Ho-Ho-Hold the holiday turkey

Recognition should be a year-round event

’Twas the night before the plant shutdown and all through the office, not a creature was stirring not even the compensation department.

And, while the holiday season has long been associated with a turkey, fruit basket or even a Christmas tree courtesy of the employers’ little elves, more and more, these traditions are falling out of the new school of thought on recognition and total rewards.

For employers who are carrying on the holiday tradition, considerations have to be made to ensure gifts and events are inclusive to all cultures and faiths.

“Fewer organizations are actually providing holiday bonus not linked to performance or a specific project. The Christmas bonus is becoming a minority,” says Glenda Oldenburg, a rewards-management and compensation consultant with Towers Perrin.
The point is that recognition is not only being delivered during the festive season. It’s becoming a daily — almost routine — part of an organization’s functions. Formally or informally — a swanky banquet, a scribbled thank-you note, a pair of tickets to the theatre or verbal appreciation — employers and managers aren’t waiting for year-end to say “hey, good job.”

“Companies are beginning to recognize that people are working longer hours and are giving up time spent with their families and friends, and they are recognizing it in these kinds of informal ways. They aren’t waiting until Christmas to show their appreciation,” says Oldenburg.

So, what about the holidays?
But, what about the holidays, that time of year where generosity and thanks are gift-wrapped and put under a festively decorated evergreen? Where’s Santa? Are employers being Scrooges?
No, they are just finding better ways to allocate recognition dollars, says Oldenburg.

“When employees are saying, ‘it’s just another turkey this year,’ employers aren’t getting the value for the money they are spending.”

On top of that, the workplace is more dynamic, more diverse, and with high turnover, and a more fluid labour force, the workplace has lost a lot of its “family” feel.

“It’s a shift in culture from being once a paternalistic-type organization. People are moving around a lot more,” says Oldenburg.

The change in the attitudes of the workplace and a corresponding change in how employers are handing out rewards and recognition, may also account for the decline of the once popular service awards, where senior employees could count on a gift, typically a watch, usually presented at a banquet or dinner, in recognition of the number of years of employment with the company.

While service should be recognized, rewarding service for service’s sake, is not in keeping with the new trends of performance-based recognition.

“Length of service does not relate to contribution to the company. If companies reward their employees on a yearly basis, I think that is more meaningful than getting a service award,” says Oldenburg.

“More (employers) are spending their compensation dollars in ways that are more strategic, for meeting their organization’s goals,” she adds.

Employers are increasingly being creative in how they deliver recognition and, even though fewer are now acknowledging the holidays with formal bonuses, some are using innovative ways to mesh recognition objectives with the holiday season.

The traditional banquet seems to remain a popular year-end closer, says Adrian Gostick, author and director of marketing and corporate communications for O.C. Tanner Recognition Company. These banquets can be organized around the holiday season to celebrate a service anniversary, a performance milestone or exemplary work. This formal recognition, says Gostick, is particularly effective because employees are allowed to bring their spouses to share in their “reward.” But, these parties must be differentiated from the company holiday get-together and their purpose properly communicated to the invitees, says Gostick.

“(Employers) shouldn’t make it a cattle call. They need to make it individual. These banquets can be very powerful. It’s a way to make (recognition) a formal event and at the same time to recognize the holidays. It’s a way to make these employees feel like someone has noticed those thousand things I’ve done all year.”

The company holiday party is another way employers can “reward” employees and at the same time show holiday spirit.
Most companies hold annual holiday parties and some are even using recognition dollars — instead of awarding a few employees — to subsidize and “spruce up” these events, says Oldenburg.
Important for employers to remember is that gifts and events have to be culturally sensitive and in tune with the demographics of the workforce, including age, gender, types of positions.

“As companies look to present an award at the end of the year or hold an event, they have to look at their employees and what their workforce looks like. Most are giving their employees a choice of award, a lifestyle gift, instead of choosing something themselves. They are being sensitive to those differences,” says Gostick.

To “cash” or not to “cash?”
A big cash bonus can go a long way for an employee, especially during the expensive holiday season. But while cash can pay the bills, pay for gifts, a holiday vacation, even a nice meal, is it doing anything to promote the goals of the employer’s recognition strategy?

For the vast majority of employers, probably not. It’s the non-cash reward that seems to be driving recognition trends.
While no one would give up the opportunity to receive “free” cash, most employees say the expectation of a cash reward isn’t one of the top motivators to reach their peak performance. According to a survey of 551 large employers across North America, only 15 per cent of employees reported that the expectation of a financial reward was a very significant influence on performance. The survey, conducted by Watson Wyatt in April, found that an overwhelming majority of employees are motivated by a desire to maintain a good working reputation (81 per cent), 76 per cent of employees are motivated by the importance of their work, and 66 per cent are motivated to achieve peak performance by appreciation.

“Companies are realizing that money they are giving out, while a nice gesture, isn’t meaningful to employees,” says Oldenburg.
Cash rewards aren’t memorable and since the intention of employers in giving out rewards to employees is to create a relationship. Forgetting what the boss gave you defeats the point of a “recognition” reward.

In a recent survey of a thousand American Express employees who had received a cash reward, incentive or bonus, 29 per cent reported using the money to pay the bills; 18 per cent didn’t remember how they spent it; 11 per cent reported spending it on gifts for family members; 11 per cent put the money in savings; and five per cent used it for a vacation.

“Cash gifts aren’t something you give to create a bond with employees. What employers are choosing to do is compliment a cash bonus with a tangible award. And Christmas time is a good time to give something that is long-lasting,” says Gostick.

Performance management: The new rewards program
For the last 300 days, your employees have stayed late, worked hard, stretched their talents and helped to make it a profitable year. It’s the holiday season and how can you thank them? Consultants are saying employers should be thinking about that on a daily basis.

The point is that recognition has to be immediate or as timely as possible.

This strategy is proving effective at the Canadian retailer Mark’s Work Wearhouse. Employees, from managers to those who work the shop floor, are all offered awards and bonuses directly linked to performance.

The list of rewards employees can receive, says Catharine Mcdade, compensation and benefits manager at Mark’s Work Wearhouse headquartered in Calgary, include cash and other “tangible” gifts which employees can choose from.
Bonuses and rewards are directly linked to performance. Employees are rewarded quarterly, monthly and even weekly in some cases.

“All it takes is for a couple of people to receive a cash bonus and they are telling all their friends about it. It’s really worked well for retention and recruiting. It seems to be encouraging staff,” says Mcdade.

Employees can collect points all year for performance in sales or customer service and then redeem them for a gift of their choice: a watch, golf clubs, barbecues, stereos, fishing gear.
“We don’t concentrate on doing exceptional sales and customer service during the holiday season only. That’s our commitment all year round and we reward our employees for it on an ongoing basis,” says Mcdade.

Employers are incorporating compensation, benefits, recognition and rewards into one overreaching strategy that promotes their company’s goals and rewards employees for being players in achieving these goals.

“(Performance-based recognition) helps focus employees’ behaviour. It signals to the employees what is important to the employer,” says Oldenburg.

Why reward employees? To attract and retain, increase worker productivity and enhance workplace morale and culture, says Gostick.

“The best way to achieve (these objectives) is through timely recognition. Meeting human needs; making employees feel valued and appreciated. It shouldn’t be limited to one time of the year,” says Gostick.

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