REWARDING EXCEPTIONAL PERFORMANCE
Staff members are paid for the work they do, but many employers have incentive schemes for exceptional performance. When considering these as an option, work out what constitutes expected performance, and plan a sliding scale for anything above it.
Defining Exceptional Performance
The term “exceptional performance” is not a fixed, scientific measure. It varies from task to task, job to job, and organization to organization. As a manager, it is important that you recognize and reward what you consider to be genuinely exceptional. To do this, carefully work out, and fix solidly, the levels at which both financial and non-financial rewards are triggered off. Seek to ensure not only good work gets good rewards, but also that top standards are not so high as to be impossible to achieve. You will find that a certain amount of trial and error is inevitable in this process.
Rewarding Achievement
Most incentive schemes tie rewards to sales or profits, or both. Do not reward for achieving budget, instead offer rewards at, say, 10 percent intervals above budgeted levels, and inform staff of this. The extra profit should handsomely cover the cost of the reward. You can choose to reward cost reduction, quality improvement, innovation, or customer satisfaction. Rewards must motivate, so monitor the scheme to be sure that they do.
Offering Non-financial rewards
Achievement is its own reward – but it is never enough. Achievers also want recognition. Even a simple “thank you” is an important underused reward that costs nothing. Staff also value inclusions in events like away-days to discuss company strategy. Such events fit into development programs that are central to sustaining job satisfaction, increasing responsibility, and enhancing career progress and personal growth. Other non-financial rewards such as gifts and holidays may prove cheaper than cash rewards – and everyone loves to receive presents. However, these provide less motivation than individual recognition, and are not substitutes for good, year-round management
CONSIDERING NON-FINANCIAL REWARDS
| REWARD | FACTORS TO CONSIDER |
| RECOGNITION
Handwritten note, engraved trophy |
|
| GIFTS AND PRIVILEGES
Holidays, sports facilities, merchandise |
|
| SPECIAL EVENTS
Weekends away, parties, theatre trips |
|
| PROFESSIONAL TRAINING
On-or off-site courses |
|
| SELF- DEVELOPMENT
Personal, non-vocational training |
|
| EQUIPMENT
Company car, laptop computer |
|
Offering cash rewards
Use rewards in the form of pay increases or financial benefits to recognize achievement, prevent a high-flying staff member from leaving the organization, or encourage an individual to take greater level of responsibility in his or her job. Remember, however, that this type of reward has only short-term motivational value. It can also lead to resentment among other staff members, and discourage interaction within a team.
CONSIDERING FINANCIAL REWARDS
| REWARD | FACTORS TO CONSIDER |
| SALARY INCREASES
Increases in basic rate of pay |
|
| COMMISSION AND BONUSES
One-off payments linked to targets |
|
| PERFORMANCE-RELATED PAY
Regular wage increases based on target-linked performance |
|
| SHARES/STOCK OPTIONS
Gifts of shares, or the chance to buy shares at a fraction of actual price. |
|
| SPECIAL RATES
Help with mortgage / rent, insurance, and other items within tax limits. |
|
| FAMILY HEALTH BENEFITS
Paid or subsidized schemes offering private family healthcare |
|
Celebrating Success
Personal thanks for exceptional performance are powerfully reinforced by being repeated or given at a public celebration. Celebrate success, and you can motivate everybody in the unit, not just the achiever. External awards and dinners have proliferated, and few industries are now without them. Pay for entries and tables at these events, and make a fuss of any winners. The same format applied internally is also effective. If a whole team, rather than an individual, is involved, celebration is highly appropriate. Parties give you the chance to motivate by words and by singling out social contributions, ensure, however, that any event of this type is carefully planned and well-staged. Skimping on any elements, especially on catering, is a false economy in terms of motivation.\
TIPS
- Make sure that the rewards you give are the icing – not the cake.
- Look first at those rewards that do not cost anything to supply.
- Make contests for non-financial rewards as much fun as possible.
- Do not let sliding-scale cash rewards become a source of demotivation.
- Give performance-related rewards, not just pay rises, where possible.
- Use certificates and engraved presents as reminders of high achievement.
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