Looking for ways to boost morale, productivity and retention? Spot awards may be the way to go.
They are the most well-liked recognition incentives among employees, a recent research study shows. The best part - the incentives typically amount to less than 1 percent of base pay. That also can makes this choice attractive to C-levels. And the awards don’t even have to be given in cash.
Spontaneity grabs â..em
Traditional end-of-year or quarterly bonuses cost businesss an typical of 10 percent of base pay yet often have a lower payoff in morale and retention.
Reason - Workers appreciate them less because they expect to receive them for reaching certain goals. By their nature spot awards are spontaneous and compensated out immediately. Honorees are pleasantly surprised and see the corporation values their work.
Here are four keys to successful spot bonus programs, as reported by benefits consultant Ken Stahlmann -
1. Creativity is crucial
The most effective programs ordinarily give out awards weekly or monthly. To avoid over-stretching the budget â.” and avoid a ho-hum attitude establishing in â.” creativity is a must.
One way that never gets old - combining time off with a second, non-cash award.
Example - One firm gives a half-day off in combo with movie passes once a month. Another, at weekly staff meetings, holds a random drawing for a dinner gift certificate, plus permission to leave work early once.
2. Make it personal
Rewards have more lasting impact when they’re geared to individuals ’s personal needs or interests. Two examples -
o one firm with many foreign-born, low-wage staff awards a $20 pre-compensated phone card after 90 days of service, and a $100 card for outstanding work, and
o Another firm with a lot of sports nuts took several top-performers to a ball game. Managers said it was the best $200 they’ve ever spent as for building ongoing enthusiasm.
3. Add structure
The awards may seem spur of the moment, but the most effective programs have a fixed budget and structure set before anything is handed out.
Example - One retail firm awards “points” for good work. Folks can then trade in their points for store merchandise. By letting people bank points for additional valuable rewards, the company saw a solid jump in retention.
Other businesses prefer to let staff members reward each other. for instance, a small health care provider keeps a “goodies box” onsite â.” compensated for in petty cash and stocked by staff members themselves.
When someone spots a coworker going the additional mile, he or she pulls out a prize and awards it.
The program is a gigantic hit - It’s immediate and personal, yet structured.
4. Don’t let good intentions backfire
Most spot awards go over well. But keep these issues in mind -
o For most cash or cash-value awards, there are tax implications (just as with traditional bonuses)
o Awards need to be spread around or else resentment can creep in
o Make sure honorees don’t mind being the center of attention (some firms have accidentally alienated people they tried to reward), and
o Make certain the reward is something people actually want. One firm that awarded a VIP parking space next to the CEO found no one used it. No one wanted the CEO knowing what time he or she came and left.
