By Derek Irvine, Vice President of Client Strategy and Consulting at Globoforce
A number of the UK’s largest banks recently announced that annual bonuses, totalling billions of pounds, would be awarded to senior staff members. Despite growing concern from the government and the European Union (EU), as well as increasing questions from the public, the ‘bonus culture’ that surrounds the UK’s banks shows no sign of slowing. While many will perceive political and economic problems with these vast financial rewards being given to senior leaders of banks, there are also a number of missed opportunities at a more immediate organisational level — namely, what about the rest of the staff?
All encompassing recognition
This is not just a problem within banks. In many organisations, the elite are often the only ones recognised, with star performers and senior staff given significant financial rewards. Such approaches that target a select few will ultimately fail to deliver long-term, wide-spread motivation, as the vast majority of staff will be completely untouched by the reward and recognition process. In fact, Globoforce’s UK Workforce Mood Tracker discovered that 81 percent of British employees believe recognition and reward should be distributed more fairly throughout organisations, instead of being confined to senior executives. Given that 73 percent of those surveyed feel that recognition motivates them to do a better job, while 29 percent have left a company because they were not being recognised, it is clear that organisations need to look at re-evaluating their recognition and reward programmes. If organisations really want to make a significant impact on motivation across their employee base, then recognition programmes need to reach more people, ideally at least 80 percent of the workforce. Without the efforts of the everyday workers, it is unlikely that business leaders would achieve their goals — making it vital that those employees are also identified and praised for their achievements.
One common solution is to provide all staff throughout the organisation with cash rewards. While this approach ensures the majority of the workforce is rewarded, it creates a separate problem as employees see cash rewards as compensation. It then becomes something that is both owed to them and expected, and it is more likely the cash will be swept up within their standard pay packet and spent on household outgoings, such as groceries and petrol. Because there is no memorable or meaningful attachment for the recipient, the motivational effect of the gift is soon lost.
A new approach to recognition and reward
Once they have understood the low motivational value of cash rewards, businesses should look towards social recognition programmes as a way to both recognise and reward all of their employees.
A universal social recognition programme works by ‘crowdsourcing’ the opinions of many, allowing colleagues to recognise one another for any good behaviour they witness. A simple success factor in this approach is the fact that recognising a colleague is a voluntary action, which ensures the process is genuine, and therefore more effective. As long as the process involved is relatively quick and simple, employees are inspired to look out for behaviour that improves efficiency and morale. By displaying the accolades received by staff on a platform visible to the entire organisation, employees are more likely to strive for achievements (and also learn the types of behaviours that are desired at the organisation as well)
While recognition programmes should be designed to build a motivated and engaged workforce, they should also be engineered to encourage and develop desired behaviours that align with company values and objectives. By doing this, businesses will see the entire workforce pulling in the same direction, delivering very high levels of productivity and creating a consistent and desirable corporate culture.
The most effective recognition awards include some form of tangible reward. Rewards other than cash, such as gift cards for local retailers or experiences, have a far greater motivational effect. When an employee is able to choose the reward that they most desire, the token moves away from being viewed as just compensation and instead delivers a personal, memorable and physical or experiential symbol of achievement — something that cash alone cannot have.
Seeing the results
When tied to company values, recognition and appreciation clearly show employees how their efforts are contribut¬ing to the team and company success. Combined with the ability to track recognition and intervene where necessary, social rec¬ognition programmes provide the mechanism for proactive management of company culture, creating a work environment in which employees choose to engage. Instead of focussing on those at the top of the chain, businesses should look at how they are recognising and rewarding the majority of their workforce — only then will they maximise their bottom-line.