As we move towards recovery post-recession, but with a renewed focus on cost cutting and tighter processes, how important is a company’s reward policy? Kevin Harrington explores the link between staff reward and employee engagement, and how organisations can link these up to pen a reward policy that ensures a productive and motivated workforce.
Kevin Harrington, consultant, Sodexo Motivation Solutions a former group marketing director for the BBC and product group marketing manager for Sony UK, Kevin is now responsible for the development of Sodexo Motivation Solution’s brand across all channels in the UK market. Kevin is a fellow of the Chartered Management Institute, a member of The Chartered Institute of Marketing and a member of The Marketing Society.
Cost-cutting versus high performance
The recession has left employers scrambling to cut business costs, yet many are still pushing for higher productivity from their employees. During such turbulent times, companies can often lose their focus on employee motivation. However, if employers simply push their staff to perform better – without providing them with the appropriate incentives to do so – the effect on productivity and staff morale can be devastating.
Now is the time to focus on staff motivation. As companies begin to fight their way out of the economic downturn, priorities need to shift dramatically from merely keeping afloat to maintaining a high level of customer service and ensuring productivity among all members of staff.
Ensuring staff motivation levels are tip top
To recover from the recession successfully, companies will need to ensure that they are consistently outperforming the competition. To achieve this goal, businesses will need to ensure that they are truly engaging with their staff, as this commitment will be essential to gaining and maintaining a competitive edge.
The mindset of the employee has become increasingly important in this regard. Staff members may lose motivation if they are chained to their computers all day, five days a week, for long lengths of time. Employers need something to break up the monotony and ensure that their staff remain engaged. The good news (especially for cash-strapped businesses) is that employee incentives are not limited to financial rewards alone.
Being creative with rewards & incentives
In the current economic climate, extra cash for bonuses can be hard to find. However, whether it’s for an annual bonus or for regular acknowledgment and encouragement, senior managers have access to a wide range of alternative, cost-effective incentives and flexible benefits to offer to their staff.
For example, for employees with children, childcare vouchers (which come under the Government’s scheme to help parents pay for their childcare) may be extremely useful. These vouchers are valid for children up to 15, are exempt from tax and National Insurance, and can help pay for everything from boarding school fees to holiday camps. For employees without children, retail shopping vouchers can provide a great way to motivate staff, and a good alternative to handing over a cheque. People often feel that they are receiving something for themselves with a retail voucher, as opposed to a cash bonus, which often goes towards paying bills or other family essentials. Most retail vouchers allow staff to spend their bonus at a wide variety of outlets, from Boots to House of Fraser. They can even be used at holiday parks for a well-deserved getaway.
Supporting a charity on a company-wide basis can also be a very effective way of encouraging leadership within a team. Quite apart from the ‘feel-good factor’ that each participant will enjoy, encouraging charitable work often allows management to identify natural leadership skills that are brought out by this kind of initiative. This type of event also gives senior managers and team leaders a good opportunity to work together with their staff towards a common purpose that is not necessarily work related.
Impact on motivation, focus and performance
Reward is an important component of engagement, as is flexibility. More than half of employees who report feeling ‘engaged’ with their employer have no plans to leave their current organisation, and only 4% are actively seeking a new job, according to Towers Perrin. Of those employees who report feeling disengaged, 28% are actively looking for another job, while only 15% say that they have no plans to leave. To keep up employee engagement, relevant rewards and benefits programmes need to be implemented. Clearly, employees who are unhappy at work are likely to move on and find a place that better meets their needs.
Also, with a more motivated team, better customer service can be provided. According to the CIPD, 70% of engaged employees claim to have a good understanding of customers’ needs, versus only 17% of non-engaged employees. As such, making sure that employees are happy at work can help to improve client relations dramatically, whilst also boosting employee retention at the same time.
The link between absenteeism & motivation
Another key area for employers to focus on is staff absenteeism. According to a survey by the CBI, absenteeism from work cost the UK nearly £17bn in 2009: an average of £595 per employee. Worse still, only one-third of employers surveyed felt that this sick leave was genuine.
This again leads to the question of morale among employees, and what an employer can do to keep up motivation and prevent unnecessary (and costly) absenteeism. According to Gallup, the average number of sick days taken per year by engaged employees (2.69) is significantly lower than the number taken by disengaged employees (6.19).
Absenteeism has improved somewhat in the last couple of years. This may be partly due to the recession, as perhaps employees are more worried about keeping their jobs. As the recession begins to ease, however, some employees may have the opportunity to slip back into their old habits. To counter this, employers need to keep employee motivation and rewards in mind. After all, a happy employee is a productive and present employee.
Reward – not all about cash
For all of these reasons, employee motivation should be a key priority among employers, and senior managers should remember that rewards for their staff don’t necessarily have to break the bank.
Events, retail vouchers, flexible working and other, more creative benefits can have just as much effect on staff motivation, and also help to ensure that key employees are retained