Five factors in rewarding employee performance
Want an employee to feel appreciated? “The good and bad news is that it takes more than cash,” says Stacey Carroll, director of professional services at online salary database PayScale.com. “Driving satisfaction with employees requires work beyond a bump in pay.”
Beyond a salary negotiation for higher pay, there’s the question of how to reward employees for good performance. Here are a few things to consider:
1. Communication skills
Carroll tells companies the single best thing they can do to improve employee satisfaction is to use effective communication skills. Ideally, employees should understand how decisions about compensation are made, on what basis, and when they can expect to hear about raises and performance.
Employees often equate how much they’re paid with how much they’re valued, which might not be the case, especially for a small business under increasing financial pressures. Keeping your workers in the loop can help to alleviate this problem.
In large organizations, one employee typically does one job. This isn’t the case in small business, where a person might be, say, the accountant, the facilities manager, and the business manager, as well as the person responsible for coordinating all employee birthday parties and answering the phone when the receptionist is out.
Carroll advises companies to tie salary to the highest skill set that they ask employees to perform on a regular basis via benchmarking. She also recommends looking at your internal hierarchy and comparing employees skills and job duties against the people they supervise and against the people who supervise them.
3. Consider non-financial rewards
“Compensation alone will never attract or retain top performers,” says Carroll. Instead, she says that companies should take a more dynamic approach, especially with top performers who want a workplace where their performance is recognized. Non-financial rewards can take the form of offering developmental training or other opportunities to be involved with the organization at a deeper level, according to Carroll. It can also mean offering non-traditional solutions, such as the flexibility of a four-day workweek to an employee who values that extra day off.
4. Ask for employee feedback
Which brings us to our next point: Sometimes, the best way to find out how to reward employees for good performance is to find out what they want. Using an employee satisfaction survey can help you figure this out. “If you’re really, truly trying to understand employees and what motivates them, one of the best things to do is just to ask them,” Carroll says. “All employees are motivated by something a little bit different.”
5. Be a good boss
Carroll agrees with the well-known adage, “Employees don’t leave companies, they leave bosses.” “Somebody who you genuinely feel is engaged in helping you to be successful and giving you opportunities for growth really can’t be supplemented by large sums of money,” she says. Instead, strive to be a good boss—start by learning to become a good listener.
Having the right employee rewards can also bring you the right applicants
As you’re considering how to reward employees for good performance in your company, keep in mind that many of those rewards are also great recruiting tools. However, a tool is only as good as the strategy behind it. How do you know if your strategy is effective? Sign up for Monster Hiring Solutions today and you’ll get cutting-edge insights into the job market, hiring strategies, and more.