A leader’s most important responsibility is to motivate and inspire others in the pursuit of organizational goals.
Of course, making important business decisions that set the organization up for success and growth is up there too. But when it comes to managing people, knowing how to reward employees for a job well done is a critical, yet often overlooked, aspect of leadership.
Compensation is both a philosophy and a lever. Most leaders look at the market when determining the kind of compensation model they want to apply at their organizations. They make a decision to pay at market, above market or below market. Depending on the nature of your business, any one of those three approaches will work. Retailers may be fine paying below market during the holiday season, because they don’t expect seasonal workers to stay on after the new year.
If you underpay your management staff, you won’t get the talent you need to grow your organization and operate it at a high level; but if you overpay mediocre talent, they’ll never leave and you’ll have a problem on your hands that’s just as costly as having a high turnover rate.
So how do you reward your employees in a way that compensates them fairly and encourages the behavior and skills you need to grow your business and achieve organizational goals?
Many leaders think the stick is the best way to motivate employees to achieve objectives — like cutting expenses, for example. However, a pat on the back goes much further. Recognition is the best way to motivate employees to achieve goals and drive the performance you seek.
Rewards and recognition are like religion. If you practice your beliefs once or twice a year, it doesn’t impact your behavior. It’s the same with reward systems for employees. If the only raise your employees receive is tied to company performance metrics that are reported on once a year, you’ve done nothing but mask a cost-of-living adjustment in merit-based pay.
If employees don’t know how their performance contributed to their company’s performance, they don’t know how to align their behavior with operational goals. A more effective approach for leaders is to take a portion of the money set aside for employee compensation and give it out during the year on a consistent basis.
An employee rewards system should be formal, well communicated and consistently reinforced. The best part about this is that rewards don’t have to cost money to be effective.
At Brokers International, we give many things away as rewards that aren’t monetary. Examples of tactics we’ve tried, which have worked well, include:
We’ve even given a five pound bag of gummy bears to an employee for a job well done. The exact item given isn’t what makes the difference. It’s the fact that we recognize individuals with personal rewards. Because each individual is motivated differently, the rewards we use to recognize them vary from one person to the next.
We involve our entire organization in recognizing and rewarding the behavior we want to see — actions and attitudes that align with our corporate values and objectives. We’ve learned that if you want behavior to change, you have to address it as it happens.
Focus on being consistent and personal in how you reward employees for a job well done. It requires coordination and involvement from managers, but it reaps fantastic rewards in the long run.Back to Blog