Recognizing and rewarding employees in a challenging economic environment
June 20, 2023
One of the best ways to manage and grow your talent is through continuous career progression. This is particularly pertinent now, in a volatile economy when budgets for salary increases are tight. Data tells us that in 2023, fewer employers are planning to give base salary increases, and the ones that do are looking at smaller numbers. All this comes at a time when pay transparency is becoming increasingly important.
When it comes to continuous progression, we often get asked how to reconcile this friction between salary budgets and talent growth. “How can this model work in a market where budgets are especially tight?” “Won’t employees be upset or disengage when they see their progress, but there’s no promotion in sight?
Our response to this is simple: continuous progression matters. In all economic conditions, it’s an effective tool for development and retention. It enables employees to have more control over their growth and development. But more importantly, continuous progression is empowering, transparent, and equitable. And this keeps employees engaged and aligned with company objectives.
Think of this time as an opportunity and a problem-solving challenge: what are the ways you can acknowledge team members in ways that don’t include promotions and salary increases? Being transparent with employees about cash-flow constraints is important, but just-in-time can also be a great way to “pay-as-you-go” for performance, and do it incrementally vs larger pay increases normally associated with “a promotion.”
One answer to this is to revisit individual motivators. We’ve talked about motivators like accomplishments, a sense of purpose, autonomy and flexibility, and learning and growth.
What are some strategies to recognize and reward employees for their progress and professional growth in difficult economic times?
First, a little appreciation goes a long way. —this is especially true for individuals motivated by a sense of accomplishment. According to Jane McNeill from global talent agency Hays, one of the best ways to recognize and motivate employees during tough financial times is to openly discuss recognition and rewards. This includes saying “Thank you”, recognizing strong performers in internal/external social media channels, offering flexible work arrangements, offering training and professional development, and enabling their skills growth by offering more challenging tasks/projects.
All of these strategies are echoed by the Society for Human Resource Management, which added that intentional acknowledgment and thank-you’s from senior leadership, such as “awarded paid time off,” provide rewards to the employee at a relatively low cost.
How career progression supports reward and recognition
As another way to recognize outstanding work, McNeill suggests giving employees hands-on involvement in their career progression. With Pando’sjust-in-time career progression, employees can transparently see their progression through their ranking on different role specific competencies. Without this tool, employees are generally in the dark—they can only take a guess as to whether they’re headed in the right direction. Seeing progression can be a reward unto itself, especially for folks motivated by achievement or growth. It can also build a sense of belonging within the team and organization, seeing the broader picture that each employee is a part of. That picture is made visually apparent in competency frameworks. This is motivating for individuals looking for a sense of purpose in their work. And rewarding with the right motivators leads to retention, which, in turn, benefits your bottom line.
McNeill also mentioned flexibility as a key reward mechanism, and this is consistent with individual motivators like adaptability and flexibility. But how does continuous progression feed into flexibility? Well, continuous feedback is part of the continuous progression equation. Managers (and peers) should provide continuous feedback, so employees know where to go and the best advice to get there. This approach builds the necessary trust within teams to afford flexible arrangements, which is key for employees motivated by flexibility.
Continuous career progression eliminates the burden, uncertainty, and subjectivity of quarterly or, worst yet, annual performance reviews. It creates a more equitable, transparent, and accountable system that lets employees see where they stand in real time. And it creates feedback loops that are integral to creating effective manager-report relationships.
Continuous progression keeps people engaged, growing, and on track. It is both a way of rewarding employees and also a way of identifying learning opportunities that can be used as ways of recognizing team members. When the system is clear, feedback is frequent when employees play a role in their own progress and development, the outcomes are powerful. Employees are more likely to stay within an organization when they are satisfied when they see opportunities for growth, and when they feel valued and psychologically safe. This has many positive business impacts, including low turnover, increased skills and knowledge, expertise retention, employee loyalty and commitment, and greater productivity.