Re-thinking employee incentives and rewardsadmin
Incentives and rewards have long been used by various organisations as a way to attract and retain talent. The Silicon Valley – home of many tech giants has been in the forefront in coming up with new and unique ways to incentivise and reward talent. Even though large bonuses, share options and big commissions are still big and widespread other forms of incentives and rewards have been introduced to keep up with fast paced changing world. In this post I am going to introduce a few ideas on how you can re-think and introduce new incentives and rewards.
Let us start with the basics.
An incentive is anything that can be given to an individual or group of people to motivate them to perform a certain action for a specific desired outcome. Negative incentives are known as disincentives which discourage certain actions. A reward on the other hand is something given in recognition of the individual or group’s achievement. Incentives and rewards are important ways used by organisations to attract and retain talent. They form part of the Employee Value Proposition that organisations use to lure and keep key talent. Without incentives and rewards it is difficult to keep employees happy especially Knowledge workers.
So how should we structure incentives and rewards?
- The first thing is to understand what exactly you want to incentivise and reward employees for. The very basic is to divide incentives and rewards into 2 categories;
- incentives and rewards for the current job role and description
- incentives and rewards for items outside of your current job role and description e.g. innovation, participation in projects, creating self-organised teams
- Once you have created/defined your categories you then need to define upfront what you want to achieve through the different categories.
- g. what do you want to achieve through a specific job role and descriptions (this needs to be supporting your overall strategy).
- What do you want achieve through innovation, participation in projects, creating self-organised teams?
- The 3rd thing is to divide the incentives and rewards into periodic and ongoing/continuous
- Periodic incentives and rewards should focus more on the job role and description, so these will be your traditional incentives like bonuses, commissions and share options
- Continuous incentives and rewards should focus on items out of your current job role and description e.g. innovation, creating self-organising teams.
- The final thing is to investigate from employees what would constitute good continuous incentives below are some ideas that we have come across from organisations that are leading in talent attraction and retention
- Duvet Day – a day given to an employee to just stay at home and not recorded as an official leave day
- Vouchers – these could be spa, dinner, travel, sports games vouchers etc.
- Exclusive gym membership
- Ticket to enter race competitions for fit fanatics
- A trip overseas
- CEO parking – exclusive parking in the CEO’s bay for a month
In conclusion it is critical for organisations to start thinking of new innovative ways to incentivise and reward employees. The traditional ways simply don’t cut it anymore as a way to attract and retain talent.