Reward your staff

It's fair to say that in the past rewarding your staff for having done a good job usually involved the exchange of money.

In todays more austere times, however, it appears that management are finding alternative ways of letting their staff know that they have over stepped the mark, in a good way.

So what does a more innovative approach to rewarding staff consist of? Those present at the CIPD event entitled 'Reward in a Time of Austerity' heard that the attitudes towards reward giving had changed in the last four years as a result of the more financially strict environment. Chris Bruce of Thomson Online Benefits told the conference, "organisations have found ways to maximize the value of their reward package at the same time as reducing cost. They are using the data they've got to make much better decisions."

Pre-recession, Bruce explained that the main objective of employee reward schemes had been engagement. Now, reward schemes focus more on a good return on investment. In order to maximise the return on investment, employers have been focusing more on educating their staff on how their current packages for their pensions, for example, work. Maria Strid, Head of Performance and Reward at HSBC, explained that there had been an evolution in the way employers viewed their reward schemes. She talked about for most businesses this year will be their fourth year of trying to get the most for their money out of their reward scheme. Naturally, the first step for many will have been to cut costs. A further step would probably have been to try to reduce costs by getting in touch with certain suppliers and trying to negotiate a better deal. At this point, however, she continued that it was actually possible for the business to "go further if you are willing to review the organisation strategy, think about where your organisation is heading and how reward will help you get there."

Strid advised businesses to open their minds to ways in which to increase efficiency through other methods than just seeking to reduce costs. She mentioned how the placement of resources could be an important tool. For example, by placing a resource in the area where the most return for that particular resource can be realised would increase efficiency by a different method than simply seeking to reduce costs. Some businesses are using performance related pay as a method of incentivising their staff to work harder.

Colin Miller, reward manager at Kent County Council, explained that whether or not performance related pay was a good option for your business would depend of several factors including that the decision would be "partly based on a philosophy – do you want to introduce pay into your appraisal and performance management process? If the answer to that is yes, and you think it will support what you are trying to do, then you can," said Miller. "When you look at the amounts people are getting at the end of the year, we are not talking about an investment banker's bonus here." He explained that benefit mostly came not from the potential reduction in an individual's bonus but rather "the fact that managers have sat down with staff and had a meaningful conversation about performance, recognised the work that has been done and worked out what buttons we need to press with them in future."

The CIPD's Reward Management survey revealed that performance-related incentive schemes are used by 65 per cent of employers, while 29 per cent have share schemes. Only 17 per cent employ financial education programmes and only 18 per cent use total reward statements, both of which are measures that the CIPD have strongly supported.

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