To get the most out of your reward strategy, it’s important to consider what factors could be limiting it’s potential. For example, you could introduce Peer to Peer ECards, allowing your employees to reward each other through your employee benefits platform, but if there are other areas of your business that need addressing and retention rates are already low, your reward strategy might not appeal to your staff as much as you’d hoped.
Here we’ll take a look at some factors that could be having a negative impact on your reward strategy.
Employee financial troubles
Before you consider rewards, you need to ensure you’re meeting the needs of your employees. For example, rewarding employees with a shopping voucher is going to have less impact if they’re already struggling with debt or living from pay cheque to pay cheque, even if your business does offer a real living wage as a minimum.
If your business doesn’t offer a fair wage or a real living wage, a financial reward like a shopping voucher is much less likely to be received well, particularly if low remuneration is a major concern for your employees.
You also need to address any financial troubles your employees may have. You can do this through offering Salary Deducted Loans, allowing employees to manage debt more effectively through their salary, or by offering Workplace ISA’s, offering employees an alternative and more effective way to save and invest. Financial Education is also key not only as a preventative measure but to help employees manage their finances more effectively going forward.
Not all rewards are financial, however by supporting employees with their financial troubles and offering fair remuneration, you’re setting up the financial side of your reward strategy to perform at its most effective.
A lack of promotion or progression opportunities
Promotion and progression opportunities are rewards in themselves. Progression is a reward for an employee excelling in their role and moving up with more responsibility.
Many employees see more responsibility as a reward. Part of a rewarding job role is achieving flow, making the role challenging enough for the employee so it’s interesting and engaging, while avoiding making the role too challenging where the employee finds the role too difficult and potentially stressful.
Often reward is thought of as a stand-alone practice where a reward, usually monetary, is given for performing well. However, reward needs to be thought of in a broader context and should be integrated with other HR practices. Receiving an ECard congratulating you on your promotion is much more rewarding than simply receiving a voucher for hitting one particular goal.
If a lack of progression opportunities is a concern for your employees, your reward strategy will be much less effective. A linear reward strategy that simply looks to reward employees for meeting targets with ECards or gift vouchers won’t win any favours with employees looking for more tangible progression opportunities and a chance to challenge themselves.
You need to ensure that every effort is taken to ensure that every employee feels they’re being treated fairly by the business for your reward strategy to perform at its best.
Some employees may feel they aren’t being treated as fairly as others or aren’t being rewarded in the same way despite feeling like they’ve achieved similar or bettered their colleague. Some may feel a sense of favouritism or that they’re generally underappreciated.
The first thing to do is ensure that all employees feel comfortable communicating these views. Where employees feel like they can’t express their views on these types of matters, the problems tend to worsen.
It might be unrealistic to expect every company to have a 100% satisfaction rate with employees and for all employees to be completely happy in every aspect with their role and the business they’re a part of. However, a company with a number of employees who feel that they aren’t being treated fairly will struggle to see their reward strategy get off the ground.
If employees see the company in an unfavourable light, you’re already on the back foot when it comes to your reward strategy.
Start by meeting the needs of your employees
Your reward strategy requires a foundation if it is to work as effectively as possible. That foundation is all about meeting employees’ needs.
Employees need progression opportunities; they need fair remuneration and at a minimum a real living wage. They also need to feel like they’re being treated fairly.
If employees are too concerned with their finances, then rewards will have less impact. If employees feel they can’t progress or their career has stalled, they’re more likely to question rewards than receive them well, asking where the reward of progression is. If employees feel they’re being treated unfairly, they’re much more likely to see the company in a negative light impacting the effectiveness of rewards.
Whether it’s a handful of employees or a larger number that are being affected by poor finances, lack of progression opportunities or feeling unfairly treated, your reward strategy is being impacted and its effectiveness is limited.
Some might call it “getting your house in order” before you begin to implement a strong reward strategy. By meeting your employees’ needs first, you’ll see your reward strategy help you meet those important goals when it comes to employee satisfaction and employee retention!