Employee Rewards: How to Evaluate Performance & Encourage Better Work

employee rewards

Gabe Nelson is a content specialist of over 7 years of experience, currently working with He has a passion and keen understanding when it comes to HR, employee management, and employee rewards. He has written hundreds of content pieces in numerous niches. Currently, he lives in Missouri with his wife and kids.

Your employees are the lifeblood of your business. They provide the support and manpower you need to function and grow. The level of success and the results you achieve will directly reflect the performance of your employees.

Satisfied employees are also more productive and efficient. However, a study showed that as much as 85% of employees are happy with their jobs and only 15% of employees are engaged in the workplace. Happy and engaged workers are more likely to feel personally invested in your business, leading them to work harder and smarter; this results in better products and more satisfied customers.

It’s also vital that employees know where they stand. Not receiving a promotion or a much-anticipated raise because of performance shouldn’t be a surprise to them. Conversely, they should also receive positive feedback for a job well done to keep them moving on the right track; this means that evaluating employees’ performance is an essential role of leadership.

So how do you guarantee an employee’s role is as fulfilling as possible? And how do you communicate how well they are doing in their roles?

In his Process Street article, we’ll be covering:

Let’s jump right in!

Evaluating employee performance

employee rewards

Completing employee reviews and giving feedback can be a touchy subject. The whole process can quickly become political and leave many with hard feelings. Take the awkwardness out of the whole situation and revamp your system to make it more enjoyable and effective.

You can solicit employee feedback and create a culture of honesty for authentic communication. A clear and objection recognition and evaluation system can let employees know where they stand. Thinking outside the box and being upfront and honest eliminates stagnant and frustrating recognition systems.

Want accurate feedback? Ask peers for help

One way to keep yourself on your toes as a leader is to implement a peer review system.

Complete a performance review metric on an employee. Then, ask their colleagues to fill out the same metric for their peers. If you see glaring disparities, it may be time to check yourself and make sure you’re truly being objective.

This system has a lot of great benefits when implemented correctly. For one, it encourages employees to stay on their game even when their boss isn’t watching. On the other hand, it also means that the great things they do when their manager isn’t around are recognized.

This system also leaves the door open for bias and negative impacts on morale. Take a hard look at your workplace culture to decide if this is the best route for your group of employees. Be sure to conduct peer reviews in a way that allows for objectivity and anonymity.

Peer reviews also mean that all aspects of an employee’s performance can be evaluated. Sometimes, as a manager, you don’t have insight into things like teamwork and cross-department communication skills. Peer reviews allow an inside look into the day to day performance of your employee.

Leaders often haven’t had the chance to work in every role that they manage. By having peers reviewed by those with first-hand knowledge of the job’s responsibilities, you receive some accurate feedback concerning performance. This gives you, the leader, the chance to address any opportunities to improve or to call out any ways employees are going above and beyond.

Honesty is the best policy

employee rewards

As in many areas of life, the old adage “honesty is the best policy” rings true with employee performance evaluation. Sure, it might seem tempting to sugarcoat a bad review to avoid an awkward situation. But you aren’t doing you, or your employee, any favors if you aren’t entirely candid about their performance.

Being honest about where employees have room to grow can pay off in the long run. If you see an issue, address it early and candidly. Be truthful about your concerns and let employees know how they can improve to remedy the problem. This honesty can even strengthen the employee-manager relationship.

Having transparency about employee performance is a two-way street. You want your employees to be open and truthful with you as well. Only 49% of employees report having a great deal of trust in their employers. Being up-front with them will help them develop the trust they need to be honest with you in the future.

Ask employees to be truthful with you about any hurdles they are encountering that are affecting their work performance. Maybe they had a shift in their family’s routine and could benefit from more flexible work hours, or perhaps they’re experiencing emotional distress and could use a few vacation days to recharge.

Knowing that you honestly care about them as a person, not simply their work performance will encourage them to be truthful. The sooner you can find a solution, the sooner you can help them get back on the right track. Together, your resiliency will help them become a better worker that is proud to strive for better performance.

