REWARDS AND RECOGNITION

Introduction

Reward & Recognition External Data

• Recognition Program in Place? 84% 87%

• Nearly 9 out of 10 companies offer some sort of recognition programs for employees

• Reward and Recognition programs are generally less expensive than base pay, benefits, stock options and bonus

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2006 2007

Cnbc survey -2008

The Four Elements

PP

OO

RR

TT

raise

pportunity

hank you

espect

PROGRAM PURPOSES

• Recognize individuals and teams in a timely and effective way.

• Provide a continuum of opportunities to acknowledge and recognize members of the organization.

• Recognize that each individual can make a difference.

• Be a fair and flexible practice that is woven into the fabric of the org culture.

Reward refers to all of the monetary, non-monetary and

psychological payments that an organization provides for its

employees in exchange for the work they perform.

Reward (or compensation) management is a core facet of the

employment relationship.

An organization can provide two types of reward: extrinsic and

intrinsic.

The mix of extrinsic and intrinsic rewards provided by the

employer is termed the reward system, the monetary or economic

element of the reward system is termed the pay system.

The Nature of Reward system

Reward objectives

Any organizational reward system has three behavioral objectives:

1. membership behavior to recruit and retain a sufficient number of qualified workers

2. task behavior to motivate employees to perform to the fullest extent of their capabilities

3. compliance behaviour to encourage employees to follow workplace rules and undertake special behaviours beneficial to the organizations without direct supervision or instructions.

A MODEL OF REWARDS SYSTEM

Benefits +Reward andRecognition

+ Variable Pay + Base Pay = Total Rewards

Total Rewards Components

R&R Overview

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Base PayBonus

Benefits EquityRewards & Recognition

Top objectives for R & R programs include motivating high performance, reinforcing desired behaviors and creating a positive work environment.

R & R programs have grown over the years from informal “thank you’s” to plans with a written strategy and more defined budget.

What is Recognition?“Recognition is any thought, word, or deed towards making someone feel

appreciated for who they are and recognized for what they do.” 1

“Recognition can be a strategic tool for shaping behavior and moving an organization in a desired direction.” 2

“Recognition is something a manager should be doing all the time—it’s a running dialogue with people.” 3

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Why Focus on Recognition?– Employees identify recognition as one of the most effective

motivators1

– Even small increases in supportive practices are associated with decreased turnover and increased sales/profitability2

– Employees who feel that their organization values them are more likely to value their customers2

– Appreciation and/or praise are among the top three drivers of employee motivation and engagement across a variety of industries and companies3

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Recognition in General

To Recognize is to

Acknowledge, Praise, Encourage

Immediate- handwritten note fine

Simple- thanks on back of business card

Timed well- right after stressful period

Public- share with boss

Personal- give credit,use name,spend time

Celebratory- potluck, retreat

Sincere- heart felt

Evidence from Best Employer Studies

•Best Employers around the globe have cultures that emphasize recognition•In the US: Fortune’s 100 Best Companies to Work For

• All of the 100 Best Companies recognize employees’ outstanding performance or service using special awards and programs

•50 Best Companies to Work for in Canada• Best companies in Canada have people practices that communicate and reinforce the organization’s

culture and values, including recognition of outstanding performance

Hewitt Associates

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Recognition types

• Peer Recognition

• Formal Recognition

• Program design by staff

• Nominations from staff

• Award selection by committee

• Limited involvement of administration

Design Goal:

Peer Recognition

• Awards Ceremony.

• Citation, certificate and cash award.

• Luncheon.

• Pictures on webpage,magazines.

Design Goal:

Formal Recognition

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Achievements Recognized by Fortune’s 100 Best Companies to Work For

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Outstandingindividual/ team

performance

Anniversaries/service

Goal achievement Project completion Meeting/exceedingfinancial target

Patents/ innovativeideas

Managerial/Professional Employees Hourly/Administrative Employees

Percent of

Companies

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Awards Used by Fortune’s 100 Best Companies to Work For

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Communication Parties Cash Prizes Time Off Trips Stock

Managerial/Professional Employees Hourly/Administrative Employees

Percent of

Companies

Reward & recognition approach –outcomes

• Reduced level of employee turnover – down to 10% on average;

• Reduced levels of sickness absence being sustained per yr.

• Improved recruitment into HR practises;

• Reduced business mileage due to travel for work plans being integrated into reward strategy;

• Improved employee satisfaction levels: 73% satisfied;(Source: Ipsos MORI 2007 Survey - compared to 62% LA / public sector comparators and 63% overall).

• Improved employee advocacy about the Council as an employer: 50% speak highly;(Source Ipsos MORI 2007 Survey - compared to 33% LA / 41% overall).

• Satisfaction with reward and benefits (excluding salary): 67% satisfied;(Source Ipsos MORI 2007 Survey – compared to 58 % LA/public sector and 58% overall).

Future Reward and recognition Challenges

• Implementing Annual Total Reward Statements, delivered via e-business suite;

• Implementing more ‘flex’ in the benefits offering and enhancing the choice for individual employees, e.g. trading salary for extra holidays, benefits package for ‘carers’ and not just childcare;

• Increasing the level of workforce knowledge and skills around reward by offering financial education for the workforce in partnership with the Financial Services Authority

• Renewed focus on internal communication and manager role in the ‘reward relationship’;

• Changing the nature of our reward delivery with the implementation of a Shared Service joint venture;

• Doing it all within tighter resource constraints!

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Reward and Recognition Program Design

• What?

• Why?

• Characteristics of a Successful Program

• Plan Design Steps

• Best Practices Examples

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Trends and Best Practices

• Rewarding teams and individual • Realization that some employees value recognition as much as merit

increases and bonuses• Employees recognizing employees• Greater use of informal/spontaneous awards• Improved publicity of winners

Biggest obstacle to success:• Communication• Management support

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Characteristics of Successful Programs

• Senior management support and involvement• Include employees/managers in design and implementation• Keep programs simple and easy to administer• Tailor rewards to individual interests, needs, desire• Match the reward to the achievement• Communicate, Communicate, Communicate!• Be timely and specific• Make sure each employee understands what they did to earn the reward