Using Non-Financial Rewards to Improve Retention and Engagement
Presented at 13th Annual Strategic Remuneration Conference - April 2010.
(Please download paper at the bottom of the article to view PDF version with images.)
Numerous studies have shown that
what we get paid every fortnight rates only mid-table of reasons given for
leaving one job and moving to another.
The research generally shows that
the person’s relationship with their manager, lack of growth opportunities and
non-stimulating, bland workplace culture are the main reasons why people choose
“to move on”. The link between an open, positive, fun work environment and an
engaged productive workplace culture is undeniable.
Up until 2007, it could be said that
Tranzqual fitted the model of hierarchical management. It worked from what
could be called a “central command and control system of operating”. In mid
2007 a new CEO was appointed and he embarked on putting a new management
structure in place. A key strategic goal for the senior management team was to
change the workplace culture.
This presentation looks at some of
the things outside of ‘pay’ that Tranzqual has done over the past 2-3 years to
bring about a transformation in our culture.
Benefits and Drawbacks
your pay was something you could hold, even smell, the direct link between
providing your time and labour and the reward for doing so was quite obvious.
Now with electronic banking pay is a lot less tangible. By default it seems to
be what is left in your account after mortgage, rent, utilities costs and
numerous other direct credits and automatic payments have eroded it away.
The benefit of non-financial rewards
is that they can bring back that tangible link. They often work more at a
feeling level so people often experience a sense of “feeling valued” because of
the feeling the reward engenders. This is somewhat different from the feeling
you get when you log in to on-line banking to check your balance after pay day.
There can be drawbacks with
non-financial rewards especially where given to an individual or one business
group is singled out over others. The fear is how will this be seen by others?
Will it create jealousy and disharmony? Trying to avoid this by rewarding in
secret is not a good idea. First, “the grapevine will usually always produce
fruit”. Secondly, an organisation should never be afraid of holding up the high
performance of others as an example of what is achievable. The key is being
able to articulate what the reward is for and communicating that clearly to
What Non-Financial Rewards is
One of the first things that the new
CEO and senior management team introduced was ‘Friday drinks’. This is paid for
from the CEO’s budget, with everyone ‘logging off’ at 4pm every Friday to
retreat to the staffroom for food and drinks. It is an excellent way to
transition from work to week-end with the inevitable questions and discussions
of......... “What are you doing on the week-end”? The Friday drinks will often have an extra
component. Teams which are rostered to do the putting out and tidying away
often provide additional entertainment through games or a quick fire quiz with
prizes for the winning team. Sometimes the games will have a special focus, for
example The Office Games when the Olympics were on. Tranzqual’s own version of
the Olympics had basketball (throwing rolled up balls of rubbish into waste
paper bins); javelin (paper darts) and several other adapted sports.
Tranzqual has a very active social club
committee. It is responsible for
organising the mid-winter and end of year Christmas functions and runs
activities through the year to supplement subscriptions to help pay for these
events. We have had the “Great Tranzqual
Boot Sale” and the “Great Tranzqual Regift”. Both were actually on-line auctions
of items donated by staff. The latter was marketed as an opportunity to recycle
those Christmas gifts received that you wished you hadn’t got.
Our annual cycle of work means that
Christmas and New Year are usually very quiet times for us so we can shut the
business down at that time. It has long been part of our leave policy that the
3 working days between Christmas and New Year are special leave days and do not
come off peoples’ annual leave. It is quite a satisfying feeling to return
after nearly 2 weeks off work and you haven’t even dipped into any of your
annual leave entitlement.
A year ago we introduced our health
and wellness programme. It was a bit of a challenge for us because while we
wanted to support health and fitness initiatives, we recognised for the “sporty
types’ this would not be a problem, but for others, things such as subsidised
gym membership would have the appeal of a ten day old sardine sandwich. We went
for a compromise solution. We financially support people participating in the
Round Taupo Cycle Race, the Kiwi Workplace Challenge, Round the Bays Fun
Runs/Walks, and the Tranzqual Titans (business league indoor football team). To
balance this we decided to provide something that allowed individuals the
flexibility of prioritising their own health and wellness priorities. We
eventually settled on the Southern Cross Activa card system as a way of doing
this. At the start of each year we deposit $400 into everyone’s activa account
for them to choose what they spend the money on. Hopefully they pick from the
range of goods and services available something that will benefit their
physical health but whatever they select we are confident that it will have a
positive impact on their general well-being. The pay back on this reward has
been significant with people reminded every time they present their card that
their employer values their contribution.
We make a clear distinction between
training and development. Training is the activities, seminars, events someone
attends to assist them to develop the technical skills to do the job.
Development is much broader than that. It brings in to play a whole different
level of learning. It may be the expanding of soft skills, or it could be the
creation of a whole new skill such as business acumen and strategic management.
Because we are a small/medium business we cannot always develop people up the
internal pathway. At the risk of losing people to bigger roles in other
organisations we are prepared to invest in the careers of our best performers.
We do this through funding course fees for people studying toward a tertiary
qualification, we also provide up to 5 days study leave per paper. We also seek
out some of the most well regarded business and leadership courses available to
develop our top talent. Our belief is that this approach will help us to retain
top talent longer and when they do leave they will be a positive network for
our employment brand.
