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Business Tip of the Month

Business Tip
of the Month
For the month of July 2003

Use awards and rewards to motivate employees


Employee recognition programs are back in style. Managers are finding that recognition awards with monetary rewards can offset some of the negative morale resulting from lower employee raises and smaller bonuses that are typical in the current economic climate. Your company may want to try this simple motivational tactic; it's low in cost, with effective results.

Achievements that are most often recognized are length of service, exceptional performance, good suggestions, and safety. But be imaginative in what you choose to recognize. Perhaps recognizing something as simple as employee attendance can bring morale up to your expectations.

In developing your awards program, identify what motivates your employees. Though money is a prime motivator, some people prefer public acknowledgment of their success. The recognition program can do both, providing gift certificates or cash, while publicly giving credit to the employee. A thank you note from the company president, a prime parking spot at the office, or tickets to a local sporting or cultural event are inexpensive awards. More elaborate awards, like a week's paid vacation or dinner at an exclusive restaurant, depend on your company's culture and cash flow.

Ensure fairness and attempt to reach a wide spectrum of employees with your recognition program. If four employees and their manager developed a successful product, reward all five people. Give office and plant employees equal chance at winning awards. Maintain interest in the program by varying the reason for rewards. Ask employees for reward suggestions. You'll get a sense of what motivates them and fresh gift ideas to keep the program inspiring.

Avoid the pitfalls common in recognition programs.

1)

Don't instill excessive competition among your employees. When deciding what to recognize, level the playing field for all employees. The most effective recognition programs have different winners each time the award is presented.

2)

Don't replace daily management with a recognition program. Continue to notice your employees' hard work on a daily basis. A promise of a reward in the future cannot replace a pat on the back in the present.

The IRS does impose some limits on employee recognition programs. If you have questions regarding the tax implications of your program, contact our office.




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