A well-designed employee rewards system can enhance productivity, growth, and profitability by motivating the workforce to go that extra mile. However, developing a strategic employee rewards program organizations are often faced with this dilemma. Whether to reward employee performance or behavior?
We take a deeper look into this subject to help organizations address this concern:
Both performance and behaviour of employee are critical to the success of organizations. Employee performance is usually measurable in terms of the business metrics or output against predefined goals. In fact, employee performance has direct linkage to the performance of the organization.
Since the ‘proof of the pudding is in its eating’. It is almost a no-brainer that traditional employee rewards systems have always rewarded high performers. As it is, organizations have regarded these top performers as the biggest contributors to business growth and profitability.
However, of late, organizations have also come to acknowledge the importance of good employee behaviour. They have understood that ‘the means to the end’ is as important. This is because employee behaviour can impact workplace culture and goodwill significantly in the long run.
This is why an increasing number of organizations have made desirable behaviour as an integral part of their rewards systems. Hence, by appreciating specific behavioural traits, organizations can motivate employees to align their behaviour with the company core values and culture.
The performance of employees ultimately determines the success of the organization. An organization with more high-performing employees is likely to grow faster, be more profitable and garner higher market share.
Performance of individual employees, as well as teams, is measured against goals, defined in terms of business metrics or outcomes. The following is a list of such key metrics that define the goals and performance of the employees:
– Sales/Revenue
– Customer Satisfaction/ Experience
– Output/ Quantity Delivered
– Quality of Deliverables
– Timeliness of Delivery/ Productivity
– Innovation/ Process Improvement
Unlike employee performance that can be clearly defined as KPIs and goals, it is more challenging to define desirable behaviors. However, organizations today have understood the strong linkage between employee behavior, work culture and the long term business success.
Employee behavior can impact employer brand value of the organization and its ability to attract, hire, and retain top talent.
Here’s a list of key aspects of employee behavior that are strongly linked to the success of any organization:
– Collaboration: Ability to work with their co-workers, peers, and supervisors in a smooth and coordinated way.
– Initiative: Willingness to take up new challenges to bring about positive changes in the business or at the workplace.
– Positivity: Ability to always stay upbeat and optimistic, even during a crisis.
– Timeliness: Ability to stay focused and complete tasks on time, every single time, despite challenges.
– Consistency: Strong will and persistence to deliver even under challenging situations.
Organizations have traditionally rewarded employees for their good performance. However, this mindset has changed over the years as they realize the importance of employee behavior, company values and work culture for long term success.. Hence, many organizations have incorporated employee behavior as a key element in the employee reward systems in recent times.
Organizations are now looking at a more balanced approach to rewarding employees; considering performance as well as behavior.
The following are a few pointers for organizations in this regard:
– Reward systems should give fair weightage to both employee performance and behavioral traits.
– Organizations should ensure that these behavioral traits are in alignment with company values and desired work culture.
– Employee performance should continue to be measurable against business goals in form of key business metrics.
– The employee rewards system becomes more balanced, so that it rewards both ‘ends’ as well as ‘means to the end’.
Organizations faced with the dilemma of whether to reward employee performance or behaviour need to take a more balanced approach of rewarding the contributions of the employees towards achieving business goals as well as towards creating a more positive work environment.
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