Employees are the cornerstone of every small business in America. Everyday people contribute to the growth and success of organizations, and alternatively can also contribute to the decay and failure of a company. Sole proprietors and CEOs alike face the problem of trying to prevent the latter from happening. Better yet, business owners are proactively using awards to reinforce desired employee behavior.
There are many goals that a small business may have and by aligning business objectives with the goals of the employee award program, a variety of benefits can be achieved. For instance, if a company fills a niche in the market then awarding innovative ideas and outstanding effort might benefit them the most. Conversely, an organization that is in a highly competitive market could benefit from an employee award program that focuses on stabilizing employee retention and rewards ideas that lead to overall cost reduction. Modern employee award programs cover a variety of areas for small businesses including overall teamwork effort, perfect attendance, accident free hours, health and wellness, sales incentives and years of service programs.
According to recognition experts Adrian Gostick and Chester Elton in the book, A Carrot a Day: A daily dose of RECOGNITION for your employees, “The truth is most managers fail to regularly recognize their employees. The leaders who do have a strategic advantage over the majority of their peers and competitors. Employees fed a steady diet of carrots focus better on team or company goals. They spot new opportunities faster. They have longer employment life spans. And they can lift you and your team higher than you might have dreamed possible.”
In addition to the benefits above, a study by the International Society of Performance Improvement revealed incentive programs aimed at individuals were shown to increase performance an average of 22% and team incentives increased performance by as much as 44%. When incentive programs are first offered for completing a task, a 15% increase in performance occurs. When asked to continue toward a goal, people increased their performance by 27%.
Another great advantage of employee award programs is that they can help an organization achieve cost reductions. A study by the Incentive Research Foundation states, “Employee turnover within the U.S. fast-food and hotel industries costs those industries in the neighborhood of $140 billion annually. In more bite-sized terms, it will cost roughly 100% to 200% of an employee’s base salary to recruit and train a replacement.” It is estimated that higher levels of motivation and motivated performance translate into a 53% reduction in worker turn over.
The ROI of an employee award program can be calculated as employees reach goals, receive rewards and improve overall business results. Another advantage of award programs is that gifts are only awarded as goals are reached- ensuring unnecessary expenditure is avoided and the program always results in apositive return on investment.
There are other benefits from implementing an employee award program that cannot easily be quantified but may be just as important as the tangible benefits for small business owners. These include, but are not limited to, increases in employee morale, loyalty, customer service ratings, communication, recruiting and maintaining talent, teamwork and employee motivation. When employees feel appreciated and understand the direct correlation between their behaviors and the incentives they receive, they will more often go the extra mile for their employer. When an employee reaches this level of performance, they are motivated to truly help shape a small business and therefore provide a key competitive advantage.
Organizations not only can benefit from a well designed and properly implemented award program, but many companies attribute award programs as an expense in the advertising budget. In an effort to cut the cost of operating an employee gift program, small businesses are utilizing award providers to help develop and implement a properly designed program, administer the program, supply accurate reporting and manage gift fulfillment. This allows owners and human resource managers alike to focus on their primary jobs while resting assured that the program is achieving its purpose and producing desired results.
With the existence of no-minimum purchasing and award programs that fit any sized budget, it is no wonder that many small businesses have implemented employee recognition and incentive programs. Well designed award programs can lead to greater success and provide an incredible return on investment, as demonstrated above. Not only do employees deserve recognition for their outstanding contributions but small businesses cannot afford to pass up the advantages an employee award program has to offer.
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