Employee engagement is the lifeblood of any enterprise. Key to a workforce brimming with enthusiasm, drive and first-rate performance is an effective, workable reward structure.
Today, employee motivation is as important a business priority as ever. As a stuttering global economy looms large, pressures are filtering down from the business to the employee. Set against this backdrop, it is crucial that workforces are committed and driven, feel valued and wanted.
A 2012 white paper by Asia Pacific research firm Insync for example, Boosting the Productivity of Australian Manufacturers, stated there is "abundant evidence" that employees who are aligned and engaged will make the difference between success and failure in tough times.
The Power of Non-Cash Rewards
The adage is that cash is king, but research suggests this is no longer the case. Incentive and recognition systems are not effective when companies use cash as their main driver.
For example, the Aberdeen Group's 2012 Sales Performance Management Study showed that best-in-class organisations – those that better their peers across all major financial categories – are more than twice as likely as all other firms to provide non-cash incentives, with 21 percent of the best-in-class organisations using them compared to just ten percent of all other Companies.
But they can also work together. The Effect of Tangible and Intangible Noncash Rewards on Performance and Satisfaction in a Production Setting, a 2012 research paper by Management Accounting Quarterly, suggests that employers would benefit by having a non-cash reward system in place when they already have a cash bonus system.
The paper said cash and non-cash bonus incentives can dovetail because cash incentives can "deteriorate performance" while non-cash incentives can help mitigate such negative effects.
"Our results demonstrate that research into the conditions under which the benefits of non-cash incentives are greater than the costs to the firm employing them has the potential to contribute to both managerial accounting research and practice."
"This research provides evidence that such incentives effect production task
performance and attractiveness."
So, how do companies use rewards in the real world? Singapore events company Neoedge uses Corporate Card reward points to redeem vouchers, using them for monthly staff awards and employee events, with the potential to save the company $3,000 a year on incentive spending.
"The membership points are very helpful because [Card_Members] can redeem vouchers for our employees. We have incentives and awards for our employees for best performance so by redeeming our points we are able to get some very good shopping deals, so that we can award them to employees who are performing," explained Daniel Lau, Senior Corporate Learning Specialist at the company.
Developing the Right Reward Approach
However, it is not enough to say that a reward program should focus only on non-cash items. An effective benefit program is one that takes a bespoke approach, understanding the needs of the workforce and also attracting new talent.
Towers Watson's HR Service Delivery Survey 2011 found the right mix of benefits can be a "critical component" in successful long-term plans for keeping employees and tempting new ones.
Offering benefits are a way for employers to secure a competitive advantage in an ever-challenging environment.
This means undertaking a full review of all employee benefits – from top-level initiatives like retirement and pension options, healthcare and holiday – to things like worker initiatives and long-service awards.
Corporate Card Benefits - Keeping Employees Informed
There are challenges to harnessing a Corporate Card solution for employee rewards. Staff can be resistant to change, so effective communication is key.
For Lynn Larson, CPCP, Manager of Education, NAPCP, employees should be educated about the benefits of a Corporate Card initiative and how it supports internal goals.
"Post-implementation, continue to utilise a well-rounded communications plan that makes employees feel valued and keeps them engaged," she said. "For example, focus on goal-setting and progress toward previously established goals."
It is important to review employee reward systems to make sure they are still effective.
Firms can run workshops or distribute communications that explain to employees how they can get the most out of their Corporate Card. "Depending on the size of the rollout, a company can also work with American Express® Corporate Payments teams to establish roadshows, answer FAQs and encourage take-up rate for corporate cards," according to Daniel Dua, an American Express Client Manager.