Celebratory- potluck, retreat

Sincere- heart felt

Evidence from Best Employer Studies

Best Employers around the globe have cultures that emphasize recognition

In the US: Fortune’s 100 Best Companies to Work For

All of the 100 Best Companies recognize employees’ outstanding performance or service using special awards and programs

50 Best Companies to Work for in Canada

Best companies in Canada have people practices that communicate and reinforce the organization’s culture and values, including recognition of outstanding performance

Hewitt Associates

Recognition types

Peer Recognition

Formal Recognition

Program design by staff

Nominations from staff

Award selection by committee

Limited involvement of administration

Design Goal: Peer Recognition

Awards Ceremony.

Citation, certificate and cash award.

Luncheon.

Pictures on webpage,magazines.

Design Goal: Formal Recognition

Achievements Recognized by Fortune’s 100 Best Companies to Work For Percent of Companies

Awards Used by Fortune’s 100 Best Companies to Work For Percent of Companies

Reward & recognition approach –outcomes

Reduced level of employee turnover – down to 10% on average;

Reduced levels of sickness absence being sustained per yr.

Improved recruitment into HR practises;

Reduced business mileage due to travel for work plans being integrated into reward strategy;

Improved employee satisfaction levels: 73% satisfied;

(Source: Ipsos MORI 2007 Survey - compared to 62% LA / public sector comparators and 63% overall).

Improved employee advocacy about the Council as an employer: 50% speak highly;

(Source Ipsos MORI 2007 Survey - compared to 33% LA / 41% overall).

Satisfaction with reward and benefits (excluding salary): 67% satisfied;

(Source Ipsos MORI 2007 Survey – compared to 58 % LA/public sector and 58% overall).

Future Reward and recognition Challenges

Implementing Annual Total Reward Statements, delivered via e-business suite;

Implementing more ‘flex’ in the benefits offering and enhancing the choice for individual employees, e.g. trading salary for extra holidays, benefits package for ‘carers’ and not just childcare;

Increasing the level of workforce knowledge and skills around reward by offering financial education for the workforce in partnership with the Financial Services Authority