How to Reward Star Employees When Money Isn’t an Option

Performance-based reward systems can have significant effects on employee motivation. This sounds simple but is actually very difficult to implement. If high-performers do not feel that their extra contributions are being recognized and rewarded, then their motivation (and their performance) will decrease. Conversely, if average or low performers notice an inequity in rewards, their motivation could sink as well. This can be mitigated based on perceived fairness. Since the agency’s mission success can hinge upon its employees’ motivation, you’ll learn strategies to put your performance-based reward system to great effect.

Reward systems should motivate employees to exhibit the right behaviors. Individual goals should be closely aligned with organizational strategic goals and have clearly defined performance standards. Employees should have clear line-of-sight on how their behaviors result in their rewards. However, many agencies administer performance-based rewards on a case-by-case basis. This leaves room for inequity and perceptions of unfairness.

Reward, Reward, Reward

Federal agencies often give performance-based financial rewards to deserving employees. This can be an annual bonus or a Quality Step Increase (QSI). An annual bonus is a one-time event while a QSI will forever raise the employee’s salary. A QSI is rarely awarded and for good reason. The whole point of a performance-based reward system is to motivate future behavior by rewarding recent behavior. Once a QSI is locked in, it can’t be taken back. It is unreasonable to expect a single reward (no matter how generous), given many years ago, to continue to shape behavior today. Likewise, we should not expect a reward given today to continue to shape behavior far into the future. However, if the agency conducts a compensation analysis and realizes it is systematic pay discrepancies across protected classes, QSIs can be an avenue to mitigate legal risks.

Is Money Always the Answer?

No. Funding for performance-based rewards can change from year-to-year and sometimes it is limited. This may tie the rating official’s hands. However, money is not the only reward a manager can give to successful employees—get creative with rewards, like extra paid time off.

Extra time away can be motivating to some, but less so for others. Top performers are typically engaged and motivated by their work, so offering time away from their projects isn’t necessarily the best motivation. Alternative rewards could be granting coveted work assignments or interesting projects. Offering sought-after opportunities demonstrates to employees that you are invested in them and want them to continue growing with the agency. Outside of tangible rewards, a simple acknowledgment of a job well done and an expression of gratitude can make more of a difference in motivation than people think.

In summary, management and HR need to work together to identify the levers that can be used to motivate employees. Then, it is up to managers to know their staff, appraise them and distribute the appropriate rewards and feedback.

Agencies that don’t adequately reward the extra contributions of high performers will have difficulty motivating and retaining them. So, if your rewards system needs fixing, don’t wait. Invest in a winning HR and rewards system to recognize and reward your top employees—this will ultimately contribute to the success of the agency.

George Kettner is part of the GovLoop Featured Blogger program, where we feature blog posts by government voices from all across the country (and world!). To see more Featured Blogger posts, click here.