Rewards and Recognition Programs aren't just for large corporations - small and medium enterprises can also massively benefit from them too.
Owning an SME is hard. Cash often doesn't flow as easily as in a larger organisation, and sometimes you have to settle for the essentials over the nice-to-haves. However, this doesn't mean you should throw out all notion of introducing an employee Rewards and Recognition Program at your SME.
Profit and employee happiness go hand-in-hand
It's all too easy to see profit and employee happiness as opposites. After all, if cash flow is tight and you want to make profits, how can you also spend money on rewarding employees?
Turns out it's not that simple - rewards and recognition schemes have proven effects on employees' productivity, and ultimately your company's bottom line.
A survey by the Society for Human Resource Management found that companies with recognition programs in place see, on average:
- A 63 per cent increase in employee productivity.
- Increased profits of up to 58 per cent.
- A 51 per cent increase in employee retention.
So, it's not just a case of money spent on employee recognition and rewards means less profit in the long term. In fact, with a well thought-out program, you could expect to see a significant increase in earnings.
So when should you introduce a recognition program at your SME?
Don't rush into it!
One of the biggest mistakes an SME can make is to not properly plan out their rewards program - this is how you'll end up losing money instead of making profits. But it's easy to avoid as long as you set some time aside to really consider what you want from your program.
One of the biggest mistakes an SME can make is to not properly plan out their rewards program.
First things first, create a solid plan for how much return on investment (ROI) you expect to see. This will give you a good benchmark for reviewing your program moving forward to see if you are on track. If you aren't hitting the ROI you expect, you can adjust the program accordingly.
Also consider the other things you want from your program. For example, you may not just want to focus on profit, and instead incentivise things like completing certain training sessions. Once you've worked out exactly what behaviours you want to reward, you'll be in a much better position to create a successful recognition program.
Make sure you're in a position to reward quickly
Another reason recognition programs fail is that employees don't receive their rewards quickly enough. They then forget the behaviour they are being rewarded for, and also start to see the program in a negative light because they're waiting so long to receive their prize. So make sure you're in a position where you can afford to reward your employees quickly - ideally within a few days of them performing the desired behaviour.
Carefully consider what prizes you want to offer
You don't need to spend heaps on prizes to make your employees feel recognised. What you do need to offer, however, is choice - not all employees are the same, and therefore they won't be very appreciative if everyone receives the same prize.
Also remember that cash isn't an overly-effective reward. Consider if you gave your employee $20 in cash. They would be a lot happier if you spent $20 taking them out to lunch, and they'd remember that a lot better.
Rewards and Recognition Programs with Power2Motivate
Power2Motivate has years of experience creating successful Rewards and Recognition Programs in businesses of all sizes. Our extensive global online rewards gallery gives employees access to thousands of different prizes, and you can easily track ROI and other reporting metrics to see how your program is performing. For more information, contact us today or request a demo.