Your rewards strategy needs to take into account wh at your employees value, which means considering ‘out-of-the-box’ benefits, writes John McGill.
Creating a winning reward strategy is about more than financial incentives. Understand what your employees’ value most and determine your goals for real impact.
Benefits and rewards need to support the culture of your organisation and send a message about what behaviours you require. However, your rewards strategy also needs to take into account what your employees’ value – which means considering ‘out-of-the-box’ benefits. Out-of-the-box rewards recognise that many employees want more than just money. Increased annual leave, retirement plans and wellness initiatives are benefits that workers may appreciate just as much as salary increases or cash bonuses. A total rewards system is an effective way of taking this into account.
The Sibson Employee Value Exchange provides a model for prioritising financial and non-monetary rewards to support a company’s overall strategy using five categories.
1. Compensation: Provide financial incentives such as good base salaries, cash bonuses or incentive schemes and competitive market rates.
2. Affiliation: Build a sense of pride and belonging by creating a great environment to work in.
3. Work content: Allow colleagues a varied, challenging and meaningful work life.
4. Career: Perhaps especially for those in the early stages of career development, provide access to training and encourage their personal growth.
5. Benefits: Support employees outside of work with health or dental care, a comprehensive retirement package or other indirect benefits.
Considering how you can blend each category allows you to create a reward strategy that benefits the employee, while also encouraging the types of behaviours your organisation most values.
To determine which types of rewards your employees value, it’s worth considering your industry. The sector you operate in could attract certain types of people, or you might want to reward particular types of behaviour according to your organisational goals.
In the education sector, your employees most likely place a high value on learning. Therefore, one of your rewards or benefits could be allowing them time away from work to undertake new courses. Similarly, a company in the health and wellness sector might choose to offer exercise programmes or mental health days, increase annual leave or provide flexible working hours.
However, whatever rewards you offer must align with your own objectives. If you want the sales team to increase conversions, you might opt for financial rewards. Whereas, if you want to attract highly-skilled applicants or improve employee retention, a great work culture or generous retirement package may be more appropriate.
COMMUNICATING YOUR REWARDS
No matter how detailed your benefit system, it’s worth very little if your staff don’t understand how they benefit. When it comes to communicating your reward strategy bear in mind:
• Explain how competitive your package is: If you pay substantially above market rate, make it clear. Don’t assume all employees know what other organisations pay. Similarly, if your retirement package is much more comprehensive than your competitors, shout about it.
• Link rewards directly to the type of behaviours you want: Rather than just explain your health benefits, explain that you want to support your staff to be at their best and at work as much as possible. Make sure your sales team are aware that consistent wins are what you value, not occasionally good work.
• Communicate how to achieve rewards: Balance making sure your employees understand that rewards are not something they are entitled to, with being inspiring. If rewards are dished out too frequently, and to every colleague, they may lose value in the eyes of your employees.
Strategic Pay advise on all areas of remuneration, rewards and benefits. We’ll help you create a winning reward strategy and plan the best way to communicate it to your staff. Get in touch to start the conversation today.
John McGill is the chief executive officer at Strategic Pay.