Employee good work attracts not only job appreciation but something more than that. This something in corporate can be named as Reward. As per the latest trend employer appreciate good work done by employees in a special way. The ways of sharing their appreciation however differ. In order to have a systematic approach towards the appreciation of rewards, there is a need for reward and recognition policy.
Employees besides wanting a good salary, friendly environment, growth opportunity also want to be appreciated for the outstanding work performed by them. Reward and recognition play a major role in attracting and retaining talent within the organization. It not only acts as a morale booster but also promotes 3 P's i.e. Productivity, positivity, and promotion. Such kind of programme builds up motivation in the workplace. However, an effective reward and recognition programme cannot work in isolation. It needs to have collaboration from employee managers and senior management. The role each one of them plays in making reward and recognition a success is explained below.
| Senior Management | Managers | Employees |
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Recognition can be given by a large number of ways. Praising is inexpensive. A good reward and recognition programme should be.
Significant: Rewards must be based on values, goals, and priority.
Flexible: Reward programme must be flexible. It must be as per the demand of time and place.
Personal touch: Whatever is the kind of reward formal or informal, it is necessary to have a personal touch.
Timely: An employee should be rewarded on time else credibility is eroded with the passage of time.
Genuine: The appreciation must be genuine.
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Index
Aim
Purpose
Scope
Definitions
Component of reward structure
Steps for development of effective reward structure
Why reward employees
Parameters for reward programme
Most important steps for reward and recognition
key
Reward and incentive
Nominations
Selection
Effectiveness of policy
Review of policy.
Aim: The major aim of reward and recognition policy is to attract and retain the best talent. In order to attract and retain it becomes important to recognize the efforts put in by the employee in terms of performance, attitude, and achievements.
Purpose: The purpose of the rewarding performance is to build up an organizational culture where good work done by employees is valued and their tremendous efforts are recognized.
Scope: This policy is applicable to all the regular employees of the company.
Definitions:
Reward: Cash or noncash award given for outstanding performance by the employee.
Reward and recognition: Reward programme developed and communicated by the HR department.
An Important component of a reward programme
Managers
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Employees |
To exhibit the values of the organization in their day to day work. Meetings targets assigned to them. |
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Proper and fair treatment for all team members. Efficiently recognizing team and individual employee efforts. Monitoring employees performance |
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HR Department
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To ensure the policy is followed in a fair and equitable manner Monitoring of effectiveness and cost of the policy Communication of policy Coordination for nominees assessment Supporting values and embedding them in everyday’s life.
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Senior Management |
Effective implementation of policy |
Rewards and incentives are beneficial both for the employee as well as the employer. When employees are recognized for their best performance and productivity employees have increased morale, job satisfaction and increased involvement in the organization. With the help of workplace rewards and incentives, both employer and employee enjoy a productive and positive work environment.
a) Incentive means something which encourages a person to do something.
b) the Incentive is a performance linked reward to improve motivation and productivity of the employee.
c) Incentive includes the extra pay for exceptionally good rewarding work in addition to regular wages of the job.
The types of incentive include the monetary incentive and Non- monetary incentive.
Monetary Incentive: Monetary incentive means a kind of incentive that pays for good performance of employee through Money. Monetary incentive includes Merit Pay, profit sharing plan, Pay and allowance, commission, stock option, bonus, suggestion plan and perks, fringe benefits and perquisites.
• Non-Monetary Incentive: Non-monetary incentive is given to an employee for best performance through perks and opportunities. These are valuable to the employee as they result in the increased morale of the employee as they get to learn new skills and can pursue the advance opportunity. It is not necessary that only money is the motivator, when the Non-monetary incentive is rewarded to the employee it results in satisfaction of self-actualization and self-esteem needs.
Rewarding work is always a strong motivator.
Non-monetary incentives include 2 types of rewards
• Formal rewards: Formal rewards are being used for rewarding employee performance within set defined guidelines. There are various ways to recognize employees work in formal ways. For example Career advancement, job enrichment, employees participation, diamond star, Year of service award, peer to peer recognition, Celebration chart, Formal letter of appreciation, team trophy, one dedicated corner in company's newsletter etc. Formal rewards are an alternative to the spontaneous rewards which are given on an immediate basis, formal rewards are more planned as compared to non-formal rewards.
