In the age of COVID-19, organisations have quite rightly focused on a number of areas to support employees, including:

• The recalibration of reward principles pinned to a compelling Employee Value Proposition;
• Wellbeing, not only from a mental, financial and emotional perspective, but also incorporating physical benefits so employees can take better care of themselves;
• Communicating cash compensation outcomes to provide as much clarity as possible in terms of financial implications.

The financial position for employees can vary greatly from individual businesses’ revenue streams and business realities. Painting a remotely positive picture for base salary and/or bonus outcomes is likely only possible for organisations who have a strong cash position or future revenue stream, and can act from a position of strength. In the absence of this, the key to engaging employees throughout these times is the right level of communications – even if news isn’t good, or there is no news at all. In particular, a vacuum of communications is likely to create more questions than answers, lead to speculation and could create a self-fulfilling prophecy of discontent within the organisation. To encourage more communications with employees, we believe there is also an opportunity for organisations to accelerate the shift from traditional performance management methods to performance development. Performance development is based on organisations trusting and enabling employees to do their best work, through training, developmental conversations, or giving praise when appropriate – throughout the year. Why does recognition matter in these times? One area of reward which can have a significantly positive impact on communications, wellbeing, and overall engagement is recognition. Typically, recognition has been used as a method of valuing individual contributions or one-off outcomes of high performers. However, in the virtual world we are now working in, it has become more difficult to monitor and measure high performance – and therefore to show employees their work is valued. Recognition can be used to supercharge the shift to performance development. Managers having more frequent and open conversations with employees results in a better understanding of great performance in the virtual work environment. This in turn enables more rewarding of these outcomes and behaviours throughout the year, and encourages more connectivity across the organisation as high performance is championed. “Aren’t we meant to be saving money wherever we can?” Organisations do not have to spend mega bucks on recognition. Non-financial recognition is an effective method of recognising performance, with the gestures behind recognition often perceived as more important by employees than the financial value of awards. For example, peer-to-peer nominations for recognition can help increase consistency of recognition awards, and ensures it’s not just those who work on the high profile projects whose contribution is valued. If employee cash compensation has been effected by COVID-19 in terms of pay freezes or bonus cuts, financial recognition can provide a strong message that the organisation is doing what it can in the harsh financial climate we are operating in – whilst still costing less than traditional base salary increases or bonus awards. Financial recognition lies in between performance-related pay and non-financial recognition. It presents an opportunity to offset many potential pitfalls we hear organisations describing of performance-related pay – including immediacy of the rewards, the ability for peers or cross-departmental teams to nominate other peers, and continuous reinforcement of desired behaviours within an organisation. How to successfully implement recognition? Whether financial or non-financial recognition is implemented, organisations need to link criteria to values, strategy and wider business agenda. A good example of this is Diversity and Inclusion (D&I). Although reward is only one part of the picture when improving D&I, if organisations have it at the top of their agenda, they could provide criteria for recognition awards directly linked to initiatives focused on D&I. Keeping recognition authentic is key, which is why we’d recommend involving employees in the design of your scheme, and look for opportunities to maximise employee ownership. Now more than ever, recognition tells employees you value their contribution, want to communicate great performance across the organisation, and are committed to keeping them engaged through these difficult times – even if other areas of their reward package are under pressure. Get in touch with us to find out how we can help you bring your recognition scheme to life. Peter Fairchild, Senior Consultant at QCG – October 2020