The vast majority of HR managers say missing open enrollment has a big impact on employees’ wallets, according to a recent CareerBuilder.com survey.

How big of an impact?

• 34% of HR managers say missing open enrollment costs employees at least $500 a year in out-of-pocket expenses (for things like medical care and school tuition, which could’ve been covered by their employer)
• 20% say it costs employees more than $1,000, and
• 10% say it costs workers more than $2,500.

That’s distressing news when you consider that half of hiring managers say more than 10% of their workforce misses annual open enrollment deadlines.

In addition, 25% of workers admit they don’t pay attention to benefits changes, figuring their benefits will roll over — or because they feel the whole process is too confusing.

Employees don’t realize what they’re missing

Another big reason employees don’t participate: They don’t realize everything their employer is offering.

When asked which benefits employees aren’t taking advantage of, HR managers said:

• Wellness benefits (45%)
• Flexible healthcare spending (43%)
• Tuition Reimbursement (38)
• Banking programs (25%), and
• Discounts on personal entertainment (24%) and technology (22%).

Shine the spotlight on them

In general, the more frequently employers reward workers, the more those workers will aim to please.

The key is making sure rewards fit the size of employees’ accomplishments — and that the rewards vary.

Example: Don’t always give away the same $10 gift cards. Instead, hold a public recognition ceremony or send out a company-wide e-mail praising the employee. Be sure to focus on what the employee did that saved others time, boosted profits or otherwise helped the company.

Offer decision-making power

Another good way to show employees they’re appreciated and make them feel valuable: Encourage supervisors to allow employees to make small financial decisions.

Example: Let employees choose which new desk chairs everyone will get or which prizes will be given away at the next employee appreciation meeting.

Solicit employee ideas

Welcoming ideas from employees about new benefits is a great way to get them plugged into your programs.

Sure, a few suggestions are bound to leave you scratching your head. But if you can use just one, it’s worthwhile.

An employee’s age provides a useful guide for what forms of recognition are most appropriate.

Here are the generation-specific rewards each group is most likely to appreciate.

Generation Y (born 1981 or later)

The youngest employees tend to place the greatest emphasis on work-life balance.

Rewarding these employees with the ability to work from home — or an extra floating holiday — tends to get better results than formal rewards or prizes.

Generation X (1964-1980)

This group tends to be more informal than older employees.

Some Gen-Xers covet trendy or name-brand prizes — like an iTunes gift card.

Others prefer company golf outings or attending similar social events.

Baby Boomers (1946-1963)

Many Baby Boomers prefer rewards that show management appreciates their hard work.

For instance, theater tickets or restaurant gift cards are often popular rewards.

Alternatively, some Boomers prefer recognition ceremonies — especially when their families can be present.

Seniors (born before 1946)

The employees of the so-called Gold Watch Generation grew up in a business culture steeped in formality and focused on rewarding seniority.

As a result, formal rewards (e.g., wall plaques) that are presented publicly tend to resonate most with these employees.

Does your company have a unique way of rewarding or motivating employees? Let us know in the Comments Box below.

A recent survey found that “engagement levels” — consultant-speak for employee loyalty and motivation — have dropped 9% across all classes of workers. But there’s more: That loyalty and motivation level dropped almost 25% for top performers over the past year.

The stars are unhappy
Indeed, top performers appear to be the least-happy campers. Nearly 20% fewer of the best and brightest would recommend others take jobs with their employers. Twenty-six percent are less satisfied with advancement opportunities than they were last year, and they’re 14% less likely to stick with their current employer once the economic picture brightens.

Two more disturbing stats from the top-performers: 29% say they’re less confident this year that management will be able to grow the business. And 41% think pay and benefit changes instituted over the past 12 months have hurt work quality and customer service.

Overall, not a pretty picture. What can employers do? There’s probably no secret formula. Open communication, performance-based incentives and low-cost perks — flexible schedules, for instance — can certainly help.

And it also pays to remember that employees are a notoriously fickle lot. As the economy improves and everybody gets a few more bucks in their pockets, attitudes will likely improve.

