Although all organizations today aware of the importance of rewarding their employees; but, when it comes to actually building an effective employee rewards program, most organizations are unaware of where to begin.

Discussed below are some useful tips for setting up an effective employee rewards program:


1. Learn What Motivates Employees

Temperaments and personalities of employees can differ significantly. This essentially means that what they value and derive motivation from can be quite distinct. Despite these differences, employees from the same business unit or team share common motivation factors.

Learning about these general motivation factors can help in establishing a strong base for designing an effective employee rewards program. Otherwise, it is quite impossible for organizations to figure about what motivates individual employees separately.

The organization could do a basic analysis of the data collected through an employee survey to understand the most common motivation factors.


2. Set Meaningful Rewards Criteria

Importantly, a successful rewards program is one that is based on meaningful criteria to avoid biases or random actions. Only hard work and commitment should be eligible for employee recognition.

Employees who have good relationships with their managers or team leaders should not be favoured for the rewards. Most importantly, each employee should have sufficient opportunity to receive recognition, irrespective of their level and role within the organization. Employees would be considered for the reward only if they fulfil a clearly defined criteria.


3. Form a Review Committee

Irrespective of the size of an organization, forming a committee to oversee the employee recognition program is highly advisable. The committee may consist of just a few senior and mid-level managers, to begin with. The organization can change the size of the committee at a later stage if they feel the need for the same.

It is important that the members of the committee should be known for their honest and unbiased decision-making capabilities. It is also essential for organizations to promote the concept that serving on the committee as a matter of privilege and pride.

This in itself can prove to be a reward for the employees who get the opportunity to take up the role.


4. Involve Team Leaders and Line Managers

When it comes to assessing the overall performance, contribution and achievement of employees, the feedback of their team leaders matter the most. Hence it is essential for the organization to ensure the involvement of the team leaders in any rewards program to make it truly effective and successful.

However, most organizations commit the common mistake of seeking inputs only from the HR, and ignoring the opinion of team leaders and line managers. Hence, this diminishes the effectiveness of the rewards program as the line managers have first hard knowledge of the work, performance parameters and the needs of the employees. This combined with the strategic viewpoint of the HR and management can add a lot of value to the program.


5. Know the Characteristics of a Good Rewards Program

Here are a few important points of a good recognition program:

– Should be timely; as any delay in rewarding and recognizing diminishes its value.

– It should follow a regular schedule integrated with the business operations.

– Should be specific, which means that it should aim to acknowledge some particular achievement or contribution of the employees.

– It should have some tangible value so that the employee continues to feel motivated even after receiving the reward.

– It should be value-based so that employees feel motivated to work towards common objectives.


6. Make the Program Multifaceted and Diverse

Additionally, creating variety in the rewards and recognition program keeps the concept fresh and exciting for long. Employees tend to feel a sense of curiosity about the program that enhances their enthusiasm about participation in the program.

However, care should be taken that the variety is not achieved at the cost of hurting the sensitivities of specific members of the workforce. This can render the whole program ineffective and even make the employees feel demotivated.