With the amount of competition in businesses today, raising quality while keeping costs low is an absolute must. Especially pertinent for the smaller businesses, employee performance may make the difference in the survival of the business.
One way to motive employees without excessive spending is with the use of awards. By recognizing the employees’ abilities and contributions, the employees are given a sense of pride in their accomplishments. It is this pride that will push the employees forward into working harder, and with a greater sense of satisfaction than before.
Using awards as stepping stones if effective. Providing a set document stating what an employee needs to do within the business in order to be awarded gives some control to the employee. They can now decide they want to work harder and do more because of the sense of satisfaction provided by the award. Often, this will result in a marked improvement in an employee’s performance.
The Different Award Programs
Award programs can be developed to benefit either employees or teams. Variable pay is a program where an actual part of an employees’ pay is deemed to be at risk. This can be used to boost the performance of an employee or an entire team because the rewards are strictly performance based.
This programs can include benefits like options in stocks, awards for select accomplishments or even packages containing specialty benefits. The award goals should be a challenge to earn without being so difficult the employees will not even try to earn them.
Bonus programs work quite well in organizations concentrating on sales. They are given to employees by making a certain number of sales or increasing their total sales by a given percentage. Making sales in certain territories or in a specific period of time can also be criteria for achieving this award. Whatever bonus the company awards should be achievable or they will not work.
Stocks as An Award
Awarding employees stock options in the company has always been popular among some of the larger companies. This option means an employee can purchase a certain amount of company stock at a set price for a predetermined length of time. Although the time period differs, it is usually set at a period of about ten years. This is designed to make employees want to continue working for the company for an indefinite period of time.
This way, the employee becomes vested in the company and is not likely to quit. One of the strongest benefits to this course of action for the company is they receive a substantial tax deduction. This compensates the company for offering the stock options to their employees. Although there are risks for both the employee and the company, this method has been proven effective as long as the company’s assets continue to grow at a steady rate.