Is your tenure-based reward program working?

tenure rewardsThe short answer? No.

Research has found that ‘tenure-based rewards systems have virtually no impact on organisational performance.’ However, 87% of organisations’ programs are designed to recognise service milestones rather than a job well done. And worse still, only 58% of employees are aware these programs even exist within their workplace.

So aside from remaining ‘hidden’, why aren’t length of service programs enough anymore?

They’re so last year.
Tenure-based rewards were the norm 4 decades ago, but times have changed. A certificate every 5 years for going the distance just doesn’t cut it for today’s employee. Your Gen X and Y workers, who make up nearly half of the workforce, expect recognition and rewards based on job performance and results-based achievements. Honour more than just years of service and align your reward activities to a set of core values; not only will your employees thank you for it – you can measure the impact on your bottom line.

People aren’t staying at their jobs long enough.
Chances are most of your employees won’t reach many service milestones within your business. Having 2 or more jobs in a 5 year period might have once labeled you a ‘flight risk’, but today it’s not outside the standard. Currently, the average tenure in Australia is just 4 years and this is only set to decrease by 2020. Of course, there are a multitude of factors as to why people aren’t as loyal to their employer as they once were. But research suggests the number one reason people leave their jobs is lack of appreciation. Need we say more?

They don’t fulfill the needs of your people.
It’s no wonder that over 60% of Australians display signs of disengagement, when the majority of employees report that in a given year they are recognised once or not at all. Tenure based programs aren’t enough to keep your people interested, much less engaged – as they fail to meet our inherent human need ‘to feel appreciated and belong.’ Give your employees what they’re asking for, and discover real value from your rewards program by utilising it to recognise specific achievements in the moment.

In contrast to a tenure-based solution, re-engineered recognition programs provide a huge payback for businesses; including increased employee engagement, satisfaction and lower voluntary turnover.

It’s time to change your approach. We all know the age old saying from Albert Einstein, who had a handy track record of moving with the times – “the height of insanity is doing the same thing and expecting a different result.”

 

Sources: Forbes (Online), ‘New Research unlocks the secret of employee recognition’, High-Impact Performance Management: Maximizing Performance Coaching, Bersin & Associates / Stacia Sherman Garr, McCrindle Research – ‘Australia in 2020’, Perks, The Science of Motivation, T&D Magazine, U.S. Department of Labour, Quote from Albert Einstein

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