An employee reward system should motivate employees to perform at their highest level. Job security and opportunities for advancement encourage employees to take pride in their work. As you devise an employee reward system for your business, keep in mind there is no right or wrong system. Ask for input from your staff and let them help you create a system that works for you.
Compensation
Salary and wages are rewards that satisfy an employee’s basic needs. Part of your employee reward system should take into account the salary structure you use. Establish a set of measureable objectives for each employee to meet. Periodically evaluate employees to see how well they are meeting the objectives. Workers who meet the objectives for their job should receive the reward of a pay raise.
Benefits
Another type of extrinsic reward is the benefits package you offer each employee. While salary, overtime, commissions, merit pay, profit-sharing and bonuses all fall under the category of compensation, benefits are often less direct. They include such items as health insurance, retirement plans, use of a company car, company mobile phone, expense accounts for meals and travel and an entertainment allowance. Benefits might also include subsidized housing, moving expenses and flexible working schedules. An attractive benefits package may help to motivate employees to perform well and to encourage them to stay in your employ.
Recognition
Recognition serves as a psychological, or intrinsic, reward by acknowledging the accomplishments of an employee in front of his peers. This type of reward can be as simple as maintaining a “Wall of Fame” for employees who meet and exceed established goals. “Employee of the Month” is another type of recognition that you can create. The goals you establish for recognition can be short- or long-term, or a combination of both. The reward can be physical, such as a gift certificate to a restaurant, or it can be something intangible, such as a day of paid leave. Any type of recognition is good as long as it is consistent and fair to all employees.
Appreciation
Appreciation is another intrinsic reward that you can show your employees. It’s best to show appreciation personally, such as with a handwritten thank-you note. Another way to show appreciation is to stop by the employee’s desk and say thanks for a job well done. Showing that you appreciate the work the employee is performing for the company is a prime motivator for them to continue doing so.
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