How to reward and recognise employee performance

How to reward and recognise employee performance

by | Jan 10, 2023 | ConsultingHQ Blog, Performance Management, Reward & Recognition

Employee Performance: How To Conduct Performance Reviews

How to reward and recognise employee performance

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Inspire employee motivation with annual performance reviews

Everyone likes to feel valued, and that their work is recognised – and that’s why employee performance reviews are so important. To this end, each person in your team should be very clear about his or her individual performance goals, so they know what’s expected of them.

Regular communication during the year should reduce or eliminate misunderstandings on expectations.  Rewarding employees is key to their future motivation, engagement and performance.  Most people try hard to achieve. How you go about evaluating employee performance will have a major impact on how engaged in your business employees will be for the remainder of the year – often to a greater degree than any monetary reward.

Universal common factors in setting you and your staff up for success through performance appraisals are:

  • People you employee need to feel valued, which means you must focus on the positives.
  • Communication must be crystal clear on what measures the achievement.
  • Where improvement is required, feedback must be positive and constructive.

The Performance Review is the time to celebrate successes, evaluate blocks & obstacles encountered and build training programmes to elevate future successes to a new level.  

Your employees should know exactly what to expect from you in terms of the employment review process. They will have a view on how much progress they made toward their goal and will need the opportunity to express this.

The three most important things you should include in a Performance Review

  • Achievements for the employee during the year need to be discussed and credit given for all achievements. Always start with positives and remember your employee may be feeling anxious. Positive feedback at the outset will help relax him or her.
  • Areas where full achievement was not reached but progress was made – review any restricting factors or blocks that the employee encountered. It is your job as the business owner to remove all roadblocks hindering success. Sometimes constructive feedback may be required in terms of results but often additional support is also required for the employee.
  • Future training and development plans. All employees must have a training and development plan resultant from the Performance Review.

A lot of an employee’s performance relies on you or Managers in your business performing their jobs well in providing resources and removing road blocks.

It is important you are open to all aspects of performance hindrance and look for positive solutions. The most common reason behind lack of performance tends to be lack of training or confidence.

Moving forward from the conducting of the Performance Review itself, remember the goal is to have a working plan for the year ahead that both you and your employee are engaged in and committed to.

Writing clear and specific goals with defined outcomes is your goal, inclusive of improvement in areas where performance was less than expected plus a training and development programme to overcome any confidence or skill based restrictions on performance.

The Employee that you invest time and training in will be the employee who stays with your business and adds increasing value year after year. Performance Reviews when conducted with a positive spirit and an open mind will result in engaged employees who know where their immediate and long term focus lies – and that you value them as part of your business vision for the future.

Are there any tools that can help with employee performance reviews?

One of the major challenges around employee performance reviews is that it’s all too easy to forget about them, or keep pushing them out, because there’s something more urgent going on in your business.

However, if you keep postponing, your staff are likely to feel that they’re not valued, and over time their performance could slide – or they may seek employment elsewhere. So getting performance (and pay) reviews completed on time is critical.

That’s where the People Management Toolkit in  EMS Hub, our HRIS software, can help you. It has everything you need for performance evaluations:The People Management Toolkit is an all-in-one solution for employee performance reviews, including:
EMS-hub
  • Annual performance reviews
  • Employee self reviews
  • Manager reviews
  • End of year scoring
  • Goal setting
  • KPIs
  • Action plans.

Tasks can be automated and delegated, with reminders set for HR, managers, and employees, so that the reviews are timely. Plus built-in reporting tools let you check on the completion rate of your employee performance reviews. What’s more, you can run departmental and organisational rating reports, giving you solid data for decision making like never before.

That’s just a small snapshot of what the People Management Toolkit can do…

The People Management Toolkit can also help you with staff training records, learning management, skills matrix development, managing 90-day trials, employee pulse checks, and more.

Next step

If you need hands-on help with employee performance reviews – or would like a software demo – please book a time with us to meet online to see how we can help you.

Contact us to find out how we can help your business.

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Salary reviews 2021

Salary reviews 2021

by | Jul 13, 2021 | ConsultingHQ Blog, Performance Management, Reward & Recognition

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Start planning for salary reviews now!

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June 2021 economic data indicates that the New Zealand and Australian economies are performing at least as well as pre-pandemic levels, and far better than expected.

The better-than-forecast figures can be largely attributed to both countries keeping Covid-19 in check as well as the large and timely monetary and fiscal stimulus from the Government. As a result, both countries have been able to reopen their domestic economies before other advanced nations, boosting employment and consumer spending.

