Why recognition and reward matters for small businesses

reward employeesEvery business, regardless of size, scale or industry wants to get the best from its people. When people work hard, it logically follows that output goes up.

The idea of achieving that through incentives is not a new one, but from the outside, it seems that a defined recognition and reward program is reserved for big business.

Smaller businesses just don’t have the time or resources to invest in developing something as grandiose as this and, when the focus needs to be on sustaining the business day-to-day to protect the jobs for everyone involved, it certainly doesn’t look like a business priority.

How cash-strapped small businesses can reward staff

When you say reward, it generally creates visions of complex commission and bonus structures, salary reviews, performance-related incentives and other financially-weighted approaches.

In addition, as the buzz idea of employee engagement expanded over the last decade and mega-funded startup culture was seen as a fertile ground for high performance, smaller things like drinks fridges, team outings, ping pong and other touches to make workplaces nice to be in arose.

For a small business or bootstrapped startup, it seems daunting. The onus is on the organization to give, give, give in the hope of receiving something back in the form of performance or productivity.

While researching this area, I interviewed many small business owners and their comments often followed a similar path – we give everything, yet people still don’t show loyalty. What’s in it for us?

It’s really important when thinking about how you recognise and reward your people to understand why you’re doing it. Of course, it’s because you’re a nice employer and you have a responsibility to treat your people well, but it’s a two-way relationship and they have a responsibility to actually work.

A workplace full of perks

When I visited Mind Candy, creators of Moshi Monsters a few years ago, I was struck by a workplace that seemed full of perks and fun.

It was clear to every member of the team that this was a reward for their contribution, not a given right and that if they weren’t part of the team, they couldn’t stay in this club. It was a great introduction to the fundamentals that underpin ideas around reward and recognition that any organization can adopt.

Any organization that gets reward and recognition right can foster loyalty, effort and more from their teams, which results in better productivity, profitability and even the ability to collaborate and innovate more effectively.

Getting it wrong can create a drain on resources, lack of morale and all the dangers that come with these risks.

5 Key things to remember when looking to reward employees

There are five things that all organizations should consider as a starting point when it comes to rewarding employees:

1. Get the relationship right

The fundamental way to foster loyalty, contribution and connection is by getting the relationship between people and organization right. Approach it like you are building a community, not a business.

If you treat your people like children, they will act like children, but by establishing a real connection around a shared goal, based on two-way communication and trust, the relationship carries reward in itself through the psychological boost of given by autonomy.

Social media scheduling service Buffer runs a wholly remote, autonomous workforce that is passionate and committed – this approach can work for any business.

2. Lead instead of manage Recognising and rewarding employees effectively

There are studies that link autonomy with everything from increased staff retention, to productivity, innovation and even health and wellness benefits.

To allow people to thrive with a level of autonomy, you need to step back and give them that freedom to act. Instead of managing them to minute tasks on a spreadsheet the role of a leader is to look, listen, understand and act.

Don’t do all the work for your people, but dedicate your time to creating the platform for them to do their best work. It costs far less than an annual bonus and is far more impactful.

3. Only make connected rewards

When someone does a great job, hits a milestone or achieves something, it should be celebrated.

You could structure this as a high-value annual bonus, although studies by Globoforce and IBM have shown the positive impacts of this last for less than four weeks of the year and cost a great deal financially.

Far more prudent and impactful is the smaller, genuine reward. A gift card, ice cream, anything that connects reward with recognition is powerful, because it shows a level of thought.

Hersheys adopted these tactics and saw an increase in employee satisfaction of over 23% across just three years.

4. Say “Thanks”

Sometimes the easiest things to do are the most powerful. Globoforce’s wider research has shown that the power of this simplest of human recognition acts is greater than any financial incentive in increasing employee morale – which in turn links to increased productivity and loyalty, all of which are good for the bottom line.

Peer recognition – the feeling that those around you actually appreciate your efforts – seems obvious, but it’s something so often overlooked in businesses as they strive to be less human and more businesslike. Treat people as people – the benefits are there for everyone.

5. Keep it simple

There are a number of reward and recognition platforms out there, consultants who can support the development of programmes and integrated approaches that balance financial incentives with other offers, but this is far beyond what most small businesses and startups need.

Impactful reward and recognition doesn’t need to cost the earth, it just needs to have a purpose.

Show your people you appreciate what they do and help them to thrive. Because when people thrive, organisations thrive too.

About the author

This guide has been written exclusively for ByteStart by Andy Swann, a leading expert on the relationship between people, organisations and work. His new book The Human Workplace is out now, published by Kogan Page.

More on people matters

ByteStart is packed with help on hiring, managing and motivating employees, some other popular guides include;

Employing staff

Motivating your team

Leading a business

Bytestart Limited info@ByteStart.co.uk

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