When is Compensation not Enough? Rethiinking how to Rewand the Workforce

Abstract

Most organizations reward employees (merit increases, incentive payouts) on a 12-month cycle. Unfortunately, employee-produced results do not tend to occur in neat 12-month cycles. Organizations need to provide rewards that are more timely and closely linked to employee results. For example, by using both cashand noncash-based reward and recognition programs, organizations can tailor their programs to better suit both the importance and timing of a particular accomplishment. Before designing reward and recognition programs, an organization must decide what it is willing to reward; i.e., what results it needs employees to produce and what types of behaviors they must demonstrate. There are three basic steps in developing effective reward and recognition programs: 1. Design a program that gets "internal customers" (employees) excited. 2. Match the reward to the expected outcome. 3. Recognize when a program no longer works. The author provides an extensive explanation of how to follow these steps.