• well done, Give an employee more autonomy, Offer flexible work schedules or work options, Giving employees with a computer upgrade, mentor other colleagues etc.
| Types of Monetary incentive/Reward | The Process to be followed | Parameter basis which reward is given | Approval | No. of rewards |
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Merit Pay |
It depends upon the job assigned. Higher the performances better the reward. |
Rewarding performance of an employee
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HOD, Director, Finance, and HR. |
5 |
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Profit sharing Plan |
Company offer share in the profits to the employee as a common incentive for giving motivation in the workplace. |
High level of extraordinary work is rewarded.
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HOD, Director, Finance, and HR.
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2 |
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Pay and allowance |
Pay hike and allowance are linked with the performance of the employee. |
Extraordinary efforts put in by an employee in a given task. |
HOD, Director, Finance, and HR. |
Depends on the individual to individual
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Commission |
The Commission is offered to employees generally working under the sales dept. More order means more commission. |
The Individual with special skills is recognized and rewarded.
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HOD, Director, finance, and HR.
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Top 5 performers in the sales department
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Stock option |
Many companies that offer a share in management or participation in management along with the share in profit as an incentive to get efficient working from the employees. |
Exhibition of leadership skill is another way to reward employees. Leadership skills used in getting the complex job done demands reward.
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Management decision in consultation with Director finance and HR.
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Depends on the company to company setup. However, the number cannot exceed 10% of total employee strength
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Bonus |
When an employee reaches the target or exceed the target then they are paid the extra amount, this extra amount is known as the bonus. |
Extraordinary efforts put in by an employee in a given task.
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Management discretion
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Depends upon the employee strength
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Suggestion Plan |
This is another type of incentive in which an employee is rewarded if any suggestion given by employee gives gains to an organization.
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One time outstanding idea which helped the company as a whole.
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Director, HOD, HR.
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1 |
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Extra benefits like medical facility, free education, housing facility. |
These are related to the performance of an employee
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The Employee has done a job well despite being complex; such employees are appreciated and awarded. |
Director, HOD, Finance, and HR. |
5 |
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Type of reward |
Process |
Approval |
No of rewards |
Parameter is chosen |
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Personal or Verbal thank you |
The immediate manager say a thank you or send a thank you card |
No Approval
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No Limit but should be done only for extraordinary work. |
Work was done above normal duty
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An email or personal note to an individual |
Sends an email appreciating employee work with a cc to the whole team |
No approval
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Same as above
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The Outstanding effort which benefited department as a whole |
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Sharing achievement in team meetings |
Achievement shared in Team meeting generally shared by the department head. |
No approval
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Same as above
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Higher quality work consistently
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A day off for a job well done |
Extraordinary work done by the employee, a day off given to the employee |
HOD approval
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Same as above
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Any extraordinary work is done which has increased the image of the department |
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Flexible work schedule |
Flexible work timings are given to the employee for a period of one month. |
HOD approval |
Same as above
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Exceptional contribution in getting the work done |
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Level |
Types of Reward |
Norms to be followed |
Approval |
Duration |
No. of rewards |
Parameter basis which reward is given |
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Pan India |
Career advancement |
Manager motivates employees to give their best performance so they can be promoted to the next level. |
Immediate manager and HOD |
Yearly |
Manager need to confirm names of employees for promotion however it can be given only to a few employees depending on extraordinary work |
Doing service above the normal routine with good performance track |
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Pan India |
Job enrichment |
Challenging assignment given |
Immediate manager, HOD, and director |
Yearly |
Only too few ones |
Doing work more than own duty |
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Pan India |
Employee Participation in decision making |
Having a say in decision making encourage employees to work more sincerely |
Management and director decision |
Yearly |
Very rare, only to one or two employee |
only to exceptional extraordinary talented employee |
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Pan India |
Diamond star |
Employee recognition by giving mementos |
Immediate manager, HOD, and director |
Yearly |
The Employee who has done the job well despite being complex |
5 |
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Pan India |
Year of service award |
Award is given when an employee completes the certain number of years in service |
HOD and director |
Yearly |
Long service stay |
As per demand |
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Branch level |
Peer to peer recognition |
Award is given to the employee by an employee |
Immediate manager and HOD |
