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Employee good work attracts not only job appreciation but something more than that. This
something in corporate can be named as Reward. As per the latest trend employer
appreciate good work done by employees in a special way. The ways of sharing their
appreciation however differ. In order to have a systematic approach towards the
appreciation of rewards, there is a need for reward and recognition policy.
Employees besides wanting a good salary, friendly environment, growth opportunity also
want to be appreciated for the outstanding work performed by them. Reward and
recognition play a major role in attracting and retaining talent within the organization. It
not only acts as a morale booster but also promotes 3 P's i.e. Productivity, positivity, and
promotion. Such kind of programme builds up motivation in the workplace. However, an
effective reward and recognition programme cannot work in isolation. It needs to have
collaboration from employee managers and senior management. The role each one of
them plays in making reward and recognition a success is explained below.
Flexible: Reward programme must be flexible. It must be as per the demand of time and
place.
Timely: An employee should be rewarded on time else credibility is eroded with the
passage of time.
Genuine: The appreciation must be genuine.
Disclaimer: The content prepared has been created with the greatest care. These
policies have been prepared for the sample. However, for accuracy and completeness,
hrhelpboard.com cannot guarantee. The user is therefore requested to professionally
check or to have professionally checked the suitability of all content for its use.
Index
1. Aim
2. Purpose
3. Scope
4. Definitions
5. Component of reward structure
6. Steps for development of effective reward structure
7. Why reward employees
8. Parameters for reward programme
9. Most important steps for reward and recognition
10. Key responsibilities
11. Reward and incentive
12. Nominations
13. Selection
14. Effectiveness of policy
15. Review of policy.
Aim: The major aim of reward and recognition policy is to attract and retain the best
talent. In order to attract and retain it becomes important to recognize the efforts put in by
the employee in terms of performance, attitude, and achievements.
Scope: This policy is applicable to all the regular employees of the company.
Definitions:
Reward: Cash or noncash award given for outstanding performance by the employee.
Reward and recognition: Reward programme developed and communicated by the HR
department.
1. Target the audience: One reward programme cannot fit everywhere. It must be
designed keeping in mind the audience. Every employee is different what motivates one
in the workplace might not motivate the other. Though the reward programme can be
customized individually, however the following need to be considered before designing
an effective reward and recognition policy.
a) In designing an effective reward programme choose your target carefully. Have a look
at the type of behaviour which one wants to improve through the reward and recognition
policy. The behaviour, however, should be measurable for instance decrease in cost.
b) Consider the various types of challenges being faced by your employee. How
rewarding their work motivates them to do better work.
c) Be reasonable while setting the goals for employees. Too many goals do not produce
any fruitful result.
d) Are the goals practically achievable?
Carefully design what type of performance you want to reward. Once decided to
communicate your programme to your employees.
In case reward and recognition programme is very fancy you might not be able to run it
for a long time. So before communicating your reward programme to your employees
define your budget. Following should be considered in designing your budget:
a) What kind of advertisement /Promotion you plan for reward programme.
b) How many recipients for your reward and recognition programme.
c) What is going to be the cost of the reward programme?
d) Is it going to be formal or informal reward programme?
e) What is going to be the cost of administration?
f) The cost of training managers and supervisors.
Choose the type of award you want to give your employees. The Success of the
programme depends majorly on how you want to reward performance. Choosing the type
of reward is an important step.
7. Evaluate the programme: In order to know the effectiveness of the programme. Try
to understand
Types of Incentive:
The types of incentive include the monetary incentive and Non- monetary incentive.
Monetary Incentive: Monetary incentive means a kind of incentive that pays for good
performance of employee through Money. Monetary incentive includes Merit Pay, profit
sharing plan, Pay and allowance, commission, stock option, bonus, suggestion plan and
perks, fringe benefits and perquisites.
