- A fit-for-purpose reward strategy is vital in creating a happy and rewarded workforce that drives productivity and success.
- Employers should create a reward strategy that allows employees with different lifestyles and needs to work in a way that enables them to thrive.
- Aligning a reward strategy with organisational objectives can contribute to overall business success.
A reward strategy is a good motivational tool for employers. Employees can feel a sense of achievement from receiving incentives for their efforts, which, in turn, drives performance and engagement. So, how does a reward strategy contribute to creating a culture of organisational success?
Reward strategy usage
Workhuman’s May 2022 report Unleashing the human element at work: transforming workplaces through recognition revealed that only one in four employees strongly agree that they feel connected to their organisation’s culture. To combat this, employers can use a reward strategy to create a culture that fosters both employee and business success, and recognises and appreciates the variety of their contributions.
Aligning reward with inclusive behaviours and practices, such as flexible-working policies and mentorship, can promote positive cultural change, says Jamie Mackenzie, director of Sodexo Engage.
“A reward strategy that emphasises diversity and inclusion helps attract and retain diverse talent, enhancing the organisation’s employer brand and contributing to the achievement of business goals,” he says. “Additionally, by valuing diverse perspectives through the strategy, organisations foster an environment of collaboration and idea sharing, which drives business success.”
It is important for employers to ensure their reward strategy is fit for purpose, centred around its values and is culture positive, because happy, rewarded employees will drive productivity and success.
Organisations should, therefore, start with desired behaviours and values when developing their strategy; linking to short-, medium- and long-term business objectives will help drive engagement and performance, says Chris Last, commercial and strategy director at Vivup.
“Employers should build in reward in the form of recognition, personal development and promotions, as this will organically breathe life into a culture and successes will follow,” he says. “Getting it wrong can be costly, resulting in disengaged staff, high turnover levels and a drop in output and performance.”
Reward strategies do not have to break the bank; giving employees a shoutout for their achievements that week, or awarding them an e-gift card to get a coffee can still create a meaningful recognition culture, explains James Malia, European president at Prezzee.
Helping employees to thrive
A reward strategy can also play a pivotal role in empowering employees to thrive and unleash their full potential. Through recognising and appreciating their efforts, a positive work environment that enhances job satisfaction and boosts morale can be created.
Reward reinforces a culture of excellence, encouraging employees to perform at their best and demonstrate an organisation’s commitment to valuing and investing in its workforce. “Ultimately, by leveraging reward effectively, HR leaders can cultivate a thriving workforce that drives business success amid uncertainty,” says Mackenzie.
By giving employees regular recognition, employers can tap into their drive and passion at work and increase their self-esteem. A reward strategy that protects or buffers workers from challenges can create conditions for them to thrive.
Reward can be used effectively to help employees develop new skills, take on additional assignments and collaborate, says Gethin Nadin, chief innovation officer at Benefex and Zellis. “Employee benefits are often used as part of reward to protect and support employees’ lives too: they can help to reduce stress, recover from illness or setbacks and promote better work-life balance. Financial incentives, bonuses and benefits can also motivate employees.”
Employees that are rewarded for moving the business forward, or setting good examples, can lead to healthy competition, encouraging them to become more innovative and go beyond their comfort zones to achieve more and thrive.
One key area to explore in order to help employees thrive is an inclusive programme that works for everyone and considers offline or overseas populations, says Last. “[Another is] a consistent reward strategy; one that is at the top of the agenda for a week and then goes quiet for the next two will quickly lose engagement and credibility," he explains. "And being fair and genuine: don’t just hand out rewards for the sake of it, employees will see through it and a strategy will be devalued.”
An effective and compelling reward package as part of an organisation’s wider employee value proposition leads to a higher level of employee engagement, compared to one that just ticks boxes. Employers should consider workers with varying lifestyles and needs, and those who are at different stages in their life, by giving them the tools and freedom to work in a way that will allow them to thrive.
Contributing to business success
The success of individuals within an organisation can directly contribute to overall business success, which employers can achieve by prioritising employee wellbeing and providing tailored benefits. This approach fosters a trusting and open culture: when employees feel supported by their employer, they become more engaged, motivated and productive.
“Consequently, the collective success of individuals translates into enhanced teamwork, innovation and ultimately, business success,” says Mackenzie. “Investing in the wellbeing of individuals, therefore, contributes to the overall health and prosperity of the organisation as a whole.”
By linking individual employee achievements with wider organisational goals, employees are encouraged to focus on activities that will drive overall success for the business.
Prezzee's Malia describes it as a cyclical relationship, explaining that reward leads to improved results, leading to business success, which, in turn, leads back to reward. “Building reward and recognition into the heart of a business’ culture creates a sustainable, future-proofed working environment," he says. "Employees that are made to feel appreciated regularly through personalised reward with an emotional connection are less likely to search for greener pastures. It’s the employers that view reward as an after-thought that will find themselves struggling to retain the people that make the business what it is.”
To ensure they achieve their strategic objectives, employers must focus on the skills needed to drive future business success. In turn, they need to understand what aspects of reward are most valued by the people with those skills, or who can develop such skills internally.
By ensuring there is a clear, discernible and transparent linkage between performance, contribution and reward, business and employee success will go hand in hand, explains Andrew Stemp, associate partner, talent solutions at Aon.
“Employer flexibility breeds similar flexibility in staff,” he says. “Highly engaged employees are more committed and productive. Staff who are successful within their organisation strive to achieve more and in turn contribute commensurately more to the success of their business.”
Employers should encourage employees to share their successes and positive experiences within the business, as promoting best practices helps build a culture where people are proud of where they work.
Last recommends embracing data and employee feedback to inform decisions around reward. “Increase the focus on employee development and recognition to reap business rewards as well as rewards for employees,” he says.
Happy and supported employees will always do more for an organisation and help contribute towards a culture of success. By ensuring that a reward package resonates with workers and is tailored to what they need both inside and outside the workplace, they can then focus more on helping to make the organisation successful.
