Designing Effective Employee Reward Programs

Designing Effective Employee Reward Programs

0:03

Hi everyone and welcome to today’s webinar, Designing Effective Employee Reward Programs, hosted by HRDQ-U, and presented by Peter Garber.

0:13

My name is Sarah, and I will moderate today’s webinar. The webinar will last around one hour. If you have any questions, please type them into the question area on your GoToWebinar control panel, and we’ll answer as many as we can during today’s session.

0:27

Today’s webinar is sponsored by the HRDQ What’s My Communication Style online assessment and training course.

0:34

Communication skills are critical if your organization is going to perform at its best, particularly during challenging times. Dramatically improve communication skills of your employees through a better understanding of personal style, and the effect on others. What’s My Communication Style assessment is just 20 minutes to an ah ha moment.

0:54

Learners engage in a proven process that identifies their dominant communication style and the communication behaviors that distinguish it, then teaches them how to flex their style with colleagues for optimal communication.

1:06

Learn more at www.hrdqstore.com/wmcs, or you get to take a free test drive of the online assessments.

1:18

Today’s webinar is presented by Peter Garber, here as a retired human resource professional, with over 35 years of experience working for a Fortune 200 corporation.

1:29

During his career, he held a variety of HR roles, including assignments at manufacturing facilities across the country, and later spent 20 years at the company’s corporate headquarters.

1:39

He is the author of over 50 books and learning activities on HR and business-related topics. He has been invited to present seminars and webinars on numerous occasions based on his works and has made presentations at international conferences and colleges.

1:53

Peter was also an adjunct instructor at the University of Pittsburgh Business School. Thank you for joining us today, Peter.

2:02

Thank you.

2:05

Well, thank you, Sarah. Good afternoon, everyone. I’d like to welcome you to today’s webinar entitled: Designing More Effective Employee Reward Programs.

2:18

As Sarah said, I, I have had over 35 years’ experience working in Human Resources, and during that time, I had the opportunity to see many employee reward programs.

2:30

Many of these programs met the objectives of their sponsors, but there are also many others that did not, and, and mostly, when they did not meet those expectations, that was due to their plan design.

2:44

This got me interested in studying reward programs and how to make them more successful.

2:50

What I’m going to present this afternoon is a result of what I’ve learned over the years about designing more effective employee reward programs.

2:59

Let me explain upfront, that generally what I’m referring to are those rewards that are presented to employees, in addition to their compensation and benefit programs. So let’s get started, OK, let’s begin by talking about the value of rewards.

3:14

There is definitely a business case for providing rewards to your employees, it’s good for business.

3:21

Rewarded employees are more likely to be motivated, productive, stay with their employer, and are more engaged in the jobs.

3:31

There’s an old saying, in business, if you want to ensure your customers are treated well, treat your employees well.

3:39

Know, in our personal lives as we purchase goods and services, we’ve all encountered that disgruntled employee who doesn’t appear to be treated well by his or her employer, or at least doesn’t act like that, like they’ve been.

3:54

Whenever I experience, I wonder what rewards these employees receive from their employer, understanding that most service industry queries that we come in contact within our daily lives.

4:06

Their pay may be only minimum wage, and I certainly get them, but interestingly, not all people paid at that level. Preet customers poorly.

4:16

And I often wonder what makes the difference?

4:19

And I think that it’s dependent on the types of rewards and recognition that their employers provide to them.

4:30

When we, when we talk about designing effect of employee reward programs, one size certainly doesn’t fit all.

4:38

Rewards need to be tailored to meet the needs of the recipients.

4:42

And I’m going to be emphasizing that concept, or that point a number of times throughout the presentation this afternoon, but here’s where the challenge begins: The rewards: a reward to one employee may actually be a punishment to another. You might be scratching your head and say, how can a reward be a punishment?

5:04

But let’s look at a list of different things that that might occur in someone’s work-life, and just think about, if that would be a, a reward, or punishment, let’s just go through the list briefly.

5:21

I bought extra work.

5:23

You might think, oh, jeez, I got enough work, I don’t need it anymore, but it might seem like that would be a punishment, but not, necessarily.

5:33

What if the person felt that this extra work could allow them to gain more experience or recognition that could lead them to a better job in the future?

5:42

How about a new assignment?

5:43

That may or may not be something that somebody wants, especially if he or she is perfectly content in their current role, Job transfers might be perceived the same way about public recognition for, for job performance.

5:59

Would that necessarily be a permanent It would necessarily be a positive for everyone.

6:05

We’re gonna hear more about that in a case study that’s going to talk about humans.

6:12

Think about overtime, especially from nonexempt employees who get paid for it.

6:18

Overtimes is interesting to talk about, concerning, if it’s rewarding or not, because over time may be perceived as both a positive and a negative to the same employee, depending on the circumstances.

6:31

For example, what if it’s November early December with the holidays around the corner?

6:36

Would overtime be something desirable or probably would?

6:41

What about during the summer months when employees perceive overtime the same way? When they’d rather be spending their time enjoying the nice weather with their families, you know, perhaps not.

6:51

How about moving to a new office or workstation?

6:54

So I may see this as a positive, while others would rather maintain or remain, where they are comfortable and accustomed to work.

7:02

So, you know, all these things are, really quite personal warmth. Let’s look at this. Let’s talk about this last item on this list. Lunch with the boss. Oh, that’s interesting.

7:15

Do you think how do you think that would be perceived by?

7:18

Most people are men.

7:21

For some, it might be thought of as an opportunity to tell the boss about their accomplishments and their career goals and things like that.

