A recent survey by Gartner asked IT pros to rate which benefit was most important to them, and most likely to keep them in their current jobs:

1. Job security
2. Company-funded training and certification courses
3. Flexible work hours, or
4. Recognition from upper management.

The results: 35% said job security was number one. Training and flexibility came a close second and third, respectively, with 32% and 31% of the votes.

Very few (2%) feel recognition is most important.

These days, job security can’t be easily guaranteed, and there’s little room in most companies’ budgets for extra training. But flexibility is a cheap benefit that can be offered in many cases. And going the extra mile to provide training could worth it in some cases to retain top-performing employees.

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.

However, the same study found that only 21% of those employers believed their employees had a strong understanding of the workings of their own benefits.  And 5% believed that their employees didn’t know anything about their benefit options.

Implication: The greater emphasis placed on employee education, the more likely workers understand the role of benefits in total compensation.

Recognition is like a small drop of oil in the machinery of business. It just makes things run a little smoother.
– Obert Tanner

There is always a better way.
– Thomas Edison

Have confidence that if you’ve done a little thing well, you can do a big thing well, too.
– David Storey

To improve yourself, do something for someone else.
– Anonymous

Equipment, procedures – those things can be duplicated. Human capital is the only area where companies can really differentiate themselves.
– Meldron Young

There is someone at work who encourages me.
– A top-10 answer on the Gallup Poll of why people like their jobs

Can we fix it? Yes, we can!
– Bob the Builder, cartoon character