At this time of year it’s tough going for most employees. By now they are budgeting, planning and servicing their clients who are doing the same and scrambling to earn as many sales as they can as the financial year quickly comes to a close. It’s a stressful time.
End of financial year is a time to reflect back on the year that was. What you’ve done well, what mistakes you’ve made, the hires, the fires, the dramas and chaos, the highest of highs and lowest of lows.
Whatever you’re feeling your employees are feeling it too.
How are you going to recognise your employees who have made it through another year?
Whether times are tough in your business or you’re growing in leaps and bounds, it’s important to let them know you’ve noticed but it’s easy to confuse a ‘reward’ with ‘recognition’.
It’s fairly common at this time of year for most CEOs and People Managers to look at their budgets and promised end of year bonuses, which are often considered ‘recognition’ for an employee’s good performance. But cash rewards aren’t always a motivator.
Today in business, employee’s now see a competitive salary, cash bonuses, share options, even paid maternity/paternity leave as an entitlement, not necessarily as a form of recognition for their performance. And in some cases it may just depend on how good they can negotiate rather than how good they actually perform.
It’s also difficult to quantify individually. When rewarding purely with financial incentives sometimes there’s a cross-fire, for example you might reward a particular employee for their efforts closing a deal but what about the employee who acquired the lead and the employee’s who put the deal together? You might be making one employee happy and immediately upsetting others, not ideal friction you really need in your business.
Recognition is and should be emotional; it’s about the genuine gratitude shown to your employees for their behaviour and attitude. It’s for employees that go above and beyond for you; those that mentor other struggling employees or invest themselves emotionally to the success of your company.
Christine M Riordan wrote in the Harvard Business Review how companies can foster a culture of gratitude and that recognition means much more than gratitude alone. Recognition is about shared values and a shared sense of purpose that should be celebrated: “In every workplace and on every team, all people have the innate desire to feel appreciated and valued by others.”
By recognising your employees, they instantly feel appreciated, then motivated, then perform better, then get better results. Simple really.
So what’s better than cash?
Paid Time Off – Some companies adopt paid time off so that employees can volunteer for charities of their choice or in some cases take additional time off during school holidays to spend with their families. Whilst this is not a tangible gift, it’s a very personal one allowing employees to spend ‘your time’ doing things they want to do.
In small business this may not be an option, you may only have so many hands to fill so many roles so maybe this type of recognition should be available to the one’s that really deserve it.
Employee Gifts – One of our regular clients purchases our gift boxes for new starters. Now I don’t know about you, but if I received a gift like this on the first day of a new job, I’d be feeling pretty motivated and off to a flying start.
This client shows that they appreciate their employees before their names have been printed on their business cards. It’s powerful.
If you think buying everyone Gold Class vouchers is going to do the trick you could be wasting your money. According to Tim Houlihan of BI Worldwide: “The best gifts are luxurious and meaningful – something we’d love to have but wouldn’t buy ourselves.”
For employee gifts to be effective they need to be personal. Whether it’s time off volunteering for the RSPCA or a personalised gift with a handwritten note. Showing your employees you have put some thought into the gift of recognition goes a long way.
And as a side note the best thing about non-cash / non-entertainment gifts – they are a tax deduction. Gifts under $300 given to employees, irregularly and not for reward, fall under the minor benefits exemption which means no FBT.
So when you’re getting the cheque book out this EOFY ask yourself What’s my objective? What am I trying to achieve?
If it’s boosting your company culture, reinforcing positive behaviour and motivating your employees you may need to rethink your strategy.