7:28

Others might be scared to death that they might say something wrong that could derail the career fair.

7:34

So the point is, is that rewards are personal, they’re very individualized, they depend on the circumstance and many different backwards.

7:42

But the point is, is that, you know, that as you design, an employee reward programs, consideration, has to be given concerning what participants in the program will perceive as rewards, rather, the things they don’t want. It might even feel there that are more punishing, then rewarding.

7:58

the mistake it’s often made when designing employee reward programs.

8:03

Is it?

8:03

The sponsors and designers of programs tend to think in terms of what they would consider to be rewarding, rather than what recipients of the program’s participants in the programs would find rewarding.

8:18

So, that’s a very important point, and something that needs to be kept in mind.

8:23

There’s many things that can go wrong as you do design and implement your employee reward programs.

8:32

You could be rewarding the right person with the wrong reward or the wrong person with the right reward, or you could reward the right group with the wrong reward.

8:41

You might reward too many or too few, or make the reward too big or too small, based on the accomplishments that you recognition.

8:49

But perhaps, the most serious problem is rewarding. What is at least perceived as being the wrong group, a person being rewarded, and ignoring the right group or person?

9:01

When this happens, your reward program can lose its credibility.

9:07

You can begin to hear things whispered such as favoritism, politically motivated buyers, management, favorite management favorites.

9:17

Management, pets, or whatever?

9:20

You may not be able to totally prevent this because that may happen on some level no matter how diligent you are in your design of your programs.

9:30

But the key is established between clearly defined and communicated criteria for qualifying for the reward upfront, which can help prevent this from occurring. So there isn’t any question that the, that, the, that the group or individual earned the reward based on that pre-established criteria.

9:51

Very important, OK, let’s look at a brief case study.

9:57

And this is about a company called the Henderson Electronics Company. And they decided that they wanted to reward employees, which is good thing, of course, and they established this baldi commitment.

10:13

So, here’s how: Here’s how the reward of the award program was designed.

10:19

There were peers were given the opportunity and the ability to emanate fellow employees.

10:27

It was a form that they filled out, and the forms and the nominations did go to a committee to be reviewed for consistency, and, and to make sure that they were proper nominations. The recipient would receive and ascribe plaque that had their name on it and the name of the award and the date that it was presented. There are given a, the winners were given a reserved parking space in front of the facility with their name nestled on the curb and that would be for maybe a month or something like that, that the, that there at that benefit.

11:06

They got an embroidered Henderson Electronics Quality Commitment Award.

11:11

Sure, it’s kind of a golf shirt type thing with it, embroidered, with the with the award name on it.

11:19

They would have their picture taken professionally and framed; it would be placed on the entranceway of the facility that all employees at the facility used. And they called that the Wall of Fame and everybody that receive this award, their, their frame picture, would be on that wall of fame. There’d be an award ceremony, kind of an impromptu wanted to, early in the day, there’ll be an announcement that there was going to be a quality award presentation. Everybody who would meet in the largest conference room at the facility that the person nominating, the awardee would stand up and explain why.

12:00

The person deserved the award.

12:02

And then the person would get the reward. The awards were the things that I just talked about, and then, finally, there was a personalized letter sent home by the manager.

12:14

Sounds like a great program, right? What could go wrong?

12:17

Well, lots of things.

12:20

After a few months of the program, reward recipients were beginning to refuse this honor.

12:25

They said they didn’t want the plaque that they had enough things from the company. You know, trophies, Boeing trophies, things like that, they didn’t want another one.

12:34

They rode to work in carpool. So the parking space didn’t really have a lot of meaning to them.

12:40

They said they had enough company logo shirts. And I guess that company gave out t-shirts, will do those things like that. They didn’t want to be the focus of the awards ceremony.

12:50

Didn’t like having their picture taken. And they didn’t want to be included on what they began calling the Wall of Shame.

12:58

Instead of the Wall of Fame.

13:00

But they did want the letter from the manager to be sent to their home.

13:03

Isn’t that interesting, that of all the things that were in that program design, this was the one thing that employees wanted, well, let’s look at why this happened.

13:13

Well, one thing there was, there’s peer pressure, you know, as they would get it, get a lot of teasing and things like that.

13:23

There was also some of that, uh, wrong, group, wrong person, right, reward syndrome going on, in some cases that not everybody felt people getting out of this award were worthy of it.

13:37

The pursuit perceived value of some of those rewards, you know, that they, they didn’t see those as valuable as they already had enough of those things. So overall, there was a poor reward design.

13:49

After all, even though it sounded like a great idea to begin with, they didn’t think about, I’ll say the customer, in this case, the customer, in this case, to be the people receiving that award.

14:00

So, there’s a lot of lessons to be learned from that, from that example, I’d like to introduce this model of five levels of reward visibility that you may not think about, you know, in these terms. But let us go through it quickly.

14:16

The first level with the bottom is just an individual visibility is only to the individually dual, getting them the award that might go, something like that person’s boss calls him into his or her office and says, you, you’re receiving this award for you, for your work, so it’s really just the individual presenter. That is, the reward is visible to, the next level, would be the reward. The reward is presented in front of the workgroup. Their immediate workgroups are everybody’s aware of the person who received this honor. The next step would be worth the reward being presented in front of all the co-workers. You know that at the facility or the area that they work in. The next level would be the reward sponsor, and that might be the facility manager.

15:04

It could be even; some environments could be like the vice president of the business or even CEO.

15:11

And then the highest level is, the public is a public visibility and that would be in cases where a company might send information to the local paper about a high-level promotion or hire, something like that, or trade magazine.