For a look at the Executive Summary of the Watson Wyatt research on employee loyalty and motivation, go here.

The best parts of these motivational tools — excerpted from the Harvard Business Review — is that they don’t cost anything and just about any manager can implement them:

• Give feedback, lots of it. But don’t confuse feedback with backslapping. In uncertain times, employees want you to be dead-on honest and thoughtful.
• Offer as much professional development as possible. One mistake managers make: Setting a career path for an employee without fully asking the employee about it. Try not to assume you know what the employee wants. At the very least, employees will be motivated by knowing you care what they think.
• Say “thanks.” Money and benefits are tight, so if you can’t shower them with cash, at least shower them with praise when they deserve it. And practice the two kinds of thank-you: (1) For doing the everyday job at a high level. (2) For going above and beyond the everyday job.

And the cool interview question:

• Ask employees (and applicants) what they’d do with themselves if they had all the money they needed. OK, some people are going to say “nothing” — that’s a given. But some others will tell you what their true passions are. Maybe you won’t be able to accommodate them, but you’ll know what motivates the person and how you can best adjust the tasks at hand to match the passion. Example: If someone says, “I’d write a book,” you then know that person would be happier doing work that involves writing, even if it’s only routine reports.

According to a recent survey by Robert Half International and CareerBuilder, more than one-quarter (28%) of employees are planning to ask for a raise as soon as the economy improves.

Additionally, just about half (49%) of those surveyed said pay raises will be the most effective retention tool after the recovery.

Some other key findings from the survey included:

• 40% of hiring managers said pay increases would be their company’s primary means of retaining top performers, and
• 20% of employees said the most effective retention tool would be better benefits and perks once the economy improves.

The top benefits and perks participants cited: technology upgrades, followed by tuition reimbursement or subsidized training.

Recent research by Visa and MasterCard shows in certain situations, there are better ways to get the results your company wants from its people.

Of particular interest: What works best, cash or noncash incentives?

The answer from the research: It depends, as reported in the publication “CFO and Controller Alert.”

If you’re trying to reward people for an overall “job well done,” use any cash that’s available. Overall performance issues are what salary increases and bonuses are for. That’s for the longer-term wins.

If you want to reward a specific behavior or achievement, go for noncash recognition. Handing an employee $50 for a superior safety track record, form instance,  probably won’t encourage anyone to keep it up.

That’s because people tend to use cash for bills and other household expenses,  and then the money’s gone and forgotten.

But an iPod shuffle, for example, costs the same amount and is a constant reminder to keep that protective equipment on, along with the bragging rights that go with a tangible, long-lasting gift.

Just remind your Payroll department: Any cash reward – or one with a clear cash equivalent, like gift cards – is taxable to the employee.

The most common characteristics of high-ROI recognition programs — regardless of their monentary value — are their spontaneity and perceived value by employees themselves. 

In reality, the cost of some of most effective spot awards and bonuses often amount to less than 1% of base pay — and the awards don’t even have to be given in cash. 

Less sense of entitlement

Part of the problem with traditional end-of-year or quarterly bonuses (apart from the fact that they cost employers an average of 10% of base pay) is that employees expect to receive them for reaching certain goals.

Sometimes employees simply expect it no matter what. For example, at many firms, an annual holiday bonus is viewed as an entitlement and people inevitably grumble that it’s not high enough. On the flip side, with spontaneous awards and bonuses, workers are often pleasantly surprised.

Benefits consultant Ken Stahlmann spells out four keys to making the latter type of awards work, even if they’re lower in cost:

1. Creativity is crucial

The most effective programs typically give out awards weekly or monthly. To avoid over-stretching the budget – and avoid a ho-hum attitude setting in – creativity is a must.

One way that never gets old: combining time off with a second, non-cash award. Example: One firm gives a half-day off in combo with movie passes once a month.

Another, at weekly staff meetings, holds a random drawing for a dinner gift certificate, plus permission to leave work early once.

