Creating a culture of performance

by 13 May 2008

Q. We have about 1000 employees and run a KPI-based reward and recognition (R&R) program. It was fairly successful when we launched it but we think we should be getting a stronger return 12 months down the track. How can we improve performance?

A. When seeking to improve the performance of R&R programs it is important to consider whether the program properly motivates employees, whether employees are engaged with the program and whether the program is administered effectively.

KPI-based R&R programs focus employees on business critical outcomes. But they address only part of the story. Outcomes are not always black & white.

Take the example of an employee who tries hard to achieve a challenging KPI. They exhibit all the behaviours and attitudes that their employer would hope for. Despite their very best efforts, the employee just fails to reach target. Their effort is not rewarded.

Consider the motivational impact of this scenario. The employee is de-motivated because, despite their efforts, they have been deemed to have “failed”. Furthermore, their positive behaviours have not been reinforced.

That’s why it’s important to also reward the behaviours that lead to an outcome.

Outstanding results should be rewarded … and rewarded well. Equally, it should be recognised that there will always be variation in peoples’ performances against KPIs. Hence, there is a need to continually encourage people to stay focused on the behaviours that will deliver results over time. This lays the groundwork for a ‘culture of performance’.

Promoting behaviours proven to deliver outcomes will inevitably lead to better results because we are reinforcing how to achieve success. Making ‘behaviour rewards’small but delivering them at a high frequency puts those desired behaviours at the front of peoples’ minds.

Employee engagement with a program can be affected by the perceived value of the reward and the type of reward offered. Budgets should enable participants to redeem a reward at least once a year and this reward needs to be of a value that engages employees. That doesn’t mean high monetary value, though.

The reward needs to appeal to individuals’preferences. Offering a broad range of rewards will allow employees to find something that engages them.

The value of rewards and the decision-making around rewards both need to be seen as fair and equitable.

Furthermore, recognition and rewards must be received in a timely manner to have a motivational effect. Participants need to feel rewarded for their hard work before they’re motivated to repeat it.

Finally, R&R programs are often thought of as ‘set and forget’ but programs must be continually ‘sold’ to employees. They need to be reminded of the program and its objectives. Emails, posters and public recognition events are effective to remind participants why it is valuable.

Simplifying administration enables program owners to focus more on the strategic side of a program – for example, the ongoing communication, program evaluation, additional promotions, and so forth.

Specialist R&R firms can provide expert solutions to reduce the burden of program administration, rewards sourcing & delivery, as well as designing programs to address the kinds of issues described herein and maximise the motivational effect of employee rewards.

By Adrian Finlayson, CEO of accumulate. 1300 733 725.