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Reward and Recognition Systems

In the knowledge industry, people are the most important assets of an organization. The ability of an organization to survive depends upon its ability to attract and retain the best talent in the industry. Salary forms only one of the factors that attract and retain employees, the environment that is created in an organization is a critical factor that makes employees decide to stay back. In one of the survey’s done in India, it was observed that, when asked to introduce oneself, the majority of the participants introduced themselves as working with a certain company. The ability of the company to create such belongingness is definitely commendable. Upon closer inspection, one sees how these companies are able to instil pride in their employees.

A transparent and fair organization is an organization that employees would want to belong to. By transparent, one implies an organization where policies are well defined and the management sticks to the policies. Favouritism or nepotism has no place in such an organization. By a fair system we mean a system which recognizes and rewards high performers. Thus from an employee perception point of view rewards and recognition are of primary importance.

Every organization has a reward system. Completion of a certain years of services, entitles an employee to a long service reward that could possibly include monetary benefits and/or a holiday. However in the information age or the high speed age, people expect results in a short time, and thus it is natural for employees to expect rewards and recognitions on a regular frequency.

While reward is a mechanism where the employee has bonus money or a gift given to her, recognition system need not always involve a monetary or a tangible benefit. In modern companies, the recognition system can as well be a dinner with the chairman or president of the company. Rewards and recognition systems can be successfully employed in IT and IT enabled Services companies to boost the morale of high performers and get them to outdo themselves.

Along with individual awards, it is also necessary to give out team awards to a high-performing team. Such rewards create a healthy competition between the teams within an organization. For instance, if an award institutionalized for significant business growth is won by a certain team in a quarter, it would motivate the other teams to perform better and earn the reward for themselves for the next quarter. In this equation, all the players benefit. The employees and team benefit by outperforming themselves and the company benefits from a highly charged team.

Recognition systems unlike awards can be of a more informal nature also. For example, if an employee puts in extra efforts to help a colleague finish her job, a small gesture of thanks by the manager would have a far reaching impact on the way the employee perceives the organization. Such recognition systems should not be restricted such that only a manager can give the reward or recognition. Instead, the effectiveness of the system increases multi-fold if the employees can recognize and reward their peers and even their boss. A rewards and recognition system thus implemented organization wide, go a long way in creating a bonding between the employee and the organization.

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