Why is staff reward and recognition important?
For most businesses, staff wages and associated expenses are by far the biggest cost to the business. So it makes sense that any business should be getting the best return on its biggest cost: hence why productivity is so crucial to success.
Yet many business leaders overlook this point, and risk doing so to their own detriment.
Employees want to feel appreciated for their efforts, and valued in what they are doing. A lack of recognition can lead to resentment, distrust, absenteeism and is likely to eventually result in higher staff turnover.
A large part of this reward relates to work/life balance. Employees are increasingly looking to balance their work with other aspects of their life. And while it is something many business owners lack or struggle with themselves, denying such opportunities to workers could be a recipe for disaster.
A 2018 survey of 1,000 office workers nationally by recruitment firm Robert Half found that four in five workers (84 per cent) would accept a lower salary in return for better work/life balance conditions. Such staggering figures would be hard for any employer to ignore.
More concerning is the findings from the Black Dog Institute that suggest up to 14 per cent of new cases of depression and anxiety are due to job strain.
How can employers recognise and reward staff achievements?
Mention “staff rewards” and the obvious response is to think about money. But increasing salaries is no easy feat for cash-strapped SMEs, and also not the be-all and end-all for employees, as previously outlined.
There are, however, a diverse range of options employers can use to reward their staff’s hard work and dedication.
Some alternative options include:
- Bonuses: While still a monetary reward, bonuses can be calculated according to pre-set key performance indicators (KPIs) – meaning if targets aren’t met, the business doesn’t have to pay a cent. The other benefit is that bonuses need only be paid annually or at other defined intervals, easing cash flow pressures through the regular payroll cycle.
- Equity in the business: A popular option with fast growing businesses that need every possible cent to fund that growth is to offer equity in the business. As an added benefit, this type of reward also acts as a direct incentive to workers to perform at their best, as they have a vested interest in the success of the business. Deliveroo did just that for its entire global workforce in May 2018.
- Team building activities: Such activities – meals out, attending conferences, fun outings etc. – can be a great way of rewarding whole teams on a job well done, with the added benefit of boosting social cohesion between employees in an environment away from the stress of work.
- Company holidays: Some businesses take their entire staff on annual holidays, which acts as a massive carrot for workers to work towards throughout the year. It doubles as the ultimate team-building activity, and like a bonus, can be made conditional on certain targets or goals being met.
- Additional leave: Boosting the number of annual leave days available to workers, or other paid days off (such as carer’s leave, parental leave, sick leave, rostered days off) are a great way for employers to boost work/life balance for their staff, allowing them to spend more time looking after themselves and their families away from work.
- Remote/flexible working arrangements: Again aiding work/life balance, changing working conditions can be a reward to employees who have demonstrated trustworthiness and ability to perform. For the most part, such perks generally come at little to no additional cost to employers.
- Third-party discounts: Some businesses such as gyms, cafes and childcare centres will partner with other firms to offer their staff discounted fees or memberships. It’s a win-win for all involved: you get to reward your staff, your employees receive discounts that ease their cost of living pressures, and the other business enjoys a boost in sales.
- Reward points: Loyalty schemes such as that offered by Qantas Business Rewards can turn the everyday expenses that the business is already making into rewards for team members for no extra outlay from the business. Qantas Points earned by the business can either be gifted to employees for free flights/upgrades on their personal travel, used for flight upgrades on essential business travel, or even to purchase items like gift cards, vouchers or nifty gadgets from the Qantas Store.
See also how to relieve some of the other common HR headaches business owners face.
A booming real estate group in Australia has seen significant growth in the listings they’re making.
However, with this growth came a blowout in costs, and it became apparent that a delicate balancing act would be needed so as not to hit a ceiling on the amount of growth that could be achieved.
The agency’s principal, Angela, undertook a review of its costs, which highlighted two primary expenses: employee wages and printing costs used for its marketing materials.
While not wanting to cut employee salaries or reduce commissions to its salespeople who had been responsible for delivering its stellar growth, Angela wanted to explore how to contain wage growth and implement alternative methods of rewarding her staff.
She also wanted to reign in the cost of printing, and believed that the higher volumes she was ordering entitled the agency to a better deal.
As a Qantas Business Rewards member, Angela identified a means of achieving both outcomes simultaneously. She took advantage of the Qantas Business Rewards partnership with her local Snap Centre to achieve a more efficient approach to her agency’s printing requirements.
In doing so, Angela recognised the business would now earn even more Qantas Points in addition to those that they earned through flying for business with Qantas and with the American Express Qantas Business Rewards Card , which she then used as an incentive for her salespeople – the best performers would receive interstate getaways paid for with the Qantas Points the business earned.
Staff morale has lifted as they have embraced the friendly competition to take out the next getaway offer.