Do you have a reward strategy?
You may have heard the term ‘Reward Strategy’ bandied around before but this is not an area that can be underestimated. It can be a key contributor in your business to ensure that you are driving the right levels of performance and behaviours to enable you to achieve your goals as a business.
If we look at the Maslow’s ‘Hierarchy of Personal Needs’ where he conducted an assessment of what motivates people to work, the first key component which Maslow identified from his research was that people are first and foremost motivated to work by money. Reward does not just focus on pay but also looks at what other areas of monetary value you can introduce to encourage your employees to deliver the results and outcomes that you are looking for.
Here’s our 4 key factors to consider to get you started:
1) Business Plan – what are your business goals for the next 3-5 years? By determining your key business goals, this will enable you to determine where your employees need to be channelling their energies.
2) Performance – what key characteristics do your current employees need to have in the future in order to enable you to achieve your business goals? Do they need to be more sales orientated? Do they need to have more knowledge in the latest technologies or best practice?
3) Motivation – what tools are you using to motivate your employees and how effective are they? Are your salaries competitive with current market rates? What other methods do you use to reward performance?
4) Skillset – how do you differentiate between employees in rewarding their performance? Some employees are more skilled than others and therefore, it’s important that you have a reward scheme which differentiates between different groups and skillsets of employees and plays to their strengths.
According to the Chartered Institute of Personnel and Development, the average cost of recruiting the wrong person is £8,200, rising to £12,000 for senior managers or directors. This cost isn’t just related to recruitment and advertising fees, but also involves the cost of management time in training the new starter and the time that it takes them to get up to speed.
This could be a huge overhead to your business which could be avoided if you have a reward strategy in place which supports your business goals and is aligned to the needs and aspirations of your workforce.
To find out more on the subject, please contact Sue Green on 07951 356700 or visit evergreenhr.co.uk