Newshub reports that Australian recruiters are traveling to New Zealand to poach Kiwi employees, and due to skill shortages in Australia, are offering salaries that are double on present earnings in some cases.

It seems Aussie firms are willing to pay high salaries to fill their labour shortages and it is not just lawyers and other professionals they want – they are reportedly also targeting people with skills in other industries e.g. construction and engineering.

With this in mind, to retain skilled employees employers need to start planning for salary reviews earlier than usual.

According to the Hays Salary Guide FY21/22 while 50% of employers surveyed kept salaries steady in 2020, 67% were planning to increase salaries in their next review, with 12% expecting to award increases of 3% or more. But, 67% of employees who were surveyed said they thought a raise of 3% or more would better reflect their, individual performance, so, there is quite a considerable difference in expectations between employee and their managers who were surveyed. Employers will need to carefully manage expectations if they wish to attract and retain employees in the current skills short market.

How frequently should salary reviews be carried out?

Because of the fast-changing environment in which businesses are operating today, employers would be wise to consider carrying out twice-yearly salary reviews to make sure salaries remain competitive with the market, as well as keeping up with internal changes.

Although a salary review does not always result in an increase, it does ensure that the business keeps up to date with its competitors and that employees remain motivated because they know they are being fairly compensated. Conducting a regular, structured salary review for all positions ensures that employees are appropriately paid and understand the logic and opportunity of the wage range assigned to their position. It also gives the employer the opportunity to adjust for changes in responsibility or duties that should be reflected in a salary change, as well as making adjustments for external factors such as changes in the cost of living or changes in industry standards.

Currently, disruptions to markets from Covid-19 are far from over and salary budgets remain tight. Therefore, it remains as important as ever for employers to ensure they are paying the right amount, which can be achieved by knowing what jobs are worth in the (external) job market, as well as the value internally. Although many employers kept salaries steady in 2020, some had to reduce salaries and hours, and these cases should be revisited as soon as possible.

In terms of external comparison, salary benchmarking is a process by which you match internal jobs and their descriptions to similar jobs and descriptions in a salary survey or other source of market pay data, so that you can identify a range that the market is paying for each position. Below are some examples of when a company may benefit from this information:

  • To provide data for the regular salary review process
  • An individual has been promoted into a newly created role or transferred
  • Ensuring top performers are satisfied with their remuneration and not a potential flight risk
  • A merger or company sale/acquisition has taken place
  • A restructure
  • Pay equity checks
  • Hot skills/geographic pay differentials

What other factors should be considered when carrying out salary reviews?

  • Remuneration strategies must be aligned with your organisational culture e.g. if you talk about the importance of being a team player and of achieving quality standards, but you assess performance based only on individual quantitative results, you can’t expect the remuneration to support these goals.
  • Total rewards – don’t forget that people are motivated by more than money and that rewards from work include both tangible (monetary) rewards as well as intangible (nonmonetary) rewards such as training, career development opportunities, work culture, flexible working hours and a biggie is recognition.
  • NZ minimum wage – are you aware there are three different types of minimum wage rates i.e., adult, starting out and training? And do you know when a person on the starting out wage or training wage needs to progress to the adult minimum wage? These rates can be found on Employment New Zealand’s website.

There are no silver bullets for a successful compensation programme, however at ConsultingHQ we believe that the key to a successful programme doesn’t have to be complicated and is more about making sure that it fits with your company’s business strategy and work culture and makes sense to your people.

We can assist you with all remuneration related matters e.g. the review process, job descriptions (so that you can get an accurate analysis of market comparison data), review spreadsheet templates, incentive plan structures, and advice on some of those tricky compensation challenges, such as:

  • You have high-performing employees who are currently paid above the market. You would like to give them an increase, but you are aware that you should slow down their pay increases.
  • How do you manage this situation without demotivating them?
  • You only have a small percentage salary review budget this year, say 2%, how can you differentiate pay and performance with such a small budget?
  • A team member has given me salary data from a recruiter or the internet that suggests they are underpaid – how do I manage this?
  • We are currently recruiting and find that candidates are asking for a higher level of pay than people who are proven performers in the same job are getting – what should we do about this?

Contact us to find out how we can help your business.

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Intrinsic and extrinsic employee rewards

Intrinsic and extrinsic employee rewards

by | May 3, 2021 | ConsultingHQ Blog, Performance Management, Reward & Recognition

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Extrinsic and intrinsic rewards – and how they affect employee Engagement

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Do you know what rewards motivate your employees and make them want to not only remain employed in your business – but to inspire them to achieve higher levels of customer satisfaction and excellence?