Not all people know what they want
to do, where they want to head. We assist people with their thinking around
their development plans by engaging external coaches to help with the process.
It is possible that they may end up wanting to move in a whole new direction
and take their career somewhere different from what we offer. We are prepared
to take that risk. It is better to work collaboratively with someone on these
issues than have the person gradually become more and more disengaged with
their work and their workplace.
Smarts – Improving financial literacy
This has not yet taken place but is
in our 2010 HR budget and is scheduled for later this year. In 2009 we worked
on supporting people’s health and wellness priorities. This year we will lend a
hand in the financial sphere of life. As I said right back at the beginning,
money comes in and money goes out. How often do we really ask.....
Am I doing
the best with the money I earn? And then having got the answer, how many of us do
anything about it? This ‘reward’ will
provide our people with a free financial advice seminar and then we will pay
the cost of a 1:1 finance consultation.
The return benefit is people
understanding and managing their finances better, meaning less personal stress
leading to greater engagement and productivity.
Things That Count
If you have taken the time to get to
know the people you work with then you will know what they value. Some of the small things can be; coffee cards
loaded with $20 for caffeine addicts; soft toys for cat and dog lovers; book,
music or film vouchers for those inclined to more literary or artistic
pursuits. The only limit to these is
really just your imagination.
Boat Go Faster Award
In 2008 Tranzqual introduced The
Barry Holt Memorial Award otherwise known as the ‘Making the Boat Go Faster’ award.
This is presented at our end of year Christmas function and is given to the
person who has been seen to make a real difference to the organisation
throughout the year. Barry Holt was a charismatic senior manager who worked for
Tranzqual for several years and died of cancer in August 2008. He is remembered
for many things, not the least being all his sayings. One he regularly used was
‘How did we make the boat go faster today’?
This may depend a lot on the sector
your business is in and what is the norm for those types of businesses. Also,
what expectations have been set within your own workplace culture regarding
rewards, their value and how they might be earned? At Tranzqual, our rewards
tend to be generic and across teams or for all staff because projects are
usually achieved through the efforts of many people from different groups
within the organisation.
Careful attention needs to be paid
when providing rewards that incentivise individuals or groups. If not set up
well, these can have unintended consequences e.g. individuals or teams pursuing
outcomes at the expense of intra and inter team co-operation and collaboration.
While results are important, these should not encourage behaviours that are
contrary to the organisation’s culture.
With our health and wellness policy
we got around the dilemma of reward matching by implementing a flexible
approach. The ongoing support for sport and recreational pursuits means those
people with the inclination to get out there and get active are able to select
those activities they want to take part in. Whereas those that are less sports
minded can chose from a range of health related services and products through
the activa card system.
There are times that we want to
reward individuals or teams for a great piece of work or a notable achievement.
This may be low-key such as a morning tea for all staff so that the
contribution is publicly acknowledged and everyone gets to share in the
celebration. We have a particular business group who like to celebrate either
milestones or the completion of a major project by doing a cooking class
together. They then finish the evening by eating the results of their efforts
while matched to a glass or two of a good Sauvignon Blanc or Riesling.
There are times when we simply take
someone to the pub and shout them a drink to reward them for something they
have done. This particular strategy seems to work well for the English people
who work for us. It seems that the strong cultural connection to the “ale-house”
means that they value this form of appreciation.
Rewards Helping Retention and Engagement
Rewards can only ever be one part of
an organisation’s culture development strategy. There are numerous other
interventions that when combined with non-financial rewards can help create a
great workplace culture and thus boost retention and engagement.
We monitor how we are progressing
with our aim of being a great place to work by participating in the JRA Best
Workplaces annual survey. The results
from the 2008 and 2009 surveys (finalists in the small and small-medium
categories) plus the individual feedback have reinforced for us that we are on
track with our rewards and recognition.
We are also able to relate these
reports back to our turnover statistics and again these indicate that
initiatives we have put in place are now producing positive results.
In the last 2 years the organisation
has grown from 37 to 50 full time staff. We started tracking our service trend
in March 2008 when the average length of service was 1.5 years. This had risen to 2.2 years by December 2009.
indicator of the success of our strategies was that in November 2009 Tranzqual
received the Human Synergistics Culture Transformation Achievement Award. Human Synergistics operates in 20 countries
internationally including working with around 350 of the Fortune 500 companies
and all the top 10 Fortune 500 companies. Their extensive database of
survey results feeds into teachings and research on leadership and culture at
seven of the eight ivy- league universities in the USA. These awards were set up in 2006 and Tranzqual
is only the 6th New Zealand organisation to receive such an award.
“There is more hunger for love and
appreciation in this world than there is for bread”.
“People will forget what you said, people will
forget what you did, but people will never forget how you made them feel”
As these two final quotes indicate,
rewards are not necessarily about how big, how much and how often. We believe
in recognising and rewarding behaviour and achievements that are consistent
with our organisational culture. The timing, the message that goes with them
and the genuineness with which they are given are the more important