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Both systems have an investment cost and normally separate from basic compensation. A reward program should be tied to clear performance objectives and provide business benefits. In addition, it would help to separate financial reward systems from the usual salary and merit pay systems. The reward program should be designed to promote excellent performance the drives outstanding business results vs. demonstrating expected basic competency.
Designing a reward program?
Recommended items to including in your reward program are:
- Identification and alignment of company goals to group and individual goals.
- Identification of desired employee performance or behaviors that will reinforce the company’s goals.
- Determination of practical measurements of the desired performance or behaviors.
- Determination of the rewards and how much is given and when.
- Periodic communication of the program to employees.
According to www.inc.com, Patricia Odell reported that “Cash is no longer the ultimate motivator”. Odell cited data from the Forum for People Performance Management and Measurement at Northwester University—which had discovered that non-cash awards tend to be more effective; the exception was rewarding increasing sales.
"The study found," Odell wrote, "that non-cash awards programs would work better than cash in such cases as reinforcing organizational values and cultures, improving teamwork, increasing customer satisfaction and motivating specific behaviors among other programs."
Once you have identified the key areas of your rewards program, you may also need to consider how you can achieve long-term business benefits in funding and sustaining an effective employee rewards program. One of the most difficult aspects of the rewards program is determining what non-cash reward every employee will want.
As mentioned above from research data, cash is not as effective as people may think. It will be more effective to consider programs or platforms that handle the rewards (and the cumbersome logistics and delivery). Try an effective employee reward platform to learn more.
Allowing the employee to see and choose the rewards they want will go along way in sustaining your rewards program and increasing employee engagement and motivation.