Have an open-door policy to encourage authentic communication

Having an open-door policy is an essential part of being a leader and fostering authentic communication with your employees. They need to know that you’ll be there for them when they need you. Be sure to engage in active listening to truly understand and address their needs. Employee engagement surveys are another great way to understand your employee’s needs, feedback on the work culture, or other concerns.

Because of the nature of your workplace or role, it might not be possible to be available at all times. Consider open office hours where employees know that they can sit down with you and speak candidly. This process will go a long way in developing trust and a steady stream of useful dialog.

Gather feedback from the customers you serve

Chances are, you’re in business to serve customers. After all, you can’t make revenue without them. So why not ask them for feedback on your employees? This is a great tool to evaluate customer-facing employees and their performance.

Reach out to regular customers with a standardized form or access to an online survey to collect feedback on their interactions with your employees. A short email survey can be an effective way to communicate. A small subset and a few questions can be enough to start to notice some trends. This will give you some great information to coach your employees to stellar customer service.

Customer service requires a holistic approach. You might have an employee that’s doing everything right by the books, but after you solicit feedback, you find that customers find interacting with this individual cold and unwelcoming. This is a perfect coaching opportunity to encourage a more personable attitude.

On the other hand, you might have a team member with less than impressive productivity and efficiency. However, they may be excelling in different ways like developing great relationships with customers. In fact, they might be the reason that many of your loyal customers stick around. You likely would have never known this without the valuable feedback from customers.

Not only will this feedback allow you to evaluate individual employees, but you’ll likely find new ways to improve customer service as a whole. You might find some gaps in your current process that you were unaware of. Collecting customer feedback has the potential to make your whole team able to better serve your customers.

Start by asking employees to self evaluate

Before you sit down with employees, ask them to take a good look at their performance. This can help avoid some awkward disagreements. It can also be a good way to remind them of their roles and evaluate how they are meeting their responsibilities.

A good way to begin this process is by providing them with their job description. Whether they were hired for this role or promoted into it, it has likely evolved since it started. Taking a good look at their original job description serves as a good reminder as to why they were chosen for their role to begin with.

This can also give them a good chance to reflect on all of the responsibilities of their position. Maybe they were so focused on growth in one area that they neglected a small component of their role. If they have been in the same position for a long time, a good refresh can help them renew their perspective to take a more balanced approach to their role.

Then, provide a review metric the same or similar to the one you will be completing about them. This will provide perfect material for open and honest communication. It will also allow employees a way to communicate the areas that are a priority to be recognized in.

Go over the materials together and point out any differences in your feedback. Maybe your employee doesn’t think they have been doing so well in an area you feel they are strong in. 33% of employees rate their own performance lower than their managers rate them. This surprising encouragement can be motivating and rewarding to those that don’t think they are performing up to par.

There might be an area that an employee is already aware that they are struggling with. By pointing it out proactively in their own review, they provide the means to have an open dialogue about it. Knowing that they accept that this is a need for growth will allow you to work together to develop a plan to improve together.

Creating a recognition system that perfectly fits your employees

employee rewards

Collecting and communicating employee feedback is just one piece of the leadership puzzle. A staggering 79 percent of people leave their jobs for lack of appreciation. So you must take the information you have gathered and use it to recognize and reward employees for their hard work. The trick here is creating a system that meets your team’s needs, as well as the individual needs of your team members.

You don’t know if you don’t ask

We all know The Golden Rule: treat others as you want to be treated. But if you want to be a strong leader, this attitude simply isn’t enough. Everyone has different outlooks and priorities. To be effective, your goal should be to treat your employees how they would like to be treated.

One of the best ways to find out if your employees are happy with the current reward structure is to simply ask! A simple survey or email can help you get a feel for how satisfied they are with how they are being rewarded. Anonymous surveys can provide you with more honest information about how employees truly feel.

