The Impact of Reward and Recognition on Employee Engagement within Spencer and Arlington Ltd (S&A)

Aim of Research

Title: What impact will reward & recognition have on employee engagement within Spencer and Arlington Ltd (S&A).

Aim of Research:

The aim of the research is to investigate and assess the level of impact that reward & recognition would have on employee engagement within Spencer and Arlington.

Literature Review

Introduction

Employee engagement is fundamental to improving productivity within any organisation

Employee engagement is clearly associated with high levels of performance and raised levels of personal well-being. It is therefore incumbent on organisations to ensure they prioritise improving engagement levels.

Employee engagement has become a critical aspect of study not only for individuals in the academic field but also for research practitioners and top management within organisations (Hewitt, 2015; May, Gilson & Harter, 2004; Schaufeli & Bakker, 2004; Sonnetag, 2011; Strümpfer, 2003; Werner, Stanz, Visagie & Wait, 2011). Engagement is a complex and multidimensional issue that affects various stakeholders and organisational outcomes.

It is clear from research that there are many drivers of employee engagement however, in this literary review, I will focus on the impact employee reward and recognition could have on levels of employee engagement within Spencer and Arlington.

On average the organisational pay bill represents two thirds of total expenditure amongst social care organisations (People Count Third Sector 2015), making it the biggest area of expenditure by some way. With continued financial pressure on social care organisations, and the National Living Wage having come into effect on 1 April 2016, well informed and evidence-based decisions on reward are key. Many organisations are looking to do more with less as the need for increasing agile and cost-effective Reward structures expand in strategic importance, top business leaders are turning to more noncash rewards and recognition.

Increased healthcare costs have caused business leaders to research, restructure, and develop strategies to sustain service quality while operating on a more restricted budget (Cutler, 2015). Leaders are redistributing workloads and responsibilities among employees to maintain financial stability, leading to lower performance and a compromise of service quality by employees (Chodorow-Reich, 2014). Researchers have shown there is a strong correlation between levels of employee engagement and levels of employee performance (Kotze, van der Westhuizen, & Nel,

Disengaged employees adversely affect organisational strategies to promote higher standards of care and quality of life for long-term residential care patients (GabelShemueli et al., 2015; Liu, Norman, & While, 2013).

Literature Review

The findings may contribute to positive social change because increased employee engagement could (a) enhance the quality of life for members of the community who stand to benefit from long-term residential care services, (b) lower taxpayer entitlement costs, (c) reduce the incidence of medical error, and (d) increase quality patient care services. Furthermore, the perceived value of work rewards affects the extent to which the worker is available to engage (Kahn, 1990)

The future of corporations is in the hands of the people who work as their employees. This has brought to centre stage, the importance of human resources, more than ever before Developing and maintaining an engaged work force is a critical objective for HR as domestic and foreign competition stiffens.

Employee engagement is the level of commitment and involvement an employee has towards his organisation and its values. It is a measurable degree of an employee's positive or negative emotional attachment to their job, colleagues and organisation which profoundly influences their willingness to learn & perform at work. Employee engagement has a direct impact on the employee’ s productivity. The most productive employees are those that are not only committed and loyal; but also, those whose outputs are healthy and gratifying both for themselves as well as for the organisation they work for. Employees are the lifeline of an organisation. An organisation cannot survive without employees.

They are the blood line of an organisation. Employees are the main assets of the organisation and it is really important for them to prioritise their tasks at the workplace. 

The economic downturn in 2008 had a significant effect on organisations and the decisions to be taken by management. These decisions have impacted employee engagement levels and perceptions globally, leading to changes in leading drivers of employee engagement.

Employee engagement is an umbrella term that captures any number of factors including job satisfaction. It is an idea that helps to develop strong positive attitudes among people towards their works. It also plays a major role in ensuring that, people always give their best even when times are tough for an organisation.

Employee engagement is of mix of factors like organisational commitment, belongingness, job satisfaction, employee involvement & organisational citizenship. Success of employee engagement links to higher level of productivity, more customer satisfaction & low rates of absence.

Kahn (1990) defines employee engagement as "the harnessing of organisation members' selves to their work roles; in engagement, people employ and express themselves physically, cognitively, and emotionally during role performances". Thus, according to Kahn (1990) engagement means to be psychologically as well as physically present when occupying and performing an organisational role.

Social Care

According to Holbeche and Springett (2003), people's perceptions of 'meaning' with regard to the workplace are clearly linked to their levels of engagement and, ultimately, their performance. They argue that employees actively seek meaning through their work and, unless organisations try to provide a sense of meaning, employees are likely to quit.

The benefits of an engaged workforce are reflected in performance and productivity, improved quality and customer care, enhanced cooperation amongst the workforce, reduced staff turnover, reduced absenteeism and disputes and added value by drawing on the skills and knowledge of all employee.