Yearly |
Helping others even after fulfilling one's own duty |
As per demand |
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Branch level
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Celebration chart |
Post it pasted, extraordinary work recognized by writing notes on celebration chart |
Immediate manager and HOD |
Monthly |
Extraordinary work performed by an employee/team |
As and when required |
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Branch level
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Framed letter of appreciation |
The Formal letter of recognition, duly signed by senior mgmt. |
HOD and senior management |
As and when required |
Higher quality work consistently |
As and when required |
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Pan India
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Team Trophy |
The Trophy is given to a team |
HOD, Director |
In a yearly event |
Exceptional work by the team |
5 |
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Branch level
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The dedicated corner in company's newsletter |
Monthly space in the wall of fame |
Immediate manager, HOD |
Monthly chosen for each branch |
Outstanding performance by an employee |
1 |
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Branch level
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Team training |
Special training session organized for the team |
Immediate manager, HOD, Director |
Yearly event |
The Initiative was taken by the team to work on special projects |
5 |
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Branch Level |
Team lunch with CEO |
The Team has overachieved targets assigned to it |
HOD/CEO |
Yearly |
Overachievement of target |
Best 3 teams |
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Pan India |
Achievement published in the employee newsletter |
Exceptional performance by an employee which has benefited department as a whole |
Immediate manager and HOD |
Monthly |
Work that has benefited the department as a whole |
1 |
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Branch level
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Team Jersey |
The Special task performed by the team, details mentioned at the back of the jersey |
Immediate manager, HOD, and HR |
Yearly |
The Special task performed by the team, |
Best 3 teams |
Budget: Budget will be allocated by the finance department. The finance department is responsible for allocation of budget in a fair and equitable manner that all employees have equal opportunity to benefit from the reward. The Budget may be reallocated as appropriate.
Selection criteria must be documented as part of the Employee Reward and Recognition Program. The Finance department may designate an individual or committee, working in conjunction with the Human Resources Representative, to develop specific award standards and selection criteria, and to nominate or select award recipients.
The effectiveness of policy is monitored by the HR team to ensure the policy is applied fairly.
Review of the policy:
The policy may be reviewed at any time on request of staff or management but will be reviewed yearly automatically.
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Purpose: reward and recognition policy is designed to encourage employees whose performance is outstanding either individually or through teams that contribute to the overall objective of the organisation and also to lay down guidelines regarding” how to reward employees”.
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Objective: The objective of reward and recognition policy is to promote motivation in the workplace and to build up culture that is conducive for achieving organisational objective and to make employees feel valued and appreciated for their good work done. It is meant
To promote reward and recognition of the employees
To appreciate and recognize value added contribution of the employees.
To acknowledge individual and team contribution.
Timely appreciation to foster work quality.
To award staff appreciation for the good work done
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Principle: Basic principle followed for reward and recognition policy is mentioned below:
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Eligibility for Reward and Recognition Following criteria must be fulfilled before an employee become eligible for reward and recognition
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Qualifying outcome for reward and recognition
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Reward and Incentives at the workplace Reward and incentives are beneficial both for the employee and the employer. It not only increase motivation in workplace but also energises employee to work with proficiency. Generally this question do occupy minds of managers that how to reward employee? Rewarding performance is an art. This reward and recognition policy is designed for employee rewards and recognition programme. Such Staff appreciation results in increasing employee efficiency and an increase in sales and productivity. An effective incentive programme must include both monetary as well as non monetary incentives. .With rewards and incentive employer and employee enjoy a positive and productive work environment. An incentive programme which recognizes individual achievement in addition to team performance can provide extra incentive for employees.
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Ways or Types of reward & incentives:Monetary Incentive Reward - Various types of monetary incentive reward includes Variable pay, bonus, profit sharing and Stock Option. Details on the same are mentioned below.
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Variable Pay: Variable pay can be tied to the performance of the company, any organisational accomplishment or an individual performance or both. It is given as one time reward. Still it is one of the motivational programmes for reward and recognition. Details of variable pay can be referred in Compensation and benefits policy.
Bonuses: Bonus is used to reward individual accomplishment. It is one of the most commonly used types of incentive. By rewarding performance of an employee for previous year, bonus gives motivation in workplace.
Profit Sharing: In this money is disbursed by taking a certain percentage of employee salary. This is credited to employee account at the end of financial year. It is given in Cash form. This employee reward motivates an employee to work beyond normal duty to improve upon business performance. However these types of incentive require an employee to vest certain number of years with the organisation before receiving any money.
Stock Options: This reward and recognition method is very popular nowadays. In these types of incentive an employee has the right to buy a specified number of a company’s share at a fixed price for a specified period of time. The question does arise on how to reward employees so that they remain motivated for a long time. Stock option is the answer.
