Benefits and Compensation

Spot Awards–A Detailed Plan You Can Use

In yesterday’s Advisor, consultants Brandon Cherry and Brooke Green detailed incentive plans for non-exempt employees. Today, their take on recognition and spot bonuses, plus an introduction to the comprehensive guide to non-exempt compensation.

Here are the last two of Cherry and Green’s Six types of incentive. [Go here for the first four types.] Cherry and Green are both principals at HR consultant Hay Group. They offered their remarks at a recent webinar hosted by BLR/HR Hero.

Plan Type

Overview

Advantages

Disadvantages

 

Recognition

  1. Cash or non-cash reward for a specific act or achievement.
  2. Usually based on peer or supervisor nomination.
  1. Proven tool for building goodwill and communicating the strategy of the organization.
  1. Requires basic leadership credibility.
  2. Can undermine equity if individual awards are given group achievement.
  3. If the recognition is for a profoundly impactful achievement or innovation, it may appear hollow (save $100,000, get a $100 gift card)
 

Individual

  1. Individual plans can contain any of the options outlines above.
  1. Tailored to individual needs
  1. A lot of administration.

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Individual Spot Awards

Cherry offers the following example of a carefully-worked-out spot awards program:

Example Title

Funding

Annual Frequency

Suggested Awards

Bronze Star

  1. Allocated based on % of local payroll
  2. Budget set as part of annual planning cycle

40-50% of employees in any given year

  1. Book, framed print, photos
  2. Clothing, gear, logo items
  3. Gift certificate (approx. $25-$100)
  4. Cash (approx. $25-$100)
  5. Personal gifts
  6. Food / celebration
  7. Recognition letter from leadership

Silver Star

  1. Allocated based on % of local payroll
  2. Budget set as part of annual planning cycle

20-30% of company in any given year

  1. Book, framed print, photos
  2. Clothing, gear, logo items
  3. Gift certificate (greater than $100)
  4. Cash (greater than $100)
  5. Personal gifts
  6. Food / celebration
  7. Public recognition
  8. Time off (1-2 days)

Gold Star

  1. Central funding
  2. Budget set as part of annual planning cycle
  3. Proposed award value is part of nomination process
  4. Case demonstrating impact

Maximum of 5 recipients in any given year

  1. Travel to other offices / work sites
  2. Cultural exchange opportunity
  3. Cash (greater than $500)
  4. Time off (3 days or more)

Setting goals for incenting non-exempts, one more HR challenge that goes back to the most basic of HR docs—the job description. Can’t set the goals without a clear picture of the objectives.

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