Health benefits, a raise once a year and vacation time pretty much were what counted as “benefits.” Well, that age is over.
Today’s organizations face a much bigger challenge of catering to a workforce that has grown up in a way to naturally have a completely opposite set of expectations. Employee rewards matter more than they ever did. And leaders now understand that rewards need to be agile, holistic and personlized. Giving strategic importance to reward programs is going to become a priority as that is one way of retaining the best of talent. Category leaders are now emphasizing on creating rewards that are delivered more continuously, and that take into account an employee’s contribution to his team and organization as a whole. And this goes beyond work but also focuses on creating learning opportunities and helping employees grow.
Here are some ways that can help organizations make this transition in their employee reward strategies:
Creating a culture of learning
87% of millennials say development is important in a job. Career growth is the biggest contributor to higher retention levels for this generation. The key to staying at a company for the workforce of today is professional and personal growth. They will only stick to companies that understand these aspirations.
A culture of learning needs to be created as a reward for being a part of the company. Access to a vast library of content for employees to explore and access at the time of need, interactive assessments, and surveys that ask for their opinions on matters, involving them in content courses that help them learn more about projects are all investments in their skill. These will reap higher benefits and lower turnover costs.
Millennials want to be actively learning and on-demand training and access to a pool of rich content are what can keep them satisfied. Training delivered across mediums and devices, along with flexible learning opportunities can give them the assurance that their organizations deeply cares for their professional development and contribute to employee engagement.
The rise of the gig economy is a reality with the whole world opening up to the idea of freelancers and remote workers. This new generation of the workforce is motivated, and not bound by rules. They believe in delivering quality without believing in standardized rules that have been going on for generations. Policies and procedures are important for effective functioning, but not those that choke employees.
The best employees always have a lot of ideas and insights which excite them. They need to be heard. They need to feel like they matter and like they belong to space where their individuality and talent is appreciated. Providing flexible options can also be intangible, where the employee does not feel any discomfort to come forward and share their ideas. Flexibility can also be around work hours as most of the workforce today is mobile and prefers to have the liberty to work from anywhere. Employees also give a lot of importance to personal responsibilities and the smart workforce of today knows how to juggle between work and personal life. They should be given the option of being able to work at their own pace, provided they have a record of brilliant and consistent performance.
Making rewards a fair game
Performance reviews conducted once a year that decide on pay scales on the basis of a few annual interactions aren’t looked up to by employees or managers. These reviews have been largely unpopular because they are susceptible to huge biases, and because compensation decisions are made on grounds of inadequate and incomplete information about an employee. Such processes of deciding compensation are mostly considered political or arbitrary which frustrates employees. The biggest mistake an employer could commit is to reward employees who do not even deserve it, or fail to reward those who do.
Such attitudes towards reward programs can have a devastating effect on employee morale and happiness, making the best ones leave. There is a huge lack of transparency when it comes to the way pay scales are decided. Employees do not like to be kept in the dark in these matters, and when they do they are 60% more likely to leave the organization.
Feedback as a reward
Another critical transition that is required is offering continuous feedback as a reward. This is much needed by today’s generation of the workforce who continually seek coaching and advice from their superiors. Managers will play a critical role in achieving that as their interaction and contribution is key to making continuous performance reviews a success.
54% of millennials have reported having frequently felt that their manager is unprepared to give feedback during performance reviews. Such a system will not work anymore as feedback is key to millennials. They want to know how they are performing and what is needed for improvement. Regular review meetings, pulse surveys need to be made a part of company rewards culture.
The rewards and recognition programs of most organizations are still stuck with traditional approaches. The longer organizations delay understanding the preferences of their workforce, the higher the losses from employee turnover and disengagement will be. The current flaws in the system need to be identified and removed. The new rewards and recognition programs should address new work habits, technology preferences, compensation and the nature of the job itself.