How to realign incentive and recognition initiatives as broader strategies shift
The business landscape will evolve as policy and economics shift. Today, the increase in the National Minimum Wage and employer’s National Insurance contributions (NIC) has led to low confidence in taking on new hires. Redundancies are at a four-year high since the pandemic, and the median pay increase in January was 1.5% less than in previous years. That’s not all.
Many industries are facing skills gaps, and the adoption of AI is transforming how businesses operate.
When businesses evolve, so must the people strategy since employees will be both affected by and pivotal to a successful transformation programme.
The role of incentive and recognition
The role of recognition strategies in motivating and engaging employees during business transformation is essential.
Before considering realigning your reward and recognition strategy, you must first assess the effectiveness of your current initiative. Is it fit for purpose? What changes will you need to implement to ensure it will align with shifting business strategies?
To answer this, it’s essential to view these changes through a people-centric lens. Fundamentally, you need to answer two questions: What will you need from your employees to make your business strategy a success, and how will the changes impact your workforce?
One of these questions reflects business needs, and the other encourages you to approach business goals with employee wellbeing at the core of the shift.
Connecting incentives to evolving strategic priorities
The traditional incentive and recognition model was very focused on results. You hit a sales target, you get a cash bonus, so you’re driven to achieve.
Using the current climate as an example, many businesses have adopted the strategy of restructuring and reducing headcount to mitigate rising business costs. Streamlining processes can yield positive business results, but when it leads to headcount reduction, it will leave a mark on those who remain who may feel less secure in their roles and concerned for their futures. They may potentially have grievances about how the process was handled.
Incentives and recognition play a role in employee retention, and during times of streamlining business practises, retaining critical skills is vital.
In this case, your incentive and recognition initiative becomes less about financial recompense and more about investing in an employee’s future.
When you fund an employee’s development through an upskilling initiative, you communicate their value to the future of the business, increasing their loyalty and securing the skills needed for your future business goals. Additionally, a values-based approach to employee recognition helps encourage and reinforce the behaviours you need your employees to adopt to support your shifting priorities.
One example could be moving from traditional individual target-driven incentives to ones where teamwork and collaboration hold more value.
A cultural shift
Business transformation inevitably leads to a cultural shift, and your incentive and recognition strategy will play a crucial role in driving its success. Whether it involves cost-cutting or a growth strategy, no business case is complete without a statement on the expected return on investment (ROI).
Numbers matter if you’re going to get business buy-in, so it’s vital to present the tangible ROI that recognition delivers, including improving employee retention, reducing absenteeism, increasing engagement and, as a result, productivity.
To create a successful partnership between shifting business and people strategies with recognition, there are four fundamental steps to follow:
- Create a blueprint of your business strategy.
- Overlay that with potential negative impacts on people.
- Define the skills needed to achieve business goals.
- Use data to determine how recognition will help alleviate the people impact and retain critical talent.
Supplied by REBA Associate Member, Pluxee UK
Pluxee UK, is a leading employee benefits and engagement partner that opens up a world of opportunities to help people enjoy more of what really matters in their lives.