15:30

Sometimes you see things that you receive in the mail about.

15:34

Maybe it might be a real estate company that is announcing that a certain individual had reached the million-dollar sales mark, you know, for, for home sales or commercial sales or whatever. So there’s different levels of rewards. visibility. But again, not everybody wants to be at the higher levels of the visibility, as we just saw in the Henderson Electronics example.

15:57

So which levels best? Depends on the nature of the reward, and what is most reinforcing to the people being rewarded again. Point is, so important. Obviously, Henderson Electronics the most appropriate word. Visibility was not understood. They didn’t, they didn’t, they didn’t get it, they didn’t understand.

16:13

And that employees wouldn’t want to be that center of attention during that award Ceremony, not that group of employees that they were focusing on, other employees, other employees may, may want that, but you have to know. You have to know who you’re rewarding.

16:28

A long time ago, when I was in college, I studied a lot of psychology, and one of the things they introduced to me was something called a behavioral model in the behavioral model occurred to me, that the same behavioral model that I’ve learned so many years before really did apply, to reward programs. And let me, let me explain.

16:50

So in this view of the model, we see B, for behavior, C, for consequences. And behaviors, in this case, would be efforts, what’s called work, F efforts, the output that people have during their jobs. And then the consequences would be the results of those behaviors.

17:08

Let’s go a little bit further here.

17:10

Something called, introduce something called Positive Reinforcement, R plus.

17:14

So here, again, we have our behaviors. We have our consequences, and the consequences equal our plot.

17:20

Our applause is reward.

17:22

So efforts are rewarded.

17:24

Efforts are rewarded. And they’re more likely to be repeated if they’re rewarded.

17:29

So that’s kinda what happens in life, right?

17:33

So let’s go on with this model.

17:34

Here’s, here’s something called negative reinforcement, R minus, so in this case, you have your behaviors, you have your consequences.

17:42

The efforts result, and no reward, and if there’s no reward, they’re less likely to be repeated over time.

17:50

Now, the, the key to that statement is, over time, they’re less likely to be read the repeated, but no.

17:59

Having the rewards not be present every time that you do something or do something on your job well, is real life. Every time you do your job well, you’re not going to be handed a bouquet of roses, right?

18:12

So you know those reinforcements that are plus, you know, doesn’t happen every time.

18:18

And we’re going to talk in a few minutes about schedules of reinforcement and influence they have.

18:24

So let’s finish our discussion about this thought, this model, or we’re not gonna finish, but the next step is something called punishment.

18:32

So here we have behaviors, consequences, resulting in punishment.

18:36

So efforts that are punished are perceived to be punishing will not be repeated.

18:43

That’s what the whole purpose of punishment is, to stop behaviors.

18:47

So that’s why it’s so important to make sure that you’re getting your reinforces right, that you’re not inadvertently trying to give something, trying to reward somebody with something that they really don’t want that would actually feel punishing.

19:01

So, continue, continue this discussion, and finished the Model, there’s something called Antecedents, that you can see at the bottom of the slide, you know, Antecedent is A. And you have your Behaviors B and Consequences is C it works out very nicely to be an ABC model. But antecedents come before your behavior.

19:21

And antecedents are important because they prompt behaviors as students are still a function of consequences. And let me move on and I’ll explain that.

19:31

Antecedents are important because they come before behaviors, but you can’t depend on them to do the job of reinforcing behavior because it’s not their function. But they must be connected to consequences if not the antecedent is not effective.

19:44

So, let me, let me clear this up.

19:47

OK, so some examples Science are antecedents to behave in certain way.

19:53

If there are no consequences pluses or negatives, the antecedent will not have any influence.

19:58

Think of science concerning rules that you may see every day that have no influence on people’s behaviors, you may, in your place of work, there may be signs all over the place saying that.

20:08

You have to do something or no entry, or whatever it is, but if, if people aren’t paying attention to those signs, and there’s no consequences plus or minus, then, that sign that antecedent will not be ineffective antecedent reward. Program designs tend to be to poke, focused on program announcements, which are the antecedents and not on implementation, the behaviors, or the results, the consequences. So, announcements are still important.

20:37

They should explain the program how to qualify for the reward, and how will pay out, hopefully, with positive reinforcement.

20:45

But you can’t just make a program announcement and expect the program to proceed without any intervention from them. So, let’s talk about schedules of rewards.

20:58

And we’re gonna bring this back to the workplace, but let’s right now talk about something that people like to do. Many people like to do fishing.

21:07

So, in this case, the antecedent would be remembering how pleasant it is, the fish, the behavior would be casting aligned in the water, and the consequences would be catching a big fish after a reasonable period of time.

21:18

That would be our plus right, but let’s look at what happens when the reward goes away, in this case, reward extinction.

21:26

The antecedent, again, is the same. The behaviors, the same caching aligned, but the consequences are not kept in any fish.

21:33

So how long will this poor guy sit in on that rocket, looks like, sit there.

21:37

If he’s not going to catch any fish, somebody said that South Sider help if he had a fishing line bait and put it in the water, But that’s beside.

21:45

So let’s talk about what happens when, not when you don’t catch a fish, but you catch to make it.

21:51

And that’s called reward situation. And you think about the word saturation when you hear the word situation.

21:57

Again, the antecedents, the same behaviors the same. But the consequences are catching a fish every time, every time we put the wine in, the water, you catch a fish.

