Reward Programs Not Aligned with Business Needs

Towers Perrin recently issued a report finding that there is a growing gap between reward programs and the business strategy they should be addressing.

Per Towers Perrin, despite the major upheavals in business in the last two decades – globalization, boom and bust cycles, technology advances, labor issues – most companies have not adjusted their rewards programs in any meaningful way to keep up with these changes. Just a few specific findings include:

Little customization of award outside sales – which violates one of our foundational tenets of strategic recognition – available to all. Elitist programs that target the top 10% or a particular function group such as sales ignore the valuable contributions of other groups and the middle 80% where, according to Jack Welch and others, the majority of the work gets done.

Limited measurement of ROI – which violates another foundational tenet – clearly defining goals and measuring for success. These basic principles of operational excellence certainly apply to recognition and reward programs that are implemented strategically. Numerous authorities on recognition and HR have offered measurement and metrics advice.

Reward programs do not link to business needs – which violates a third foundational tenet – tie recognition to company values. Using a strategic recognition program to reinforce the company values in the majority of employees only serves to strengthen the company at every level through a culture of appreciation while driving toward the delivery of key business goals.

Towers Perrin offers a key bit of advice as well – “avoid the ‘one-size fits all’ approach to rewards because it lacks focus and can marginalize the return on investment.” This is another foundational tenet – offer the reward of choice. Let your employees determine for themselves what they feel is valuable and appropriate, but never neglect to frequently, consistently and publicly tell them “thank you” for their efforts.