Employee Recognition Programs for modern workplaces are more of an art form than a science, closely tied to a company’s ethos and culture. HR needs to ensure a meaningful R&R framework that aligns with cultural values and extends beyond induction to the entire employee journey. Modern workplace employee recognition must continually innovate, analyze data, and track past successes to excel.
In an interaction with Advantage Club, Jacob Jacob, Group Chief Human Resources Officer, Malabar Group, shared the significance of reward and recognition and his expectations from this segment in 2024. He also highlighted how organizations can redefine total rewards in the modern workplace. Read the edited Q&A excerpts below.
Could you share your assessment of the employee experience and rewards and recognition segment over the last couple of years? What were some of the notable changes you have witnessed?
HR needs to ensure that employees have a meaningful experience with the organization. It’s different from what is done to make them feel comfortable as part of the induction, but the entire journey from when the employee decided to associate with the company to what the company is doing regarding the unique experience, culture, values, etc. So then employees can make an appropriate choice whether to join this company or not.
Gone are the days when you looked at employee experience only from when you selected the candidate. It shouldn’t be like the candidates are getting the revenue for the company, so take care of them. Currently, I think people have the right to choose a company far more than the company has the right to select them. Because of this, there’s a tremendous change and paradigm shift in how employee experience has been moving forward, especially post-COVID.
Given that everybody is looking at sustaining what they’ve done so far and organizations are looking at retaining, the war for talent is among the highest today in terms of priorities, and that’s why retention is the new recruitment.
Rewards and recognition have also taken a dimensional shift from yearly and best salesperson rewards. You have many reward and recognition initiatives and companies, from a long service to a new initiative or an innovative idea that the employee has presented. Today, most employees look at instant gratification and do not wait for the quarter. If somebody has done something, recognize them in that month. R&R should be more custom-made, and it has reached that level of customization.
What are the significant factors that will influence employee recognition in 2024?
The year 2024 will continue the momentum that has been set in 2023. But more importantly, we will see many more rewards and recognition programs for different workforce categories, such as manufacturing, designers, front end, or supply chain. Customization will be essential in the reward and recognition category and even in what companies do. Long service or milestone achievement awards will not be the most important factor in the reward and recognition category. Instant gratification will gain importance, employees value add to the company, and how the company rewards the employees will matter most for the extraordinary effort or something they have done.
It’s been found that only 52.6% of companies have employee recognition programs. Should organizations prioritize R & R for culture building and employee retention?
Reward and recognition are not science; they’re more an art, and art has much to do with the company’s ethos and culture. So it’s a philosophy of what are you recognising people for. The R&R should echo the cultural sentiment and values the company promulgates. On that basis is how the R&R program, the foundation of that, should be defined. For example, it gives somebody a 10-gram gold coin for completing five years of service. That’s not R&R; it’s the recognition aspect linked to the company’s culture, philosophy, and values.
For example, when we do long-term service awards in Malabar, we ensure the person is felicitated in front of all the employees and the management. More than ten grams of gold is about being recognized, sharing achievements and contributions, and adding value to the company. It’s more about building the cultural and emotional connection of the employee with the organization. So, companies must get the fundamental equation right if they want to make a huge difference and want R&R to succeed.
How can organizations redefine total rewards in the modern workplace?
Companies look to reward recognition as an employee engagement framework. Rewarding someone for a decade-long service, educational qualification, or completing any particular project is at the lower end of the spectrum of rewards. What matters is, do you have a buffet of R&R services in your organization to cater to different interventions and employees?
Today, most of the workforce has a maximum number of employees between the ages of 23 and 25. These Gen Z employees look at rewards and recognitions differently from the older generations. R & R programs should act as a catalyst for them and enable them to pursue their dreams and aspirations in the company. Like any other more significant initiative, HR today plays a huge role in the ethos of the cultural fabric. Multiple R&R programs will act as a motivator, ensuring the workforce performs better and gives results.
What’s an appropriate amount for companies to spend on employee recognition per employee annually, considering their overall strategy and fairness for all employees?
A mature company should keep at least anything within 5% to 10% of an employee’s take-home pay towards the R&R initiatives. For example, if an employee gets 20 lakhs a year, the company should keep aside anything between 5% to 10% of that 20 lakhs as the R&R budget, which will only work.
There has to be an R&R team that constantly innovates, analyzes data, and keeps a tab on what worked in the past. If you do some data analytics with the R&E, come up with a well-oiled machine as an initiative to take the company forward.