22:07

Well, would that be fun? You might be saying, yeah, that’d be great. But after a, while, you know, have your bucket full of fish, and you’d say, really wanting more fish and fish.

22:18

Same thing can happen were the rewards if you were out a reward and you saturate or saturate. Your reward programs with the same with the same old things.

22:31

So schedules of reinforcement too often takes away interest, too infrequently frustrates employees, so it’s important to find the right balance concerning the frequency.

22:41

So which behavioral model has the most thoughts on employee’s behavior?

22:45

Well, you know, it’s highlighted here is obviously positive reinforcement, but that may not be part of the plan design, sometimes reward programs unintentionally result in something other than positive reinforcement been talking about.

23:01

So here’s an example.

23:02

It’s called the, this little case study is called Stock options for everyone.

23:06

At one company, the CEO implemented the program to provide stock options for all levels of employees. For one year. You know, he was very pleased with his executive staff and how motivated and engaged they were in their jobs due to the stock options they receive. So this is good stuff.

23:24

I want everybody in the company to get stock options, so they all behave that way.

23:30

The payout for this reward was set at what was thought of as a realistic future stock price goal of $70 a share.

23:38

Unfortunately, the stock market experience and unexpected downturn in the stock never came close to reaching $70 during this time period.

23:46

Ultimately, employees felt it, you know, lower levels of the Organization, not used to stock options and how they work.

23:54

That ripped off, with many of them believing that the company never really intended to pay out of these options, and they lost trust and management.

24:02

So, again, for program design, is always very important, because you could end up with unintended consequences, things that ultimately happen that can be very different than intended.

24:12

Employees may feel more punished than rewarded as a result, unexpected events are unanticipated changes, cause reward programs to be discreet, decreased, or even the gate.

24:22

You could spend a lot of money only to make employees feel less rewarded or even punished.

24:27

And when that used to happen, and when I was working in as HR professional, I had one boss and said, well, you spent a lot of money on this program, and everybody’s unhappy about it. We don’t have to spend a lot of money to get people upset. We’re pretty good at doing that, you know, for free.

24:40

No kidding, of course.

24:42

But the point was made.

24:44

You can get the opposite result of what you expected, your program to seek to achieve. And, again, program design is the key.

24:53

Another brief case study here on this is called the Operation Managers Challenge.

24:59

An operations manager at a production facility decided that creating a competitive challenge between crews would increase the overall performance of the operate.

25:09

He created a contest to reward the crew with the highest production for the month. He obviously was a big sportsman.

25:17

The results after establishing the contest, the operations manager noticed something very unexpected.

25:24

Production rates decreased and scrap reach increased, especially during shift changes, as each crew took over production from the previous crew.

25:33

Well, what did you think happened?

25:37

Well, each crew took over production from last crew, but would only get credit for the production that began during their own shift as a result of the contest. No one wanted to help the previous crew increased, increase their production numbers. So they scrapped whatever production wasn’t process from the previous shift.

25:54

So consequently, during each shift, scrap rates dramatically increased, resulting in overall lower production for the plant.

26:03

So what are the operations manager? Do we change the rules that contest? I’m not usually an advocate of changing the rules, you know, during a, A program that’s, you know, previous spin outs, but in this case, he didn’t have a choice.

26:18

Now, each crew was motivated to help one another increase production, including during shift changes. The result was increased production levels, lower scrap rates for the entire plant.

26:28

In the objectives of the contest, were finally achieved. So they finally came up with a much better plan design.

26:36

Let’s just look briefly on that, a little model here, a little matrix about competitive, competitive versus collaborative remote rope reward model.

26:45

In here on the top, you can see team goals and the individual, the individual at the bottom, and then competitive versus collaborative. So on the team, competitive environment, groups of employees.

27:01

I will compete against other groups who aren’t rewarded only be one winner individually, but the same thing and police compete against other employees.

27:11

And can only be one where, in a collaborative model, groups are recognized for working effectively together. We hear a lot about teamwork today, and that’s obviously a very desirable goal, and a lot of that may have to do with how you structure your rewards. So there’s no limit on the number of groups who can be rewarded. And, you know, limited on the number of groups they can excel.

27:33

And the same thing with the individual collaborative no limit on the number of people that can receive, and they can receive the award based on their performance.

27:43

So, which type of reward competitive version collaborative is best?

27:47

Well, it depends on the types of jobs, the nature of the work, or the work environment, the goals expected, and perhaps also the organizational culture, as well as their organizational culture that will truly support and a collaborative design, OK, creating reward opportunities. The age-old problem of efforts were versus results, in, which do you reinforce coming close to goals? Reaching goals.

28:14

Moving away from goals.

28:16

Well, you may just think, well, we’re just going to reinforce goals, But maybe achievement of goals. But maybe take a look at coming close to goals, one to reinforce when it’s when the goals long term are difficult to reach and how to reinforce recognized steps towards the goals. Now, reaching the goals is clear, when it goes to accomplish and provide, the appropriate form of recognition for, the fishermen, now, about moving away from goals. You know, maybe something changed that make gold achievement more difficult or completely out of the employees control? And in those cases, recognizing efforts that employees made, trying to achieve the goal would be a very good idea, and be very much appreciated.

29:02

So, what to reward a reward.

29:04

Now, these are just a few things there in the ah suitable list of things that would be appropriate to reward success. Exceptional efforts, significant accomplishment, great results record, performance overcoming adversity, completion of a major project, major milestones. There’s many, many opportunities and that may be very specific to your environment.

29:29

You have to be careful with rewards because you get what you wore. You know, the positive reinforcement is a very strong motivator to have you.

29:39

That’s just the way, the way that, the way it works.

29:42

Oh, cool with people.

29:44

So you need to be careful with rewards. You might be rewarding behaviors that you don’t really want.

29:49

And here’s an example, know, many organizations have perfect attendance words, and they give out some, you know, some kind of reward at the end of the year. For people that have perfect attendance, did you really want to do that during a pandemic.

30:02

So, you know, you have to really kind of think through, you know, what could be the possible consequences of what you’re rewarded or the unintended consequences of what you’re rewarding.

30:12

So, reward factors. Rewards can be formal, that can be informal, that can be individually. They can be grouped. They can be easy to achieve, hard to achieve, personal, or generic.

30:24

And here’s a matrix that gives you some examples of each. Let’s look at the top on the easily obtained goals, things like leisure, formal on the form of coal, company milestone, memento companies, celebrating 100 years in business, and everybody has some kind of a moment to moment to recognize that company, logo, gifts, or office workers on. The more formal, on, the challenging to reach of the formal. Promotions raises, bones, corner, offices, informal, easy, to obtain free Coffee Office, closed, early on a holiday, or closed on a holiday newsletter.

31:02

Message of appreciation to all employees, to the Christmas message from the top official in the organization, and individual could be recognition from the boss letter, from the top official. Remember, the example that we gave the Henderson about, how Henderson electronics how important and how, what, what a reinforcer that was, two people to get that letter personalized letter to their homes.

31:30

Peer acknowledgement, special privileges.

31:34

So finding the right measures, though, is important.

31:37

And you don’t want to reward or punish process variation.

31:42

What do I mean by process variation? Was easiest to talk about that, you know. Again, and maybe a manufacturing setting, and where you really kind of quality control. We have upper control limit, lower control limits. And you expect the process to vary within those in those, in those limitations in this consider to be normal. Or OK, well, I had an experience when I was working at the manufacturing facilities with our company early on where I remember we’re recognizing some kind of a production accomplishment that happen, and we’re rewarded everybody somehow. I forget exactly what it was.

32:23

But I remember going and talking to one of our employees and saying hey, yeah, well that’s great that you know that you helped contribute to achieving this milestone and your contributions. And thank you very much.

32:36

And he said to me, he said, you know what, I get confused since you know, I’ve been working here a long time.

32:43

I come and I really do the same thing every day, and, you know, some days, you know, the boss comes around and tells, tells me, here. tells my, my, my or crew: You want to agree job you’re doing, and you just did this. And then other times, he comes and tells us what a bad job we’re doing. He says, I don’t get it, I just do the same thing and I got to thinking about that.

33:05

What we’re really recognizing, maybe he was just these process variations and not know what people with individuals had to do to accomplish that.

33:14

And the same kind of process variation could be derived in terms of economy, inflation, competitors, the existence, or the lack of the existence of competitors on technical breakthroughs.

33:28

There can be lots of process variations that we might be rewarding people for, that they really don’t feel like they really had an impact.

33:38

So managing reward programs, it’s important, important to keep your programs updated just, sometimes, you know, these programs can be established for a long period of time, and, you know, there isn’t much attention paid to them, and then you really do need to be updated. You have to exercise rules, discipline, that can be tough.

33:54

Because, you know, when people are upset about not receive an award, or it’s a closed color, or something like that, and everybody’s got their own, you, know, different vision and version of, you know, should they have gotten the reward or not? You know, you might be tempted to say: Well, we’ll make an exception to this cation, or this other group, that really should be avoided. Not that, you can’t change your programs.

34:16

But it’s best to do that after the program period, after it’s over and then, you know, re-invent the redesign, the program, and issue it again.

34:28

And again, and trying to anticipate those unexpected consequences.

34:33

So, reward design factors, you can have organizational wide ward goals and a lot of times in a large company like I work for weird here.

34:43

Reward programs tied to things like ROE, return on equity, or ROI, return on investment, those kinds of terms. And so everybody in the, in the whole organization is big organization, would be participating in these. We weren’t, in this reward program tied to those indexes that, that lot of people might not have felt very close to. So to address that, are such our line of Sight Rewards.

35:14

Which, as the name implies, these are things that are in their site, and things that they can directly control in their own work environment. So decisions have to be made in and designing reward programs.

35:27

You know, is it going to be organizational wide, or is it going to be more specific to where somebody works. Program life cycles. I really think reward programs need to have a life cycle, they need to have a beginning, and an end date.

35:41

And no matter how well they work, it’s probably a good idea to have it get out of it. Put it away for a while. And it feels really good re-introduced it, you know, new and improved.

35:52

negating factors. Now, a lot of reward programs have something that cancels out the award. It might be going back to the organizational wide reward goals in that program. It may say if we don’t reach this level of ROI ROE, nobody’s gonna get a payout, and that’s really fair when you think about it. From the sponsors perspective. You know, a chief executive of an organization might say, I’m not going to pay everybody by performance award. If we don’t, if we, as an organization don’t reach your financial goals, just not going to do it. And that’s fair. But these things kind of things need to be explained.

36:33

And everybody needs to understand that upfront.

36:36

They are free concerts, They, if you have something that page, you know, at the end of the year, a lot of times, they get all of the payout. in one lump sum. That may be in addition to two there.

36:50

Hey, hey, but there’s other ways to do this and other companies have done this for you. So it’s not so the reward isn’t so distant.

