Rewards work when staff see a clear link between their results and the reward. Money is only one type of reward. This post gives you a reward menu with four types. It also shows how to match rewards to appraisal results.
Learn these skills in the course Human Resources (BL-HR), module 3.
Who This Is For
HR managers who design the bonus and reward rules. Line managers who want to keep good staff. It also helps owners with a small reward budget.
The Four Types of Reward
| Type | Examples | Cost |
|---|---|---|
| Money | Bonus, salary increase, sales incentive | High |
| Time | Extra day of leave, flexible hours for a month | Low |
| Growth | A course, a stretch project, a mentor | Medium |
| Thanks | Written thanks from the director, mention at the monthly meeting | None |
Match Rewards to Results
Use the rating from the appraisal. Agree the menu with management before the appraisals start.
| Appraisal Rating | Money | Time, Growth and Thanks |
|---|---|---|
| 5 Far above | Highest bonus band | Stretch project or course, thanks from the director |
| 4 Above | Higher bonus band | Course or mentor, thanks at the monthly meeting |
| 3 Meets | Standard band | Thanks from the manager |
| 1 to 2 Below | No bonus | Development action or improvement plan |
How to Set Up the Link
- List the rewards your company gives today, in all four types.
- Add low-cost rewards: time and thanks cost little but staff value them.
- Match each appraisal rating to a set of rewards. Write the rules on one page.
- Share the rules with all staff before the year starts.
- Give thanks soon after the result, not only at year end.
- Check once a year that the rewards still match the results.
Example: A Retail Chain
Take a retail chain with a small bonus budget. Store managers want to keep their best staff. The chain adds a “Store of the Month” thanks. The top store also gets one extra day of leave. High performers also get a supervisor course. The cost is low, and staff see the link.
What Good Looks Like
- Staff know the reward rules before the year starts.
- Staff can see which rewards follow which rating.
- The menu has money, time, growth and thanks.
- Thanks comes soon after the result.
Common Mistakes to Avoid
- Giving the same bonus to everyone. Staff then see no link to results.
- Waiting until year end to say thanks. Thanks works best soon after the result.
- Changing the reward rules in the middle of the year.
- Forgetting growth rewards. Many good staff value a course or a project more than cash.
Try It This Week
List every reward your team gave in the last six months. Sort them into the four types. Add one “thanks” reward that you can give this week.
Frequently Asked Questions
Do rewards have to be money?
No. Time, growth and thanks also work. Use a mix, and make the link to results clear.
Where does the course teach this?
Module 3 of Human Resources (BL-HR) has a group activity on rewards and recognition.
Next Step
Read the full outline of Human Resources (BL-HR). All class dates are on the Training Calendar. For a group from your company, get a quote for in-house training. More HR Work Tips are in the skill area HR. Read also:
