Is your employee recognition scheme actually rewarding those who matter?

Now that the Christmas and New Year festivities are over, staff are returning to work and credit card bills are a harsh reality check of the cost of the festive season, staff may well be feeling a little low. With the average cost of Christmas per family being £753 per family, ensuring that employees feel buoyed, upbeat and motivated is essential, especially in the New Year period. The recognition and rewards of employees on a personal level is these days increasingly considered not as an optional extra, but as essential in keeping staff motivated, loyal and proactive. At a time of year when we review and reflect on our work and lifestyle practices, now is a good time to stand back and analyse whether your employee recognition and rewards scheme is actually having the intended effect.

Traditionally, the Christmas bonus and possibly also an annual pay rise or year-end bonus, have been deemed more than enough by employers to recognise their employees’ hard work and keep them happy throughout the New Year and beyond. However, with the average annual bonus in the private sector being £1,900 whilst employees in education and the public sector receive only on average £100, employees can very often see the majority of their bonus quickly eaten up by the end of January by the cost of the Christmas. Although still welcomed by staff, this approach of awarding a bonus being the sole way of employee appreciation is now regarded as outdated, impersonal and having only a short-term effect on morale and employee participation that has rapidly diminished by February. Other employers believe they are sufficiently recognising their staff throughout the year by giving them a gift card for special occasions or holding a company recognition scheme such as ‘Employee of the Month’.

Does Tried and Tested Always Work Best?
With £300 million a year spent on unused gift cards with the vast majority of these given during the Christmas period, this would point to it being a clear sign that the recipient does not find it of value. If an employee does not find a reward valuable, they are unlikely to be engaged in a scheme intended to drive motivation and employee participation.

‘Employee of the Month’ Schemes – Time to Rethink?
The same question over effectiveness could also be said for ‘Employee of the Month’ schemes. More than 80% of companies issue an ‘Employee of the Month’ award or similar accolade. Far from having the intended effect of boosting employee participation and reinforcing teamwork, sometimes approaches such as ‘Employee of the Month’ can be divisive and detrimental.

On the positive side, ‘Employee of the Month’ schemes can encourage healthy competition in sales environments such as call centres and retail sales. Without doubt, in these sectors, ‘Employee of the Month’ schemes boost employee engagement – revitalising an employee’s sense of belonging to a company and driving staff to be enthusiastic and fully absorbed in their role.

‘Employee of the Month’ schemes might not be as effective in other sectors. Some even argue that ‘Employee of the Month’ schemes are not recognition in the workplace at all. What percentage of the workforce do they actually reward? In a company of 200, an ‘Employee of the Month’ award will only recognise 0.5% of the company each month. Moreover, very often it is the high flyers or more outwardly confident who are rewarded, with the main bulk of staff not being rewarded at all.

The initial momentum of a scheme can often also lose traction quite rapidly as enthusiasm for nominations wanes. And how do you choose between an employee who makes a great impact in one month versus the ‘plodding’ employee who ultimately achieves the same result over a longer period of time?

Make One Employee Happy and the Others Unhappier
According to a Harvard Business School study, ‘Employee of the Month’ schemes can unwittingly actually have the opposite effect of boosting employee participation. By rewarding one person out of a team of many, it may makes the others feel even less motivated than before and resentful towards the accoladed employee. The research has shown that companies saw a 6-8% decrease in productivity after an award was instituted. One theory behind this effect was that an award reinforces a particular behaviour and has a negative effect on other working practices that may actually be beneficial to the company’s performance, productivity and employee engagement. Successful employee recognition and staff appreciation programs need to recognise and reward all deserving employees on a regular basis.

Simple Things That Always Work – Keeping it Personal
As we enter into another New Year, it may well be worth a company rethinking how they are appreciating their employees at work. A financial reward, or a one-time ‘Employee of the Month’ award, may act as a short-term motivator, especially in the New Year period, and might be a real boost to an employee. However, a more personal approach to employee recognition may be more effective in boosting productivity and employee participation across the workforce. A more personal approach creates a longer-term, sustained environment of value, recognition and empowering of the employee. For example, demonstrating individual employee appreciation with a kind word of praise, or showing team recognition with thank you cards (personalised e-cards are a great environmentally friendly alternative) are a highly effective means of diversifying and revitalising your staff appreciation program.

Make It Meaningful
Recognition should be continuous throughout the year, providing positive reinforcement to employees when they perform well in their role. Personalised employee recognition via a personally-worded thank you ecard will go a long way, at any time of the year, to motivate and show you are appreciating your employees at work. The Each Person recognition and reward platform also allows managers and employers to award epoints to employees for a variety of reasons to further add weight to their recognition. Employees find epoints personally valuable as they can be spent on rewards that they would like and can be spent at any time of the year. Epoints can be awarded for reasons including hitting sales targets, employee-to-employee recognition, exceeding their role objectives or long service.

To find out more about the Each Person employee recognition and reward scheme, visit