The way we work today is different than even five years ago. And since modern workplaces are about agile teams and human connections, it’s only natural that how we get paid reflects this.
I’m referring to variable pay – what employees often receive as some type of bonus, typically annually. What if there was an approach that drove continuous employee engagement by harnessing connections driven by the work we do every day? Because in this job seeker’s market, retention is key, and what better way to keep talent than by motivating them all year through gratitude and shared purpose?
Forward-thinking companies recognize that traditional total rewards – grounded in base pay and annual bonus – may not be enough. Josh Bersin, founder of Bersin™ by Deloitte and one of the world’s leading HR and workplace analysts, spoke with us last year in a two-part Q&A, and said, “Roughly 10 to 15 percent of companies are reviewing pay quarterly now. Given the pace of business … there is really no excuse to wait until the end of a fiscal year to reward employees.”
He’s also an advocate for crowdsourced feedback as part of a more rounded review process. “I believe this ‘social feedback’ or ‘peer feedback’ is immensely valuable today because it speaks to the issue of your reputation at work and your willingness to help others. People should be rewarded for their contribution to others, not only for hitting their own targets.”
Crowdsourced feedback lends itself to rethinking variable pay, and, when coupled with a social recognition component, can truly lift culture all while being more in line with how work actually gets done.
What does this look like in action?
Let’s say at the start of the year, you give your employees a bonus. Research from University of Toronto Rotman School of Management and Evolv, Inc says this type of pay action gives employees a 1- to 4-week lift in engagement. After that amount of time, and regardless of the size of that one-time reward, it’s like it never happened.
Now, what if you were to take that larger amount, split it up into smaller figures, then disperse it among your employees to reward each other throughout the year with micro-bonuses that also aligned with your company values? That way, you’d have a continuous 1- to 4-week lift among employees and you’d be building a culture of trust and positivity at the same time.
In fact, according to the Workhuman® Analytics & Research Institute, on average, an annual rate of 7-10 recognition moments is correlated with 2x lower chances of voluntary turnover.
How is it working for leading companies?
In 2015, LinkedIn wanted a rewards program that could drive stability and modernize a spot bonus program that wasn’t driving results.
After partnering with Workhuman, LinkedIn now has a 96 percent retention rate for employees who receive four or more awards through Bravo!, the company’s global, peer-to-peer recognition and rewards program. For new hires, retention rates are nearly 10 percentage points greater for employees who receive four or more awards. Unlike the former spot bonus program, Bravo! has clear ties to LinkedIn’s corporate values and is efficient, consistent, and timely. Check out the case study for more of the LinkedIn story.
Another company that’s leading in this space is Hershey. Before partnering with Workhuman, Hershey saw a dip in satisfaction with their recognition and rewards program, illuminating that disparate cash reward programs were limited in scope and created an inconsistent employee experience across the company.
Hershey’s SMILES program was created with the idea of strengthening the company’s four core values: open to possibilities, growing together, making a difference, and one Hershey. In the first two years of SMILES, more than 100,000 recognition moments were delivered, with 81 percent country-to-country recognition, and an 11 percent increase in satisfaction. See more of Hershey’s sweet success.
You can see better retention, increased loyalty, and higher performance from your people just by looking at pay in a different, more modern, more human way. Feeling appreciated, connected, and like we belong are intrinsic human needs in life and at work.
That’s what working human is all about: building cultures rooted in positivity where every worker feels empowered for who they are and what they do. We no longer have to wait for the future of work to happen. We can create it, together.
About the AuthorMore Content by Derek Irvine