Human Resources

Managing Employees

Most employees feel that they are worth more than they are actually paid. There is a natural disparity between what people think they should be paid and what organizations spend in compensation. When the difference becomes too great and another opportunity occurs, turnover can result. Pay is defined as the wages, salary, or compensation given to an employee in exchange for services the employee performs for the organization.

Pay is more than "dollars and cents;" it also acknowledges the worth and value of the human contribution. What people are paid has been shown to have a clear, reliable impact on turnover in numerous studies.

Rewards and Recognition

Employees want to be recognized for a job well done. Rewards and recognition respond to this need by validating performance and motivating employees toward continuous improvement. Rewarding and recognizing people for performance not only affects the person being recognized, but others in the organization as well.

Through a rewards program, the entire organization can experience the commitment to excellence. When the reward system is credible, rewards are meaningful; however, if the reward system is broken, the opposite effect will occur. Employees may feel that their performance is unrecognized and not valued, or that others in the organization are rewarded for the wrong behaviors. Unrecognized and nonvalued performance can contribute to turnover. Recognition for a job well done fills the employees' need to receive positive, honest feedback for their efforts.

Need for Rewards and Recognition

Recognition should be part of the organization's culture because it contributes to both employee satisfaction and retention. Organizations can avoid employee turnover by rewarding top performers. Rewards are one of the keys to avoiding turnover, especially if they are immediate, appropriate, and personal. A Harvard University study concluded that organizations can avoid the disruption caused by employee turnover by avoiding hiring mistakes and selecting and retaining top performers.

One of the keys to avoiding turnover is to make rewards count. Rewards are to be immediate, appropriate, and personal. Organizations may want to evaluate whether getting a bonus at the end of the year is more or less rewarding than getting smaller, more frequent payouts. Additionally, a personal note may mean more than a generic company award. Employees should be asked for input on their most desirable form of recognition. Use what employees say when it comes time to reward for performance (St. Amour, 2000).

Designing a Rewards and Recognition Solution

In designing a rewards and recognition program, the following guidelines should be considered.

1. Rewards should be visible to all members of the organization.

2. Rewards should be based on well-defined, credible standards that have been developed using observable achievements.

3. Rewards should have meaning and value for the recipient.

4. Rewards can be based on an event (achieving a designated goal) or based on a time frame (performing well over a specific time period).

5. Rewards that are spontaneous (sometimes called on-the-spot awards) are also highly motivating and should also use a set criteria and standard to maintain credibility and meaning.

6. Rewards should be achievable and not out of reach by employees.

7. Nonmonetary rewards, if used, should be valued by the individual. For example, an avid camper might be given a 10-day pass to a campsite, or, if an individual enjoys physical activity, that employee might be given a spa membership. The nonmonetary rewards are best received when they are thoughtfully prepared and of highest quality. Professionalism in presenting the reward is also interpreted as worthwhile recognition.

8. Rewards