Five Factors in Rewarding Employee Performance
If you have a terrific team made up of high-performers, you need to make rewarding employee performance a priority. “The good and bad news is that it takes more than cash,” says Stacey Carroll, director of professional services at online salary database PayScale.com. “Driving satisfaction with employees requires work beyond a bump in pay.”
Beyond a salary negotiation for higher pay, there is the question of how to reward employees for good performance, especially when financial rewards are not always possible. The good news is there are a lot of ways to reward employee performance at businesses of all sizes.
Here are a few things to consider when rewarding employee performance.
1. Communication Skills
Carroll tells companies that the single best thing they can do to improve employee satisfaction and show employee appreciation is to use effective communication skills. Ideally, employees should understand how decisions about compensation are made, on what basis, and when they can expect to hear about raises and performance.
Employees often equate how much they are paid with how much they are valued, which might not be the case, especially for a small business under increasing financial pressures. Keeping your workers in the loop on decisions and by communicating processes can help to alleviate this problem.
In large organisations, one employee typically does one job. However, this is not typically the case for small businesses, where a person might be, say, the accountant, the facilities manager and the business manager, as well as the person responsible for coordinating all employee birthday parties and answering the phone when the receptionist is out.
Carroll advises companies to tie salary to the highest skill set that they ask employees to perform on a regular basis via benchmarking. She also recommends looking at your internal hierarchy and comparing employees’ skills and job duties against the people they supervise and against the people who supervise them.
3. Consider Non-Financial Rewards
“Compensation alone will never attract or retain top performers,” says Carroll. Instead, she says that companies should take a more dynamic approach, especially with top performers who want a workplace where their performance is recognised.
Non-financial rewards can take the form of offering developmental training or other opportunities to be involved with the organisation at a deeper level, according to Carroll. It can also mean offering non-traditional solutions, such as the flexibility of a four-day work week to an employee who values that extra day off. Non-financial rewards are a great solution for small companies that don’t have the budget to offer financial rewards.
Rewarding employee performance does not have to cost you much, or anything at all. There are plenty of creative ways to acknowledge the efforts of high performers.
4. Ask for Employee Feedback
Sometimes, the best way to find out how to reward employees for good performance is to find out what they want. Using an employee satisfaction survey can help you figure this out. “If you are really, truly trying to understand employees and what motivates them, one of the best things to do is just to ask them,” Carroll says. “All employees are motivated by something a little bit different.”
Engaging employees in what these rewards can look like will help you better shape the ways you show employee appreciation. Beyond having happier, more satisfied employees, it also makes your company competitive in recruiting great employees.
5. Be a Good Boss
Carroll agrees with the well-known adage, “Employees do not leave companies, they leave bosses.” “Somebody who you genuinely feel is engaged in helping you to be successful and giving you opportunities for growth really cannot be supplemented by large sums of money,” she says. Instead, strive to be a good boss—start by learning to become a good listener.
Employees who feel seen and heard by their boss are generally more satisfied or are at least more secure in their belief that they will be listened to. Taking the time to listen to and engage with your employees also helps you better understand what motivates and drives them, allowing you to better craft performance-based rewards in your company.
Rewarding Employee Performance Can Also Strengthen Your Recruitment
As you consider how to reward employees for good performance in your company, keep in mind that many of those rewards are also great recruiting tools. However, a tool is only as good as the strategy behind it. How do you know if your strategy is effective? That is where we can help. Post your job listing for free at Monster and start recruiting the best candidates for your company.