Stock options are authorised by a company’s board of directors and approved by its shareholders. This employee reward is given by a certain percentage of the company’s shares outstanding.
Non monetary type of incentive: Non cash reward programme works better than cash as it promotes improvement in team work, increasing customer satisfaction and motivation in workplace among other programmes. Reward and recognition has a timing element. It is must to occur for staff appreciation. if High
rewarding performance continues then reward & incentive can be one of the factor for it. Both reward & recognition programmes have their place in business. By rewarding performance business will have an edge in competitive market place. Non monetary incentive reward employee performance with opportunities other than related to monetary incentive. It includes flexible work hours, training opportunities and ability to work independently. Such programme motivates employee as there is learning of new skills and pursuing the advance opportunities
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The Various types of non monetary rewards & incentives:
Employee rewards have been divided into following categories. Branch Level Reward: This includes Individual level Reward and on the spot rewards and given for rewarding work. Regional level Reward: This includes rewards given to Best Teams at regional level. Pan India level Reward: This includes Employee of the year reward, Invention of the year award, cost saving strategy of the year, most efficient operations award, employee engagement practice of the year.
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Types of Reward |
Criterion |
Level |
Purpose |
Approval Required |
Timings of the Reward |
Felicitation |
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Certificate of Recognition |
Any work done by the employee exception ally well |
Branch Level |
To recognize individual efforts for doing work extra ordinarily |
Immediate Manager HOD |
As and when required quarterly basis |
Event organized at branch level |
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Linked in Recommend action |
Individual possessing the highest talent with extruding any skills |
Branch Level |
To recognize individual efforts for doing work extra ordinarily |
Immediate Manager HOD |
As and When Required |
Linked in Recommendation as and when required |
“ON THE SPOT “Reward
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Types of Rewards |
Criterion |
Level |
Purpose |
Approval Required |
Timings of the Reward |
Felicitation |
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Company apparels
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Going extra mile and performing work beyond own duty |
Branch Level |
To motivate and inspire the employee |
Immediate Manager/HOD |
Instantly |
As and when required |
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Lunch with HOD / Senior Management Team
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Any Innovative idea which has helped achieving the given task at hand |
Branch Level |
To recognise employee skills held |
Immediate Manager/HOD |
Instantly |
As and When required |
Regional Level Rewards
“Team of the region “
It includes “Employee of the year award “, “Invention of the year award”, “Cost saving strategy of the year Award ”, “Most efficient operations award ”, “Employee engagement practice award “Best safety practice award”.PAN India level rewards
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Types of Reward |
Criterion |
Level |
Purpose |
Approval required |
Timings of the Reward |
Felicitation |
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Employee of the year award |
Excellence in all spheres of the work done |
PAN India |
Recognize commitment towards setting excellent benchmark by an individual |
Senior Management |
Annually |
PAN India event |
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Invention of the year award |
Excellent initiative to improve upon Process/ Practice |
PAN India |
To recognize the initiative that resulted in improvement in process/ practice |
Senior Management |
Annually |
PAN India event |
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Cost Saving Strategy of the year Award
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Cost reduction , Improvement in revenue generation |
PAN India |
To recognize the strategy that resulted in cost reduction |
Senior Management |
Annually |
PAN India Event |
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Most Efficient operations award
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Strategy that resulted in tangible benefits to the company in terms of operational efficiency |
PAN India |
To recognize the strategy that resulted in Operations efficiency |
Senior Management |
Annually |
PAN India Event |
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Employee Engagement practice of the year Award |
Going out of ways to form inclusive work environment |
PAN India |
To recognize practice that has resulted in Improved productivity due to inclusive work environment |
Senior Management |
Annually |
PAN India Event |
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Reporting manager recognize the contribution of the employee |
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Reporting Manager seeks HOD approval on the same |
| Approval Received |
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Award Shared at an event organised at branch level also shared as and when required in case of LinkedIn recommendation |
Process followed for Regional Reward
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Reporting Manager Send Team nomination to HOD, (nomination to be sent in given timeline) |
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HOD Consult with Regional HR committee, Regional committee takes telephonic round of interview, names of shortlisted candidates shared with Corporate HR for approval |
| Nominations sent to Corporate HR for approval if approved |
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Rewarded in regional level event |
