The strategic link between reward and employee engagement

There is no one key driver of employee engagement – the push to secure the intellectual, emotional and physical commitment of individuals – according to research by Edenred (2008). Rather, it’s a mix of a range of factors that includes communication, career opportunities, quality of work / life balance and leadership, as well as rewards, recognition and benefits.

One in four employees in this survey rated reward and recognition as a key driver in engaging workers in their organisation and although it can only help build engagement in the context of a broader strategy, it’s very important for organisations to understand where it fits. 

Many commentators still refer to reward and recognition as a hygiene factor in engagement – get it right and no one notices, get it wrong and the best people up sticks and move on. Yet this argument – which suggests reward is fundamental in recruiting people and not much else – fails to look at reward and its potential impact in its broadest sense.

A first-class reward and recognition strategy is about managing high performance and valuing people’s extra effort. As such it encompasses far more than base pay; it involves every effort a business makes to show that it values its people.

 ”The role of reward, recognition and benefits in engagement centres around total reward and communicating with employees about the value of the benefits and incentives that are available to them. It’s critical employees know what is available to them and why they need to take an interest in the solutions and services available to them,” explains Andy Philpott, marketing director at Edenred.

Of the employees surveyed by Edenred only 20% reported they fully understood the value of the benefits offered to them and one-third had no understanding of their value. This is surely a missed opportunity for many organisations and when this lack of understanding is compared with employees’ satisfaction with benefits – only 25% think there benefits are competitive, for example – the pivotal role of reward and benefits in driving engagement becomes clear.

 There’s much employers can do to make the link between reward, recognition and engagement within their organisation and making sure they maximise the payback of this investment for their business and their people.