Rewards Programs Only Work for Top-Performing Employees

April 12, 2005 (PLANSPONSOR.com) - Almost 50% of human resource professionals say that monetary rewards programs are "very effective" at motivating top-performing employees, according to a survey from the Society for Human Resource Management (SHRM).

It seems, however, that underperforming employees are not affected by such programs. According to SHRM, HR professionals surveyed said that both non-monetary and monetaryaward programs are “very effective” at improving employee morale;however, HR professionals said that neither was effective at motivatingunder-performing employees to improve.

The 2005 Rewards Programs and Incentive Compensation Survey, released Tuesday by SHRM, also found that different levels of employees are rewarded for goals stretching over different timelines. It was found that managers are the most likely employees to be rewarded for reaching long-term goals. These could include incentive compensation, year-end bonus, and profit sharing, according to the company.

Non-managerial employees are the most likely to be eligible for new hire referral bonuses and spot bonuses, which are usually associated with short-term goals.

The survey also found that such programs should be reviewedin order toreflect an organization’s change in strategicdirection. Overall, 44% of HR professionals said that their rewards programsare reviewed once a year.

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