36:59

And so that they may pay out monthly or quarterly or something like that, so that employees or get that R plus more. Often, they get that kind of sharp shot of R plus more frequently. The one loan caution in there is that sometimes that can dilute the, the award because it seems like it’s paying out less, you know, and it’s paid out in payments rather than the payment method. is interesting. You know, again, I mentioned earlier, it could just appear on your paycheck as an addition to your pay.

37:34

They couldn’t be a separate check. May even be paid in some other form. A company saw cash, or something on something else just to make it stand out.

37:45

Reward program. Integrity is important to mention that earlier. About, you know, a thing, the rules of the program, and not, you know, avoid making exceptions. And then finally, entitlement, expectations, and what comes to mind here is, a lot of companies that, I know.

38:02

have an employee recognition type program, in which they give a Thanksgiving turkey and that’s wonderful. Everyone appreciates help during the holidays with something like that.

38:14

But what would happen if one year the boss said, or the head of the company said, you know, we’ve had a terrible year. We’ve got to cut costs. We’re not gonna give away those Turkish this year. I didn’t think employers are going to react. They’re not going to react as if, OK, I’m probably not going to always react. Oh, I can understand. We are having a tough year. They’re going to feel like they lost something, something that they were entitled to, and they expected. So sometimes, if you institutionalize a reward, that becomes an expectation.

38:47

OK, is your reward program working?

38:50

The answer may be found in the current interest level of employees, in your reward programs, if people are talking about it, if they’re asking you about it. If they’re following the, the, the measures that you should be publicizing about how you’re doing towards reaching whatever the ultimate goal is, if it’s that type of program, then you’ve got a good then I believe you have a good program.

39:15

If people are interested in it and excited about it, if you ask employees, hey, what do you think about? The, how’s it going on, this reward program? That we announced the beginning of the year. And the kind of scratch our heads and says, oh, yeah, I kind of forgot about that.

39:30

Then you probably aren’t having a very successful program. So, you know, I think the real measure here is how much interest and excitement people may have, you know, about, about the reward that you administer.

39:46

So the value of your reward program, is itself funding is paying for it, so are people motivate as the reward?

39:54

Motivating people to work.

39:56

Better, harder, smarter, or whatever. To be more successful and to help the company be more successful if they’re doing that. It’s a good deal for everybody. So good deal for the company.

40:05

So good deal for that.

40:06

People receive doesn’t add value to the organization either financially or by improved employee job satisfaction and that can turn into positives. On the bottom-line devalued rewards goes perceived impossible to reach. If you put that an impossible goal out there, and everybody feels like, it’s impossible.

40:28

It’s not that programs are not going to work.

40:31

Award program fatigue, know, if you have too many programs going on. You say, this is good stuff. Let’s, let’s have a whole bunch of employee reward programs going on. That’s going to, it’s going to where it’s gonna wear out that rate though. That reinforcer, you end up with the award program fatigue.

40:51

And then reward inflation.

40:54

Everyone gets a trophy center. I think you probably all understand what I mean by that. We hear a lot about that, and, you know, Are there with our, with our kids anymore? You get these trophies for participation and how much meaning did they have. You may have meaning, but in the environment, we’re talking about, you’re going to devalue the rewards by doing this, so you don’t want to inflate it to the point that you’re experiencing that that particular person.

41:27

The reward not given, it’s very important to think about this because for every individual or group awarded, there are those who didn’t receive them.

41:35

It’s important to pay attention to those people as well, especially if they had expectations of being rewarded.

41:42

And so, you know, they’re not gonna get to get the reward, but it doesn’t mean that you can’t talk to them and listen to them.

41:48

You know, trying to encourage them to, you know, to try to achieve the goal, next time they have an opportunity community. You don’t want them to quit emotionally but remain on the job. And we probably have all experienced employees in our work lives when, when that’s happening, you know, it’s obviously not something you want your reward programs to, to create.

42:13

OK, I’d like to talk about What identified is nine types of words, And I really thought a lot about this, during my career, that really different types of reports that are out there, and they each have a different role, and they each serve a different purpose.

42:32

So, you know, just the, you can see them listed here, Recognition, reinforcement, maintenance, appreciation, inclusion, milestone, gratitude, entitlement, motivation. And you’re probably thinking she’s kinda like differences without distinctions. And, you know, that, there may be some truth to that, But I do think that the, that there are distinctions between these and that you need to appreciate those differences. So these next three slides are a real busy slide, so I don’t want to cover everything that’s on those, and I have a kind of summary slide of this, and I’m going to show you that will be easier to, to explain what they are, but let’s just look at it a little bit of this on the slide.

43:16

You know, for example, recognition, the objective is to let employees know that their efforts are, recognize application should explain why recognition is deserved and the results achieved example, those could be public recognition, earlier, personal place. Reinforcement, puzzle, reward, work, and accomplishments, ensuring that there are positive consequences in the workplace, positive feedback, examples, positive feedback from supervisors, and or peers. Number three, maintenance is an interesting one.

43:47

And maintenance rewards, at best, only maintain current levels of performance.

43:51

And they might not even do that, and they’re not intended to motivate, but support current performance or just kind of appreciation. Overall, examples of this might be costs of living rate, which nobody really earn those. They just get, those are holiday parties, you know, a Christmas party.

44:13

There’s probably no one that’s going to say, I’m not going to leave my employer because they give, because they give the best Christmas parties. But take those parties away. I’m not saying they’re not important, but you take those parties away, and employees will feel lost as a result.

44:28

So, they are important, but you have to understand what the, what the, with their application isn’t and what they do. You know, appreciation, inclusion, milestone, milestone for examples, anniversary, celebration, customer company service awards.

