Employee Recognition and Reward (ERR) Programs: the solution


Employee Recognition and Reward (ERR) Programs: the solution

  • By Ian Bradley
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Here’s a follow-up to the previous post about employee recognition.

Guideline #1 Form a Steering Committee

Strike a small committee, comprising peer-nominated shop floor employees and managers, with the mandate of designing and promoting the employee reward and recognition program or ERR program. Once created, the committee would bear the continuing management responsibility for the ERR by some surveying some of the following tasks:

* judging merits of employee contributions

* decisions about appropriate rewards

* on-going refinements to the program

Although the program initiated with management, its ongoing operation is a joint management-worker venture, thus eliminating any feeling of external coercion.

Guideline #2 Foster Individual Creativity

A key aspect of Self-Determination Theory is the role of the individual in determining his or her own behavior, self-direction versus external coercion. In the case of our ERR program, we can achieve that self-determination by maximizing the potential ways of achieving the rewards, specifically, by encouraging employee creativity. Since production gains are potentially ubiquitous, our ERR program will encourage employees to look at all aspects of the business including:

· product design

· operations

· waste reduction

· safety enhancement

employee satisfaction

Guideline #3 Procedural Justice

The operation of the ERR program should be open and straight forward with established rules so that everyone believes the rewards are fairly distributed. This is not to say that any rule could not be changed but that the process behind the change would be transparent and aligned with the overall company mission. Some of the rules would include the following:

· what type of suggestions could be submitted

· how the suggestions are submitted

· methods of determining recognition award and their timing


Guideline #4 Psychological meaning of the ERR program

An effective ERR program combines both monetary and social rewards. For either to work, they must be meaningful for the individual. The monetary rewards could be determined by company performance according to a specific profit-sharing formula. However, the importance of the social component must also be stressed since the performance-enhancement gained by company-wide recognition of an employee’s enterprising suggestion can be profound.

Here are some basic principles about the delivery and nature of some social rewards:

Timing of rewards:

-ensure that each suggestion or contribution is immediately recognized. Do not wait for the committee to meet and formally decide on the specific rewards, but establish a mechanism so that all suggestions are immediately recognized.

Personalized nature of the reward;

-personalized letters from the President or Manager are extremely effective, they can be coupled with more concrete gifts such as cups with emblazed employees name etc

Team and Family aspects:

-develop rewards that encourage teamwork, for example, lunch voucher for winning employee and two colleagues

-consider tangible rewards that can involve the worker’s family, such as trips to a local zoo or museum.

Meaning is not only important for rewards, but also for the procedures or behaviours used to obtain them. Therefore, the company should be very explicit about linking the employees’ suggestions to overall company successes. For example, if a suggestion concerning improved delivery times was recognized by the operations committee, then publicize the impact of that improvement, for instance, increased customer satisfaction ratings or decreased costs.

Guideline #5 Beginning, middle and the end

Start the ERR program with fanfare and endlessly promote it. Some companies use a common area to display winning suggestions or photographs of the employees making those winning suggestions. Regular recognition lunches or banquets can also be valuable.

Monitor the program’s operation with a suitable metric, actually many. Include financial and operational metrics, but don’t forget the subjective component. For example, ask yourself: Did the employees seem more involved, more motivated?

Finally, everything -even good things – come to an end.  Therefore, plan your ERR program to last a specific time period, announcement the program duration at the beginning so that the ERR program doesn’t die a neglected death.


Following these guidelines will enhance employee motivation by maximizing creativity and a willingness to participate.