What needs to happen to ensure that employee reward and recognition systems are fair and that they achiece their goals?

Although these terms are often used interchangeably, reward and recognition systems should be considered separately. Employee reward systems refer to programs set up by a company to reward performance and motivate employees on individual and/or group levels. Rewards can be either in term of money or recognition from managers and is not included in the salary, because it may be considered as a cost to the company. It is important to point out that those people need to feel appreciated and recognised for the work performed. No one likes to feel that their efforts are unseen and disregarded. Reward and Recognition system let employees know that their effort counts. Employee Reward is mainly attached to financial benefit whereas Employee Recognition is a way of praising people for positive efforts. The appreciation can only be done by giving a thank to an employee for example to someone who provides good service to customers or to acknowledge an extra effort.

Six Keys to ensure that the Reward & Recognition System are fair:

• Goals need to be set and clearly explain to employees.

Employees should know exactly what they need to achieve in terms of goals. They need to have a clear understanding of their roles and responsibilities in the organisation in order to perform. Through the job description, objective performance measures are elaborated so that to remind the job holder and managers on what objectives they need to focus on. Managers need to communicate this to their employees before assessing their employees. It should be done in a way that both of them understand it easily, make it easy to follow.

• Gather Commitment from Management and feedback of employees.

All managers and executives should understand the program’s ins-and-outs. This includes eligibility, management’s roles and responsibilities, types of behaviours wanted, as well as results and contributors that warrant a reward and recognition. Management commitment is very important but we also need to have employees input too. To have an accurate perspective on the types of recognition employees would value, the only way to do that is to ask them. Surveys or even focus group meetings can be organised and through this we will get the input of all people at all levels. As we know different levels may have different needs and motivation.

• Link the Reward to Bottom Line Results.

Your rewards and recognition program should make sense from two perspectives: from the organisation’s overall goals and strategies and from the needs and expectations of the workforce. Ultimately you want your rewards and recognition program to be connected to the employee’s and organisations day-to-day reality. Bottom line are those who are really in touch with customers and need special attention, because it is them that attracks customers and deliver the goods in their behavioral attitudes.

• Connect the Reward’s value to the employee.

Your employees need to value and feel that the reward is meaningful. By working extra mile, employees will feel secured and valued such that performance will come from themselves. They need to be proud enough to receive at least some of the awards that perhaps they will even talk about it with their families and friends for years to come. Some employees feel more important by just praising them and recognising their efforts, on the other side others appreciate money as a source of motivation and reward.

• Need to set up appropriate measuring tools/feedback mechanism to monitor performance to ensure that employees are fairly rewarded and recognised.

Performance Appraisal exercise should use performance measurements that are evaluative in all the aspects of a person’s relationship between himself and his working environment. Measurement should reflect appraisal criteria like traits, behaviours,skills, knowledge and outcome of the individual. For example if as an employee I have to sell more credit cards than the required targets but my behaviour towards my colleague is unethical, how to rate me, what is important is to create a mix of all those criteria, allocate different ratings to each of them, and then give a final rating for the overall performance. Managers and Supervisors who perform the appraisal exercise need to be trained. They are responsible for selecting the individuals that will receive rewards and this decision need to be done accurately and fairly. They should know how to give feedback. The feedback should be communicated clearly and consistently to all employees in order to avoid misunderstandings which may generate bad feelings.

• Set up a Performance Related Pay - ↑ performance = ↑ reward.

Employees need to believe that the system is fair and trustworthy. When developing a reward and recognition system, it is important to establish criteria and standards to ensure organisational consistancy within the program. This is important for many reasons, mostly because you want your employees to trust the system and to see that it is fair to every participant. Of course there are also legal reasons to ensure that your organisation and/or department are not practicing discriminatory practices. The less subjective the Performance Management System, the better it is.

Outcomes and recommendations through this exercise should be monitored in a way that high performers are rewarded accordingly to the organisation remuneration and recognition systems. Whereas poor performers need to be managed in a way that they are not frustrated and left apart.

Following all these guidelines through the Performance Management System, objectives of the reward and recognition process is mainly to retain high performers and reward them as per their expectations. It will encourage knowledgeable employees by maintaining higher salary/wage, work standards and praise them for their good work accomplished.