44:47

Gratitude, expressing gratitude for employees, for their service, that might be more in a retiree, situation, and presenting them with some kind of gift, as they retire entitlement.

45:01

That is providing privileges to a certain few, that.

45:05

and this entitlement is earned. things like corner offices, travel, privileges, authority, and then motivation. I was trying to explain this to somebody one time. They said, well, aren’t these all, aren’t all types of rewards, motivation? And I would submit that they’re not, and motivation, in this case, are shorter term, and nicer is usually a financial value. Make contingent on reaching the goal, and they usually introduce a steady with that goal is, and these could be cash bonuses commissions, which kinda gets into the compensation area.

45:37

But it could be valuable prizes, or vacations, or even performance award, which is what we’re really talking about here.

45:44

So, which reward is most important? They’re all important, depending on the situation, it’s important to utilize all these reward strategies at the right time and circumstance. And employees need each of these rewards to feel acknowledged in a variety of ways. So, here’s what I call the reward scorecard.

46:02

And you can see here, you know, in this case, this organization, if this was a real one, would be doing pretty good because, yeah, there have maintenance towards in the form of Christmas party, appreciation in the former staff appreciation, luncheons, gratitude, a gold watch, or some other appropriate retirement gift presented to launch service retirees. Entitlement might be additional vacation time for working extra hours. Reinforcement could be a gift presented, Teach employees for excellent performance. Company Service awards are those milestones. Employee of the Month Award would be recognition, million-dollar sales club, inclusion. And performance work programs, again, as I mentioned, could be, and hopefully are, or motivational, to work harder, or work better, smarter to achieve greater results. So I would ask you and challenge you, how balanced are your reward program?

46:57

And asked me to take a look at the kinds of programs you have now and, and how many of these boxes do you hit and how could, if you’re not, then, what things could you do to get a more balanced employee reward program?

47:14

In your organization?

47:16

And I think, if you did that, I think you’d find that, that, that, that pays dividends to do.

47:24

OK, and then finally, I’d like to talk about unconventional ways to reward employees. Know, sometimes, you know, again, you were out reinforcer, you do the same old thing. What if you did something that was really, you know, unconventional, unexpected?

47:43

Sometimes the expected is the is the best, or no reward that you can get, and let me just point won’t pulling out. I’ll read all 47 of those but let me just point out some look at number five. Get out of department meeting paths. would that be within your organization would have been in mine, Dip Stock, and another company of employee’s choice.

48:05

That might be a hard sell it to the sponsors of your program, but that they need, if you look at that picture, that chair there, so for a comfortable chair employee’s office. Every time I look at that picture, I say, boy, if I had one of those in my office, if you came in to see me after lunch, I’d probably be taken.

48:26

Better Stillman vehicle, give a shirt a logo without a company or shirt or jacket without a company logo.

48:32

Let employees skip a monthly report from time to time, offer free Netflix, or other streaming movie services are, obviously, so important today and people.

48:46

How about the number 19 offer professional family portrait picture for employee’s office or home or anywhere?

48:58

Number 25, name a company initiative after employee, you know, the John Smith cost reduction program or project, or something of that nature to memorialize somebody’s contribution that might be pretty neat.

49:18

Number 31, give choice of the next project or assignment.

49:22

How about number 33, No birthday recognition for milestone ages?

49:26

None of the lordy, lordy, guess who’s forty or a nifty nifty look who’s turning 50.

49:32

So you know, there could be an award if I reward or some kind of pain, medical co-payments, for a year, providing bottled water, sponsoring a family recognition to just give that as an award to pay for a dinner for the employee to take his or her family out as recognition for something that they accomplished that work.

49:56

The big impact.

49:58

And then just finishing our discussion here, provide customer business cards, have gourmet coffee, delivered to the employee’s office, offer personalized investment counseling, Provide a job coach.

50:12

Allow no contact times and a lot of jobs. People feel like, Geez, I’m never off the clock here. I’m always getting calls at home or that in and offer no contact times.

50:22

And finally, give employees a choice of personal development activities. So those are just some ideas. kind of out of the box, maybe a lot of these.

50:33

But, you know, again, sometimes the, the uncommon is best and can be the biggest, get the biggest bang for your buck, for your career, reinforcement, efforts, and your reward programs.

50:49

So the reward, this is my final slide, the Rewards bottom line, is that designing more effective employee reward programs doesn’t have to cost a fortune, but it can pay big dividends. Read them or again, the Henderson Electronics Company.

51:07

The one reward on that list of all the things that they provided was probably the least expensive and probably the easiest to accomplish, but really paid the biggest difference.

51:23

OK, so, Sarah, that concludes this presentation.

51:27

We’ll turn it over to you for questions.

51:33

Thanks, Peter, great, Great session today. If you do have any questions, we have about 10 minutes here to answer those for you.

51:41

So, if you just want to type those into the question area on your control panel, and, we’ll begin answering some of those, and we did have a question, kind of threw a little bit earlier, from an economy, would like to know, how about reward design factors for volunteers? Who have been with us for years? Is this the same with regular employees?

52:04

Hmm, hmm, that’s a very interesting question.

52:06

Very good question.

52:08

Yeah, I think most of the, I think all of the principles that we talked about are important. I don’t know about some of the financial aspects, you know in a volunteer setting like that, but that doesn’t mean that there couldn’t be some kind of a reward, even, if it costs some money to to be given to them. And probably very important. I think, you know, again, expressing gratitude and thanks, and recognition Volunteer of the year, or volunteer, or the month, or something. Like, that would be extremely important. Because they have really less reinforced in their, in their life and then we have no excuse that then we have as we work.