• In Formal Rewards:This is the most effective means of rewarding and recognizing the
efforts of employees on an immediate basis. It is generally given in the form of Personal
or verbal thank you, an email or personal note to the individual, sharing achievement in
team meetings, a day off for a job
• well done, Give an employee more autonomy, Offer flexible work schedules or work
options, Giving employees with a computer upgrade, mentor other colleagues etc.
Informal Rewards:
Formal Recognition:
Budget: Budget will be allocated by the finance department. The finance department is
responsible for allocation of budget in a fair and equitable manner that all employees have
equal opportunity to benefit from the reward. The Budget may be reallocated as
appropriate.
Nomination Process:
Selection Criteria:
Selection criteria must be documented as part of the Employee Reward and Recognition
Program. The Finance department may designate an individual or committee, working in
conjunction with the Human Resources Representative, to develop specific award
standards and selection criteria, and to nominate or select award recipients.
The Effectiveness of policy:
The effectiveness of policy is monitored by the HR team to ensure the policy is applied
fairly.
Review of the policy:
The policy may be reviewed at any time on request of staff or management but will be
reviewed yearly automatically.
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Sample Policy - II
Principle:
Variable Pay: Variable pay can be tied to the performance of the company, any
organisational accomplishment or an individual performance or both. It is given as one
time reward. Still it is one of the motivational programmes for reward and recognition.
Details of variable pay can be referred in Compensation and benefits policy.
Stock Options: This reward and recognition method is very popular nowadays. In these
types of incentive an employee has the right to buy a specified number of a company’s
share at a fixed price for a specified period of time. The question does arise on how to
reward employees so that they remain motivated for a long time. Stock option is the
answer.
Stock options are authorised by a company’s board of directors and approved by its
shareholders. This employee reward is given by a certain percentage of the company’s
shares outstanding.
Non monetary type of incentive: Non cash reward programme works better than cash as
it promotes improvement in team work, increasing customer satisfaction and motivation
in workplace among other programmes. Reward and recognition has a timing element.
It is must to occur for staff appreciation. if High
rewarding performance continues then reward & incentive can be one of the factor for it.
Both reward & recognition programmes have their place in business. By rewarding
performance business will have an edge in competitive market place. Non monetary
incentive reward employee performance with opportunities other than related to monetary
incentive. It includes flexible work hours, training opportunities and ability to work
independently. Such programme motivates employee as there is learning of new skills
and pursuing the advance opportunities
Timings
Types Approval
Criterion Level Purpose of the Felicitation
of Rewards Required
Reward
Going
Company apparels extra mile To
and motivate
Immediate As and when
performing Branch Level and Instantly
Manager/HOD required
work inspire the
beyond employee
own duty
Timings
Types of Approval
Criterion Level Purpose of the Felicitation
Reward required
Reward
Recognize
commitment
Excellence in
towards setting PAN India
all spheres of PAN India Senior Management Annually
Employee of excellent event
the work done
the year award benchmark by
an individual
To recognize the
Excellent
initiative that
initiative to
Invention of resulted PAN India
improve upon PAN India Senior Management Annually
the year award in improvement event
Process/
in process/
Practice
practice
To recognize the
Cost strategy that PAN India
Cost Saving PAN India Senior Management Annually
reduction , resulted in cost Event
Strategy of the
reduction
year Award
Improvement
in revenue
generation
Most Efficient
operations Strategy that
award resulted in
To recognize the
tangible
strategy that
benefits to the PAN India
PAN India resulted in Senior Management Annually
company in Event
Operations
terms of
efficiency
operational
efficiency
To recognize
practice that
Going out of
Employee has resulted in
ways to form PAN India
Engagement Improved
inclusive PAN India Senior Management Annually
practice of the productivity Event
work
year Award due to inclusive
environment
work
environment
Rewarded in event
Examples
1. Cash award to each zone on being becoming best zone/area in swachta to be INR 1500/ (
Each member may get 200 if 5 members)
2. T Shirts/Caps with Company Logo with ZED so non-monetary award for recognition
3. Certificates to each member which may be prominently displayed in their work areas or a
revolving 5s / Swachh trophy may be presented