Are You Happy with Your Employee Reward Programs?

Are You Happy with Your Employee Reward Programs? | HRDQ-U Blog
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Written by: Peter R. Garber

Employee Reward programs often fail to meet the goals and objectives of their sponsors.  This happens for many reasons but mostly because of poor reward program design and implementation. However, recognizing these problems isn’t always easy.  There is the belief in many organizations that any effort to recognize and reward their employees will be appreciated and successful. Unfortunately, this is not necessarily true.  You need to be able to recognize when your reward programs are not working or no longer working even if they once were effective. The following brief questionnaire can help you better understand the effectiveness of your current employee reward programs:

  • Are you satisfied with the results of your current employee reward programs? Why or why not?
  • Are your employee reward programs meeting the goals and objectives of the sponsors of these programs? Why or why not?
  • Do you believe that the employees eligible for these programs feel that these programs are fair and equitable for all participants? Why or why not?
  • Are your employees losing interest in your current reward programs? If so, why do you feel this is happening?
  • Have some of your employee reward programs run their course and need to be retired? Yes or no.


>>Learn more at the webinar: Designing Effective Employee Reward Programs


If your answers to any or all these questions indicate a problem, you may have some work to do to turn around this situation.  If it’s any consolation you’re in good company. Rewarding employees is difficult to get right.  The following will help you better understand how to get your reward programs back on track:

First it is important to understand that employee reward programs must be specifically designed for the targeted group you wish to reward.  Not everyone feels the same way about any specific reward.  A reward to one person could feel like a punishment to another.

It is important to think through the possible unintended consequences of your proposed reward programs.  Sometimes you can end up with the opposite of what you hoped to accomplish by your reward programs.  One reason that this can happen is because employees who don’t feel they have a chance of qualifying become frustrated and stop trying to reach the goals of the reward.  This can become counterproductive to your overall reward goals. This situation can be avoided if you establish collaborative instead of competitive reward goals in which all the employees are encouraged and motivated to work together to receive the reward. This isn’t to say that all competitive awards are wrong, but consideration should be given to any unexpected results which could occur.

You need to determine if the goals of your reward programs are directly in the control of those you are trying to reward called line-of-site rewards or based on organizational wide metrics these employees may only indirectly influence, if at all.  Both can be legitimate reward program designs depending on the circumstances but need to be thought through before establishing these types of goals.

Reward programs should have a predetermined life span.  Employees may eventually lose interest in even the best designed reward programs.

Keep employee reward programs simple to understand without complicated rules which can be misunderstood and even become controversial due to different interpretation of these rules.  The more straightforward the program’s design-the better.

Some reward programs designs allow unexpected events or unanticipated changes to modify reward program payouts which can be decreased or even negated. Even though they may have been informed of these possibilities when the program was announced, employees may still feel ripped off if they collectively worked hard over the reward program period only to have these events or circumstances to cancel or significantly reduce the payout of the reward.  If possible, these types of mitigating factors should be avoided in your reward program designs.

Think about if you are rewarding the right things in your organization such as exceptional efforts, significant accomplishments, great results, record performance, overcoming adversity, completion of a major project or major milestones. Remember, you will likely get what you reward so make sure it is the right thing and something you really want to achieve. For example, many organizations have perfect attendance awards to recognize those who haven’t missed any work or very little time during the preceding year. However, do you really want to incentivize employees to come to work even if they are not feeling well during a pandemic?

It is also important to understand the needs of those who don’t receive the reward as it is for those who do qualify. You don’t want them to emotionally quit but stay on the job.

You should keep your reward programs updated and relevant. Make sure that you are still rewarding that which is currently most important to the organization.  Listen to your employees’ concerns about your reward programs current designs and adjust as appropriate and necessary.  Exercise rules discipline even if unpopular at times to ensure the integrity of your reward programs.  Don’t allow reward inflation to creep into your programs and create an everyone gets a trophy scenario to exist.

You need to regularly review the value of your employee reward programs to your organization both financially and in terms of employee relations and determine if they are continuing to meet these objectives.

Finally, the answer to if your reward programs are working effectively may best be found by the current interest level of employees in your reward programs.

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