52:50

Sorry, sir.

52:51

Great. And then we have another question here from Mark and Mark says, when you talk about employee rewards, does this include bonus programs that some employees receive as part of their, their overall compensation package?

53:09

Yeah.

53:09

I mentioned that, um, that, uh, that was talking about really wasn’t about benefits and compensation, but you know, there is some spillover to that. So it’s a little bit hard to avoid that. I think, you know, many of the same principles that we just talked about, you know, are important. You know, even, you know, even in the winter, it’s part of the compensation.

53:34

And probably even more important, that the measures for compensation and compensation design shouldn’t be things that, um, the employees, you know, feel like they have control over, that feel that are reinforcing and things like that. So, yes, I think that just about everything that we’ve talked about here, you know, also does apply to that as well.

53:57

Great. And then Jane would like to know: How would you know that a reward might be punishing to an employer before you present the reward?

54:05

It’s a good question. And sometimes you don’t sometimes experiences, it is the best is the best teacher, you know. It would be nothing wrong with sending, sending out a opinion survey.

54:20

You know, about asking employees, you know, what, what they would find a reinforcing, what kind of rewards they would like to, to see.

54:29

You could even have a list of things that say, you know, would you like to be recognized publicly or in front of your co-workers, in which you know, things like that and you can get feedback from them that way, and you could also just talk to them, you know, and just ask them, know, hey, we’re thinking about doing this, just like I say, Henderson Electronics Company had done that once. They’ve gone out and they had asked employees, hey, we’re thinking about doing these things. What do you think?

54:56

They probably would’ve gotten the feedback from employees that, you know, I listed as, in what’s, what went wrong here so that people should have a better understanding what they should include in there in the program.

55:12

Then Alex would like to know, what can you say to those employees who didn’t qualify for a competitive reward that would make them feel better, then better luck next time?

55:21

Yeah. That’s probably the worst thing to say. It would be better luck next time. That’s for sure. I think, you know, really talk about what? Do you think, you know? What do you think happened? You know, why do you think that you weren’t able to achieve that? You, know, what? What can, you know, is it maybe, as a supervisor? What can I help you with?

55:38

What, what kinds of, you know, maybe training or resources?

55:42

Do? you think that you would need, you know, how can I help you support? How can I help support you in the future to, you know, make you know, at least more competitive or be able to reach these rewards?

55:56

That you’d like to receive.

55:58

But don’t say better.

56:03

Then we have another question here. You talked about process variation and provided an example of employees working in a production environment. Does this concept apply in any other situations?

56:14

Yeah, I tried to address that, and also after, I say it like that, it’s a little bit hard to envision.

56:18

You know, But, again, it may be, know, for example, might be in real estate when the real estate market, so hot as it is right now. You know, employees are going to be receiving awards, you know, in a way that’s a process. Variation.

56:35

Isn’t a really hot market or economy, you know, really booming and everybody buying things are changing changes caused by even a pandemic may make certain industries, you know, more successful than others. And it’s really, what I’m really talking about, process variation of the things that are not in the employee’s control, things that are controlling the outcome, that, you know, that they have no control over.

57:04

So, I think, if you think about it, there’s lots of process variations, maybe stated a different way than that, that come into play, but should be understood, if you’re going to design an employee reward program for people in those types of industries, needs to be understood.

57:21

Then, we had a comment come through from Doctor Madden regarding the question. Where we were talking about employees who didn’t qualify for a competitor for award, and their suggestion was, we can send them a card thanking them for their effort and wish them success in the future.

57:37

Have been an excellent, I do have the Thank you. Thank you. for that suggestion. That would be an excellent idea.

57:44

Absolutely.

57:45

And I think it would mean a lot.

57:46

I think that somebody would appreciate that when they know that somebody recognized that they worked hard to try to achieve that objective and they, for whatever reason, fell short, that somebody recognized them for, for, for trying good stuff.

58:04

Then the final question, and that will answer for today, is from Kate. And Kate says, when you were discussing the nine types of rewards, it seemed like you weren’t really in favor of holiday parties as an effective type of reward already, really against holiday parties.

58:21

Know, every time I’ve done this presentation, I’ve been asked that same question. No, I like holiday parties. So I think it’s a great, I think that you just have to be realistic about them. They’re not gonna motivate people to work harder. Or to stay with the company.

58:35

But they are enjoyed, and they’re important for lots of other reasons, you know, for people, getting a chance to, you know, to interact and socialize with each other and see people in an environment other than the workplace, and, and those, those are good things.

58:52

So, I’m certainly not against those, but you just have to understand them, and appreciate them for what they are, and the value of that.

59:01

Great, thank you, and what that does bring us up here to the top of the hour. A quick comment here about HRDQ-U memberships. HRDQ-U memberships offers over 200 of Human Resource Webinars like this session from today, to trainers, consultants, and coaches, keeping you in the know with industry trends, as well as Workforce Virtual Seminars for classes on key training topics for your employees. So, whether you’re a professional learner or learning professional, we have your training needs covers covered. If you would like to review today’s recording, you can access that under the Human Resource Webinars memberships. You can learn more at www.hrdqu.com/memberships. And that does bring us to the end of today’s session. Thank you very much for your time today, Peter.

59:48

Thank you very much for sponsoring this, so I enjoyed it, and I hope that everyone did as well. Thank you.

59:56

Yes, thank you all for participating in today’s webinar, happy training.

© 2022 HRDQ-U. All rights reserved.