Allow the chance for open and honest feedback. Maybe an employee feels that their bonus isn’t enough to reflect their level of work. Perhaps they would rather receive rewards in the form of paid time off instead. No matter how your employee is feeling about their bonus, you won’t know if you don’t ask.

Break the mold and make it special

Who says performance reviews (and raises!) have to be annual? Maybe smaller, more frequent bonuses would be preferred by your team. While it requires a little extra coordination and work, the smaller bonus amounts would be less of a hit on your cash flow. It can also allow you to monitor performance and tweak bonus amounts more often to reflect the quality of work.

Little rewards go a long way in showing your team that their hard work isn’t going unnoticed. Maybe they hit a big goal. Cater a team lunch to celebrate. Working remotely? Coordinate a virtual happy hour and send an e-gift card to employees for their favorite store.

Make rewards as unique as your employees

employee rewards

Again, employees want to be treated as individuals. Rewarding them doesn’t work using a one size fits all approach. Individualizing rewards make them much more special and appreciated.

One of the best ways to do this is by allowing them to choose their own reward. Develop a point system reflective of attainable work goals. To make this work, these goals need to be clear, fair, and measurable.

Goals could be anything from sales goals to meeting deadlines. Points could be earned by getting kudos from the new big client or landing a new contract. Track points as employees earn them and work towards predetermined reward levels.

Then, give these employees the chance to reward themselves for their hard work. Maybe they want to spend their points on a gift card or fancy new pen. You might have employees that simply want an extra afternoon off or extended lunch hour. Either way, with their eyes on a prize they truly want, they’ll work much harder towards their goals.

Avoid unwelcome surprises by being upfront

The last thing you want is disgruntled employees reacting to unexpectedly canceled bonuses. Don’t leave your employees hanging. Let them know exactly what to expect, and when.

Sure, your business’s bottom line fluctuates. Of course, you strive for steady growth, but sometimes the economy has other ideas. Unfortunately, sometimes this results in you not being able to provide your employees with the level of rewards you would like.

Be upfront and honest with employees, especially if you have been consistently handing out rewards or paying annual bonuses each year. If a downturn means that you’ll have to delay or decrease what you can provide, let them know ASAP.

Your employees will appreciate your honesty and your candor will soften the blow. Explain that you hope to get on track as soon as possible. Make sure they understand that they are still appreciated and the decrease isn’t a reflection of their performance.

Managing and motivating your employees for success

employee rewards

No matter what kind of evaluation plan you land on, the most important factor is objectivity. The process must be clearly defined to eliminate any possibility of favoritism. Employees want to be treated fairly and know their work is just as valuable as their coworker in the next cubicle.

If your plan has a flexible bonus structure, make sure the amount is measurable. It should directly reflect an employee’s performance. This can be determined by a fair and honest review metric.

A transparent plan can ensure employees that they are being treated fairly. It also lets them know what to expect. It can also be rewarding to know that their hard work and dedication are noticed by others aside from their direct leadership.

You might just be getting started in developing a reward structure. Maybe you have been doling out bonuses according to a set plan for years. Either way, you can utilize some strategies to ensure that your efforts are as effective as possible.

Your employees are special. They make your business what, and who, it is. Taking the time to evaluate their performance, encourage them, and helping them to improve is well worth the effort. Rewarding them creates a culture of appreciation and teamwork.

Make sure you’re thoughtful and careful about creating your feedback plan and selecting your reward strategy. Use both to inspire employees to feel and perform at their best and you’ll create happy employees that are excited to do big things for your business.

Have you implemented an employee reward system at your workplace? How do you keep your employees motivated day to day? Let us know in the comments below!

Get our posts & product updates earlier by simply subscribing

Oliver Peterson

Oliver Peterson is a content writer for Process Street with an interest in systems and processes, attempting to use them as tools for taking apart problems and gaining insight into building robust, lasting solutions.

Leave a Reply

Your email address will not be published. Required fields are marked *

Take control of your workflows today