When employees have done great work, they expect some form of acknowledgment. In a competitive marketplace where your top talent always has their eye on the next stepping stone in their career, your organization must win employee loyalty through tangible appreciation. Budgetary constraints can be relentless, however, and often prevent appreciative managers from offering a raise. If you find yourself seeking creative ways to increase employee retention and reward exceptional worker effort, here are a few useful points to keep in mind.
Salary isn’t the key factor in engagement
Traditional business wisdom tends to equate employee rewards with raises and annual bonuses, but in today’s workplace, researchers have found that compensation levels don’t always have a strong effect on employee motivation. Harvard Business Review (HBR) points out that rewarding good performance with raises isn’t the most effective way of engaging your workforce. As a matter of fact, a number of studies have found that simply increasing a worker’s annual income level can actually demotivate them. The HBR authors write, “The more people focus on their salaries, the less they will focus on satisfying their intellectual curiosity, learning new skills, or having fun, and those are the very things that make people perform best.” As the study suggests, human beings thrive when they have the chance to develop their knowledge and abilities.
Recognition is a natural human need
Social connections are essential to people’s well-being; CNN cites a study in which employees state that they would sacrifice up to $30,000 in salary in favor of receiving high praise at work. Autonomy and control over work projects are also identified as key factors in employee well-being, according to research by a neuroscientist and an executive coach published in Forbes. A change in title is another way to express recognition for an employee’s outstanding contribution.
Flexibility is coveted
In addition to their desire for greater personal autonomy over the completion of work projects, today’s employees struggle to balance work commitments with the demands of personal lives. If you reward your employees’ best efforts with flexible work arrangements (FWAs), you’ll enhance your employer brand. An extensive study by the Society for Human Resource Management states that “Ninety-one percent of HR professionals believe implementation of formal FWAs had a positive impact on employee morale (job satisfaction and engagement).”
The success of your organization depends on attracting and retaining highly competent workers. Rewarding your top-tier talent with recognition, autonomy, flexibility and further training opportunities will strengthen your employer brand and build a profitable future for your company.