One of the key elements of well-designed employee incentive schemes is that the benefits apply to all employees regardless of seniority, productivity, or perceived management favoritism.

However one-off incentive awards can have mixed results for overall staff motivation.

During the recent economic downturn largely fueled by the Covid pandemic, many organizations have cut back their reward budgets and are trying to find inventive ways to keep staff motivated

Many reward budgets have been cut during the economic downturn, so employers have had to be creative in finding ways to show key staff they are appreciated. With pay freezes in place and a ban on bonuses, some organizations have opted to give key workers one-off incentive awards to keep them motivated.

Creating Special Awards

One idea is to create an award for something like the employee deemed to consistently go the extra mile. This type of award is classified as an ‘envy experience’ award and may be presented at the company conference so the winner’s colleagues may do more to go the extra mile so that they might achieve the award in the future.

This type of public presentation can be valuable for motivating employees. But staff must understand why someone has been given an award.

The winning employee’s peer group and manager need to be aware of the award because the achievement of the award is generally more motivating than the value of the reward itself.

It is also important that clear guidelines are developed to show how the award is achieved, and for employees to track their performance. Otherwise, you run the danger of employees feeling the award is simply given to the manager’s favorite’, or it is being given out in turns, regardless of performance, and if you stay long enough, you will eventually get your turn to win the award.

Secret rewards lead to demotivation

Handing out awards behind closed doors, however, can harm staff motivation. Being secretive causes problems when others hear about it because they feel their work has not been valued. This becomes an even bigger problem if many employees feel the recipient is undeserving.

Such awards can include retail and experience vouchers, or gifts like a bottle of champagne.

For these types of awards to be truly effective, all staff need to be aware of their existence. The challenge is, that the competition and the rules associated with the reward have to be fair.

Awards can be viewed negatively

One-off awards can be demotivating if an employee wins the award, then replicates their performance but then goes unrewarded.

Some businesses give an annual bonus, usually at Christmas. This might be in the form of a retail voucher rather than cash as it may be tax-deductible for the business.

However, sometimes the value of the reward varies depending on the profitability of the business.

Again, this can act lead to demotivation. If you get a $500 retail voucher every Christmas then one year you only get a $300 voucher despite working just as hard as in previous years, what message is that sending.

For these kinds of rewards, make them part of your business budget from the start of the year so that the same amount or more is paid out regardless of business performance and profitability.

One-off awards must have rules that are clear and consistent. Provide all staff with the resources and training to improve performance and employ a strategy that ensures all who achieve the required performance, receive the reward. 

Check out these Global Resources Reviews and call on their advice to ensure employee rewards are motivating employees and not demotivating them.