2. Make it personal

Rewards have more lasting impact when they’re geared to people’s personal needs or interests. Two examples:

• one firm with many foreign-born, low-wage employees awards a $20 pre-paid phone card after 90 days of service, and a $100 card for outstanding work, and
• another company with a lot of sports nuts took a few top-performers to a ball game. Managers said it was the best $200 they’ve ever spent in terms of creating ongoing enthusiasm.

3. Add structure

The awards may seem spur of the moment, but top programs have a fixed budget and structure set before anything is handed out. Example: One retail firm awards “points” for good work. Folks can then trade in their points for store merchandise.

By letting people bank points for more valuable rewards, the employer saw a solid jump in retention.

Other organizations prefer to let employees reward each other. For instance, a small healthcare provider keeps a “goodies box” onsite – paid for in petty cash and stocked by employees themselves.

When someone spots a co-worker going the extra mile, he or she pulls out a prize and awards it. The program is a huge hit: It’s immediate and personal, yet structured.

Even so, you hope to retain them, because they’re often reasonably productive employees. .

Deadline? What deadline?

Some employees seem to think you’ve nothing better to do than nag them to turn in benefits paperwork. They act annoyed when you send repeat reminders (forgetting you are actually doing them a favor). Others ignore you until it’s too late, then ask for an extension.

To stop such situations from becoming chronic, consider adding a benefits paperwork policy to your employee handbooks.

The policy should warn employees that deadlines are non-negotiable. You may also want to mention in the policy that most federal and state benefits laws – ranging from ERISA to FMLA – say you’ve done your duty by sending out just one announcement.

From there, compliance is up to the employee as long as the original notice contains two things:

• the date you needed all completed paperwork turned in by, and
• a clear indication of the consequences (e.g., late fees or coverage denial) if they miss the deadline.

Most employees fall in line if their employer consistently enforces this policy. The key is to not give in to the whiners and excuse-makers.

Generation ‘Why?’

The youngest employees in the workforce – the 18- to 25-year-old group known as Generation Y – have proven especially hard to deal with. Statistics show 54% of these employees leave within a year of hire.

Their attitudes toward benefits, salary, recognition programs and advancement in the organization can often be summed up this way: “I want it all now. Otherwise, I’ll put on my MySpace page how horrible it is to work here. Then I’ll quit.”

How are some firms retaining their more productive Gen-Y employees? Three ways that work:

• immediate rewards. Young workers live in the moment, so empowering supervisors to give out small rewards on the spot (e.g., a $10 gift card or a comped work day) often goes over better than a larger holiday bonus.
• equal flex-time. First make clear if, when and how flex-time is given. Then offer it on the same basis to the recent grad as the soccer mom, and
• education. Creating Gen Y-specific education messages often pays off in better participation.
  Example: When doing 401(k) or HSA education, hammer home the fact that participants own these accounts and control the money in them.

The ‘grass is greener’ group

A third group that makes life tough on Benefits/HR are employees who grumble how inadequate their benefits and pay are compared with other firms.

“Salaries are too low here,” they moan. “And the health coverage stinks. The copays and deductibles are too high.”

The most common way to prove such notions wrong is to issue yearly total compensation statements. But you may also want to hold a benefits focus group, inviting workers to present specific ideas for improving the benefits package.

If the grumblers have a legitimate suggestion to offer, you can adopt it. If not, they lose their credibility with — and influence over — other workers.

Would folks prefer a higher salary or comprehensive health benefits from the company? And what do employees really want from managers in the organization?

A recent survey shed light on both questions: In one, three quarters of employees would rather have good health coverage than a higher salary. Asked how much more cash it would take to give up medical benefits, the median response was an extra $11,000 in yearly salary.

In terms of company culture, 92% say honesty from management is a major expectation, along with fair opportunities for advancement (89%) and trust from supervisors (87%). Less crucial, but still valued company-culture traits: emotional supportiveness (25%), flexible schedules (20%) and family-friendly programs (15%).

Relatively unimportant: widespread friendship and socialization with colleagues (3%) and explanations from upper management of the company’s long-term goals (2%).