How to Effectively Reward Employees

An effective recognition and reward program does not have to cost a fortune, and it can be one of the most lucrative investments a company makes. On a daily basis, school-age children earn gold stars in classrooms, and top varsity sports players earn trophies. Unfortunately, many employers think of gold stars and trophies as kid stuff, and they believe adults in the working word can only be motivated by money. This hypothesis is invalid. Companies that believe money is an employee's sole motivation for working are destined to lose some of their best people. The only strategic weapon a company has that cannot be copied by the competition is its people; this is why it is important to nurture them.
Motivation in the workplace is becoming increasingly important, because the corporate world is demanding higher levels of performance from employees. In an effort to increase employee productivity, managers are implementing total quality management, which incorporates continuous improvement and employee empowerment. The need for improved employee performance is also evident in the corporate downsizing trend, which results in flatter management structures.

Today many companies want to engender employee recognition. A recognition program alone is unlikely to work with a disgruntled or unmotivated work force. To be effective, a recognition program must be part of a whole culture of valuing employees. Many organizations have discovered low employee morale translates into reduced productivity, absenteeism, and a high turnover rate. In short, unmotivated people can affect a company's profitability.

Motivational techniques

* Raises and merit bonuses - Many managers consider raises and merit bonuses great motivators. In his book, 1001 Ways to Reward Employees, Bob Nelson reports 95 percent of American workers consider a cash bonus an incentive. But extra cash is often used to pay bills, and the reward is quickly forgotten.

The most effective morale booster is praise...