How Can I Reward High Performers When Money Is Tight?
This year has been quite turbulent for many businesses, with many deciding to pause salary increases for the year, or in some cases, coming to agreements with their team to reduce salaries to make it through to the other side. With the end of the year approaching, and strategic planning taking place for the next six (6) months, is there an alternative to rewarding your high performers other than through remuneration?
How can I reward high performers without giving them more money?
As we know, money is not always the answer however the question we often get asked is how high performers can be rewarded in other meaningful ways. The concept of total rewards has a number of key components that are worth considering when designing a remuneration and reward strategy for your business.
To start with, we have Basic Remuneration. This may include components such as:
- Base pay increases
- Short-term incentives
- Long-term incentives
- Profit sharing plans
If linked explicitly to predefined levels of performance, basic remuneration can be a highly effective component of a total rewards strategy.
Layered on top of this, we have Benefits; which may include components such as:
- Health care
- Life or disability insurances
- Employee assistance programs
- Time off
- Flexible work arrangements
- Gym memberships
- Car parking
The risk with benefits is that they often not tied to performance levels. Instead, they are tied to position or are available to all employees. The associated risk with benefits is that a sense of entitlement can surround these and they do not serve to reward high performance.
Finally we have Development and Culture related rewards; which are highly effective at driving employee engagement and performance. These include components such as:
- Training and development
- Mentoring / coaching
- Well-being programs
- Job rotations
- Discretionary technology
- Career management programs
- Team events / celebrations
In combination, the most effective reward strategies combine components from each of the three categories above and have a well-defined and communicated link to individual, team and business performance.
What Do I Do If an Employee Requests A Pay or Salary Review?
If a pay rise is something that is not currently an option for your business, schedule a private meeting with your employee to explain the reasons for not increasing their salary at this time and be sure to give your employee ample opportunity to ask any questions.
In these instances, the alternatives to offering a salary increase include non-monetary benefits tailored to the preferences of individual employees. This could include flexible work arrangements, or opportunities to work from home that can reward employees with greater work-life balance, in turn can encouraging loyalty to the business.
Treating pay rise requests seriously and with honesty shows that you care about your people and value their contribution to the business. However, also taking the time to outline to employees the reasons behind any awarded pay increases, you affirm that outstanding performance is rewarded and something worth aiming for on a consistent basis.