During this holiday season, you’ve probably come across the iconic scene from National Lampoon’s Christmas Vacation: Clark Griswold, gathers his adoring family around him as he opens his freshly delivered holiday bonus. Rather than unveiling the check he’d expected, which would cover the deposit he’d put down on in-ground swimming pool, he is most disappointed to learn that, due to cutbacks, he’d received a subscription to the Jelly of the Month Club.
Though I’ll save you a recap of the rest of the movie, which is both hilarious and possibly relatable – particularly if you’ve missed a bonus or felt the bonus received was not proportionate to your effort – it perfectly sums up the expectation and impact of an employee reward strategy.
While the holidays seem like the most natural point to dole out bonuses as it’s typically the time where your employees can really use the extra cash – bonuses, let alone holiday bonuses, aren’t as prevalent as they used to be. According to some recent surveys, only 67 percent of companies plan on giving out cash bonuses around the holidays and only 35 percent of small businesses plan on doing the same. Instead, it’s becoming increasingly common for companies to combine recognition (gratitude), action-based rewards (items or gift cards), long-term rewards (raises and benefits), and short-term rewards (bonuses) throughout the year to motivate, engage and retain employees.
Here at Bank Mutual, we use all of these strategies to reward employees and it shows in our culture. It’s not uncommon for us to be rewarded with gift cards when we complete a group project or just because a boss noticed we’ve been working hard. In addition, we end meetings with recognition and thank yous for those colleagues who’ve made a difference in our work life, or have gone above and beyond. And, I’ll tell you first hand; it makes a huge difference in the time and effort we put in.
So, how do you get started developing a strategy that is both fiscally responsible and rewarding?
Align your reward strategy with your business strategy. At the beginning of the year, know where you want to be at the end of the year. Know what benchmarks you want to hit and what projects or teams are vital to hitting those targets. From there you can work on crafting a reward mix that will motivate key teams to hit these milestones as efficiently as possible.
Focus on the rewards that matter to employees. Believe it or not, handing over a bonus check may not be the only thing that motivates employees. Employees can view other things such as a group outing, lunch catered in, or the flexibility to work from home as rewarding and motivating.
Streamline your delivery. If you’re rewarding an action, like finishing an important project, it’s most effective when done as soon as the project is complete, not months after the fact. Having the systems and policies in place to make this happen is key.
Balance monetary and non-monetary as well as personal and group rewards. The challenge with any strategy – be it savings, retirement, or business – is to find a balance that’s both effective and sustainable. It’s no different with a reward strategy.
Communicate, communicate, communicate. You can’t reasonably expect employees to rise to the occasion when you’ve never established what your expectations are. Part of an effective strategy involves communicating goals, creating healthy competition, and recognizing achievements amongst peers to drive engagement.
Ultimately, a successful reward strategy starts with you. As an employee, you need to be aware of and openly communicate what motivates you. As a manager, you need to get comfortable with rewarding and recognizing a job well done. Many times, employees are told when they make a mistake, but not when they excelled at a task. Hearing something as simple as “thank you” or “good job” motivates an individual to continue doing good work. And, let’s be honest, it probably makes you like your manager and organization, which is key in retaining top talent, especially today. A reward strategy isn’t just about money. It’s about fostering a positive work environment and supporting a culture that celebrates successes and encourages gratitude.
In short, it’s the gift that keeps on giving, Clark.