Reward/Recognition

One of the key aspects seen as impacting employee engagement is rewards. According to Eric (1994), rewards can be defined as various different benefits that are offered to employees in exchange for work or value. Rewards may differ in that they may be intrinsic or extrinsic, direct or indirect, and financial or non-financial (Armstrong, 2006; Mahaney & Lederer, 2006; Mottaz, 1985).

Employees crave recognition, trust, and responsibility. Employers should make employees feel their work and efforts are acknowledged and appreciated. By creating an environment where employees feel supported and valued, they will be empowered and motivated to engage and give their best.

According to a recent study conducted by HR Solutions (2011), recognition is the key driver of employee engagement.

A decadelong research project conducted by the New York Times bestsellers, Adrian Gostick and Chester Elton, found that 79% of employees who leave their jobs cite a lack of appreciation as the primary reason (Russell, 2010).

A generous reward and recognition package are therefore one of those tools that HR could utilise to enhance employee engagement within an organisation. Organisations often look to recognition programs to increase productivity and morale among employees.

It is therefore crucial to implement an effective and efficient reward system based on each unique organisation's needs (Kerrin & Oliver, 2002).

Towers Watson found that the companies with high employee engagement showed a 19 percent increase in operating income and a 28 percent increase in earnings per share.

Recognition programs must consist of a blend of tools and qualitative, strategy-driven ideas to improve employee performance. When asked how they plan to change their people strategies moving forward, 63% of CEOs said they intended to use more nonfinancial rewards to motivate their employees. In fact, of all the possible remedies available to them, noncash was ranked as the strategy of choice.

The Economy

Two of the most common recognition awards are length-of-service and performance.

Employees like service award programs because they provide all employees with an equal opportunity to receive recognition. Employers like these programs because they are easy and inexpensive to administer.

Service awards often are publicised in company newsletters and bulletin board notices. The publicity promotes a sense of belonging and sends a message to award recipients and their co-workers that their service is valued.

An employer can ensure an effective performance award program by establishing specific guidelines for qualifying for an award; looking for ways to honour employees performing routine, repetitious jobs; and ensuring that rewards are commensurate with achievements so that employees do not feel under-rewarded.

Conclusion

In today’s business, chief executives have a growing realisation they need to depend on employees more to distinguish themselves in a very highly competitive and talent dependent global market.

As a result of this reliance, they are relying on HR to develop and deploy reward strategies that would enable them to attract and retain the best talent available. Majority of chief executives indicate they feel that noncash awards should be a bigger part of the total compensation mix.

Research has shown that engagement levels worldwide are at critical levels (Hewitt, 2013; Gallup, 2013; Hay Group, 2013; Mindset Management Programs, 2014).

 In the current economic context, it is therefore of utmost importance for Spencer and Arlington to find ways to motivate employees and boost their levels of engagement.

By taking note of the link between an employee recognition programme and employee engagement, the company can strive to treat their employees with respect and in doing so, will benefit from improved engagement and return on investment.

References

Robinson, I. (2006) Human Resource Management in Organizations. London, CIPD.

Robinson, D., Perryman, S. And Hayday, S. (2004) The Drivers Of Employee Engagement. Report No 408. Brighton: Institute For Employment Studies.

Prabhi, G. & Tegala Roja Rani (2009), "Employee Engagement: A Mantra for HR Managers, page no- 49, HRM Review.

Cufaude, J. (2004) in Lanphear, S. (2004). 'Are Your Employees Highly Engaged?' Credit Union Executive Newsletter, 19, 1-2. Credit Union National Association, US.

Richard S. Wellins, Paul Bemthal, & Mark Phelps (2004) "Employee Engagement: The Key to realizing competitive advantage page no 2-4" Development Dimensions International, Inc., MMV

Kahn, W.A. (1990) 'Psychological conditions of personal engagement and disengagement at work', Academy of Management Journal, Vol 33, pp692724.

Lawler, E & Worley, C.G. (2006) 'Winning support for organizational change: Designing employee reward systems that keep on working', Ivey Business Journal, March/April, pp 34

Nitin Vazirani (2005) "Employee Engagement" - SIES College of Management Studies, page no - 2-4.

Rawal Priyanka (2009), "Engaged Employees: Carrying High Degree of Organizational Pride", Page no- 41, HRM Review.

Van Dyke, Melissa; Ryan, Mike, Compensation & Benefits Review, September 2012, Vol.44(5), pp.276-279

Jeffrey, S. A., & Shaffer, V. (2007). The motivational properties of tangible incentives. Compensation & Benefits Review, 39(3), 44-50.

The effect of financial incentives on performance: A quantitative review of individual and team-based financial incentives. Journal of Occupational and Organizational Psychology, 87, 102–137