Magazine article HRMagazine

Link to Engagement Drives Growth for Diverse Incentives

Magazine article HRMagazine

Link to Engagement Drives Growth for Diverse Incentives

Article excerpt

Although use of rewards and incentives in forms other than cash appears to be increasing, the most noteworthy trend in this area may be the expanding definition of rewards. "We think of a reward as anything the organization provides to employees of perceived value," notes Tom McMullen, reward practice leader for North America at the Hay Group in Chicago.

HR professionals are closely monitoring the value of those rewards and incentives, often discovering that they return value to organizations by helping increase employee retention and engagement. The causal links appear to be shaping how HR professionals measure and manage nonfinancial rewards initiatives such as employee recognition programs. They track financial returns from recognition and other awards programs with metrics such as return on investment, turnover, customer retention and employee productivity. In particular, some survey research has shown a return on investment-in the form of reduced health care costs-from wellness programs that feature awards and incentives.

In many cases, adding up these numbers yields an interesting conclusion: A number of nonfinancial rewards and incentives that traditionally were considered or dismissed as "soft," such as internal recognition, can help boost the bottom line. …

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