Of course, this is not a simple or easy question to answer – as your workforce will be made up of an extremely diverse group of people who have differing wants and needs and discovering and instilling that one undiscovered factor that will excite and motivate each person to get to work and perform to their potential can often feel like a type of magic that you do not have the spell or wand for.

What role do rewards play in influencing employee engagement and motivation?

There are numerous surveys and studies that have looked at the question of why people work. It is too easy to say money as we all know money is not the main reason people spend most of their waking hours furthering the aims of their employing entity. However, we do know that people want to find meaning in the work they do and want to see opportunities for personal and professional growth and development. They also want to be satisfied that they are being rewarded fairly and that their rewards are aligned with the organisational culture.

This discussion looks at two primary categories for rewards and recognition and their impact on employee engagement and motivation.
Extrinsic rewards are usually financial or tangible rewards given to employees, such as pay increases, bonuses, and benefits. They are rewards to which an objective dollar value can be assigned. They are extrinsic because they are external to completing the work itself and are controlled by people other than the employee.

Extrinsic rewards usually have a limited impact over time if they are not increased. Therefore, when they are used to increase employee engagement or motivation the effects can be short-lived for most people.

Intrinsic rewards (or intangible rewards) are psychological rewards that employees get from doing meaningful work and performing it well

They are intrinsic because they are internal to the work being done and achieving them largely depends on the employee’s own efforts. They are essential to sustained behaviour change and can be created by allowing employees to do more self-managing and adding value to their work by innovating, problem-solving and improvising. When someone achieves an intrinsic reward, there is a positive emotional reaction.

Is the power of intrinsic rewards under rated?

Given intrinsic rewards or intangible rewards are the reasons employees choose to work at a particular place of employment over another when both employers offer the same tangible rewards, indeed intrinsic rewards are critically important to the business’s ability to attract, retain and motivate employees. It is a mistake to view them as incidental.

What intrinsic rewards can we provide to our employees?

There are a multitude of ways your business can establish, promote and foster intrinsic rewards:

  • Autonomy – employees want more autonomy, so allow them to take responsibility for their job and tasks and ditch that micromanagement approach. Empowered employees will take ownership and pride in their work and see to it that projects are completed to a higher level of excellence.
  • Let them make a difference – people want to make a difference, therefore develop an authentic culture of purpose that your employees can believe in. Encourage your people to find meaning in the work they do and show them the good that came of their specific efforts and accomplishments.
  • Promote social interaction – employees want to connect with their colleagues and with other teams. Encourage them to take a break and take them out of the work environment to do something fun together so that they can connect, interact, get to know and understand each other.
  • Provide opportunities for advancement – employees want to progress and achieve. Human beings – not just employees – do more and produce better work when they are making progress on something they care about. So, when trying to motivate employees, be clear about how their work is developing their career path and let them stretch themselves and demonstrate their skill set. Of course, through it all, be sure to recognise their efforts and achievements.
  • Invest in your employee’s learning, development and well-being – employees are increasingly responsible for managing their own careers and they know that their futures depend on improving their skills. If they are not expanding their capabilities, they risk compromising their employability – there is no standing still in this world. Accordingly, opportunities for growth and development are the most consistent predictors of employee commitment. Through coaching and regular feedback, managers can help employees identify development needs and enhance their skills.
  • Sharing company information – by entrusting employees with vital information about the organisation’s financial and operational health, business leaders send a message that they consider every worker to be a valued partner and stakeholder in their enterprises. Research shows employees who believe they are trusted by their managers can better see the bigger picture and tend to be more loyal and productive, or in other words, more engaged.
  • Provide recognition – numerous studies conducted over time have suggested that non-monetary rewards and recognition can be much more effective motivators than cash. Surprisingly, many employee surveys have suggested that too few organisations take advantage of the motivational power of non-monetary rewards. It is not that money does not matter – if employees feel that they are significantly underpaid – that their pay does not reflect their contributions to the organisation, their motivation is likely to suffer. But when it comes to encouraging employees to put in discretionary effort into their work and to deliver superior performance, the chance to make a difference and be recognised for it is likely to provide a very strong incentive. Employee efforts that get recognised also get repeated.

Finally, while we will never say that keeping employees engaged and committed to your initiatives is easy – especially in today’s distracted workplace – you can certainly turn things around, pick up the momentum, and sustain a healthy, flourishing, engaged culture by tapping into your population’s intrinsic motivators.

Contact us to find out how we can help your business.

Contact us