How Reward Programs Can Impact a Company’s Finances
The competitive business climate today means more CEOs, managers, and other executives are looking for ways to improve in quality while reducing costs in all areas of business. The tight job market means a tough run, especially for small businesses, whose employees are now expecting more from them than ever. The importance of motivating workers cannot be overemphasized, and employee reward programs are excellent ways to encourage employees to change critical behaviors and habits that benefit your business, which consequently lead to financial benefits.
How employee reward programs can directly impact a company’s finances
The primary driver of a business’ success is its employees, as their productivity levels significantly affect the overall success of the business. Thus, it is essential that these workers are kept happy and satisfied by introducing an effective reward program into the company. Most companies have some form of a reward program, but few reap any significant rewards of these programs. This is because most reward programs are ineffective motivators because they do not satisfy the employees.
For a business’ reward program to lead to financial success, the program has to succeed in motivating the workforce. According to a report, 82% of employees that received a reward felt motivated, while 69% of employees that didn’t receive a reward did not feel motivated. This reiterates the importance of implementing an effective reward program in your organization.
The common misconception is that monetary rewards are the best motivator. This fact has been debunked by a recent survey that indicated that about 88% of workers quit their jobs for reasons other than money. This has caused many debates among HR personnel about the most effective employee rewards. A report carried out in 2015 indicated what rewards highly engaged employees had received.
According to the report:
- 30% received a cash bonus
- 25% of these workers didn’t get anything other than a “thank you”
- 23% percent received a meal or evening out covered by the company
- 18% received a voucher to spend
- 17% received overtime pay or training
This shows that even a regular “thank you” is an effective form of reward.
When your workers are motivated, they will put in exponentially more effort than they do when they’re not motivated. This increase in effort will lead to a higher level of productivity, and consequently a higher profit margin in your business.
Understanding what reward programs employees want
It is essential that you understand which rewards your employees want if you plan to satisfy them. This is the concept of personalizing rewards, and it is the difference between successful reward strategies and unsuccessful strategies. It is the job of the HR department to communicate regularly with employees to figure out their primary motivation, so your reward program can be tailored to the preference of your employees. Cash rewards are good, but as earlier demonstrated, there are other effective non-monetary reward options.
Rewards are an essential part of a company’s business strategy, as they help in the attainment of the company’s goals. Most organizations have a form of reward programs, but few of them are actually effective. This is because these organizations have failed to personalize their reward programs to fit their workers, leaving workers disgruntled and unsatisfied. To drive the financial success of your business, you have to design an effective reward system that will both satisfy and motivate your employees, while simultaneously making them more productive.