Organizations should tailor their employee rewards and recognition programs based on the needs of their business and their workforce for greater effectiveness. There are a number of reasons for customizing an employee recognition program – a one-size-fits-all approach would never work.
The Need for Customizing an Employee Rewards and Recognition Program
Every organization’s business and workforce are unique in many ways.
What motivates employees in one organization might not work in another organization.
The profile and the expectations of the workforce differ from one organization to the other. To top it, the program goals and expectations may differ significantly between organizations.
A mismatched program might be worse than not having a program at all!
This is why:
1. Creates Confusion
A program that does not reward and recognize the appropriate achievements of the employees that are in alignment with the organization’s overall goals can create significant ambiguity and confusion in the minds of the employees, resulting in loss of motivation.
For example, if an organization has productivity or process improvement as one of their key business goals but does not recognize such efforts, employees are likely to no longer feel motivated to pursue such goals themselves.
2. Loss of Trust
Employees might perceive a mismatched program as an eyewash rather than a genuine effort on part of the organization to appreciate their efforts; resulting in a loss of trust and commitment towards the organization.
For example, in a dynamic environment like customer service, if there are only annual awards and no spot awards or other awards with a shorter horizon, employees might perceive that the program is not genuine and unfair.
3. Dilution of Culture
If the program does not promote the right behaviors that in alignment with the core values of the organization, it might lead to a dilution of the organization’s culture.
For example, if an organization wants to promote a culture of collaboration but only recognizes individual achievements, it is likely to send out a wrong message to the employees.
4. Low Employee Engagement
Employees might completely overlook a program that does not meet their needs or expectations, and may eventually stop participating in it. Any attempts to push them in that direction might be met with resistance and negativity.
For example, if the workforce consists largely of millennials and the rewards are just trophies and mementoes, it is likely to have no impact or even negative impact on the employee motivation.
What are the Key Reasons for Customizing an Employee Rewards and Recognition Program?
While it is clear that a generalized approach to designing an employee rewards and recognition program is unlikely to work, organizations still find it challenging to understand the various factors that need to be considered for customizing a program to their specific needs.
Here’s a look at the top ten reasons for customizing an employee recognition program for an organization:
1. Type of Industry
Whether the organization operates in the manufacturing, technology, business or consumer services industry would play a key role in designing the employee recognition program.
The type of industry largely determines the key performance areas of the employees and hence, the employee rewards and recognition programs should be tightly aligned to them.
For example, in the manufacturing industry, employee achievements related to productivity, quality and safety should definitely be acknowledged.
Whereas, in the consumer services industry, organizations need to recognize acts of customer centricity.
2. Organization Size and Structure
The organization needs to consider the overall size of its workforce and complexity of its structure while designing the reward and recognition program.
For example, a small organization can have a single rewards and recognition program and a common decision-making process across the entire organization.
Whereas, a large organization that comprises of multiple units, should have a multi-level structure to the program where decision-making is done at the unit level. There could also be unit-specific programs and ‘corporate programs’ that cut across all units.
3. Geographical Distribution of Workforce
The employee rewards and recognition program needs to be tailored based on whether the workforce is located entirely in one work location, multiple work locations, or even across the world. In fact, in the current context when employees are working remotely in most organizations, multiple locations should be considered while designing any program.
For example, an organization which has its workforce distributed across multiple countries in the world should consider the decision-making process for most awards to happen at the country-level.
The organization could also consider running country-specific award programs or customize at least a portion of it based on the needs of each country. Possibly, there could be a few global awards with clear nomination and evaluation criteria.
4. Demographic Profile of Workforce
The demographic profile of the workforce in terms of age group, gender mix, and educational background, is a significant factor that needs to be taken into consideration while developing the organization’s employee rewards and recognition program. These variables tend to play an important role in understanding the expectations of the employees from the program.
For example, if a workforce has a significant proportion of Gen Z and millennials; then they are likely to expect elements of digital experience, gamification, instant gratification and social visibility in the program.
Whereas a more mature workforce is likely to expect greater personal touch, more meaningful and personalized rewards, award ceremonies, etc.
5. Cultural Background of Workforce
Considering the ethnic and cultural background of employees while designing the rewards program for employees is of great significance. It helps in ensuring that the organization does not unknowingly hurt the sensitivities of a particular ethnic or cultural group; and it rewards and recognizes them in a way that is acceptable to them.
Many aspects of the program design need to be looked at carefully, keeping in mind the expectations and acceptability of different cultural groups within the workforce.
These should include right from the name of the program, name of the awards, use of monetary and cash awards, award ceremonies, etc. There are cultures where cash awards are looked down upon and vice-versa.
6. Nature of Work and Compensation Levels of Workforce
Another set of important factors to be considered while designing a rewards and recognition program are the work profiles and compensation levels of the employees.
The work profile or business function of employee would largely determine the key performance indicators of the employees, which should form the basis of the rewards and recognition program.
Different business functions even within the same industry might have different performance indicators. Similarly, the compensation levels of employee would determine the importance the employees are likely to attach to monetary value of the awards.
For example, employees in customer-facing jobs like customer service should be rewarded and recognized for going the extra mile to solve customers’ problems.
Whereas, employees who work in software development should be recognized for solving technical problems quickly, and for creating positive impact on the project delivery.
Similarly, employees with lower compensation levels might be more motivated by monetary awards, as compared to pure non-monetary awards.
7. Organization Values and Culture
For an employee reward and recognition program to be truly successful, it should be integrated with the organization values and culture. The program should recognize and reward behaviors that the organization wants to promote, those that are in alignment with their core values.
For example, if the organization’s core values include collaboration, then the recognition program should include team awards or awards that have teamwork as the key criteria.
Similarly, if innovation is one of the core values, then the organization should reward and recognize new ideas, process improvement, and other such initiatives.
8. Organization Goals and Business Strategy
The rewards and recognition policy must be aligned to the business goals and priorities of the organization. Even within the same industry, different organizations might have different business strategies depending on their market leadership position, growth strategy and business goals.
For example, an organization that wants to grow by introducing new and innovative products should encourage new product ideas from employees by rewarding and recognizing them for those.
Whereas, an organization that is looking to grow by entering new international markets should reward and recognize employees who can work in a start-up mode, handle ambiguity and collaborate with the rest of the organization.
9. Leadership Philosophy and Style
Business leaders play an important role in ensuring the success of employee rewards and recognition programs. Their style of leadership, their beliefs and expectations are important factors to be considered in the program design, as leadership involvement in the program is critical for its success.
For example, if the leaders strongly believe that personal touch in recognition and personalized rewards are important, then those aspects should be taken into consideration in the design of the program.
Otherwise, the program is likely to see less leadership involvement or the implementation itself might not get signed-off at all.
10. History of Similar Programs/ Initiatives
Organizations must take into consideration their experience with similar HR initiatives that might have been launched in the past. Their impact, feedback, challenges and other learnings should be incorporated in the design of a new rewards and recognition program.
For example, if the organization had launched an employee engagement program in the past, that didn’t go down well with the employees; then they should try to analyze the key reasons for its failure and carefully consider them in the design of a new program for employee rewards and recognition.
There are a number of key reasons for customizing an employee recognition program to meet the needs of the organization and its workforce.
A customized employee rewards and recognition program is likely to deliver much higher impact, due to its higher relevance to the employees and to the business.
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