How to Retain Excellent Employees

EmployeesThis month we’re teaching you everything you need to know to make your employees love you.  If you missed our first two posts, catch up now by learning 7 Steps You Need To Take Before You Make Your First Hire and How To Attract Top-Performing Employees.

So now you know all about how to prepare to hire employees and how to attract the best of the best once you’re ready to hire. The question is, once you have the best employees, how do you keep them? What’s the secret?

Some companies swear their secret sauce to employee retention rests in their rewards program.  Why? Well, let’s explore that!

Why Employee Reward Programs Work

  1.  It puts the control in the employees’ hands. When employees are rewarded for their hard work, those that value being appreciated will be motivated to work even harder. One study of 1,000 U.S.-based, full-time employees found that 75% of employees who get management recognition monthly report job satisfaction. And like we’ve said before, happy employees are productive employees. And productive employees make company profits soar!
  1. It attracts better employees. Even if the base salary is lower than the industry average, if you have an excellent rewards system in place, the best employees will consider the full compensation plan rather than only looking at the salary itself.
  1. Employees are rewarded for the quality of their work, not just the quantity. Recognizing the employees who are doing the best work encourages everyone to step up their productivity and dedication on the job.
  1. It provides positive reinforcement. Everyone wants to know when they’ve done a good job. It’s human nature. This is the most powerful and effective way to motivate employees to keep working hard and to get other employees to work harder more consistently.
  1. It softens the blow of constructive criticism. There’s always room for improvement. When sincere praise is consistently given for good work, it makes it easier for your employees to receive constructive criticism.

The benefits to rewarding good work are obvious. But how do you reward your employees? Ultimately, the specifics of how you set up your rewards system is dependent on what works within your budget and logistics, but here are a few ideas you may want to consider when structuring your compensation and rewards system.

Keep it simple. Evaluate no more than 5 factors of your employees’ performance and clearly establish benchmarks that will result in rewards.

Offer meaningful raises. Don’t skimp your employees on raises; nothing will push them out the door faster! If you can, offer more to your top performers.

Consider offering stock options to employees who have been with your company for a predetermined time period (maybe 3 or 5 years).

Consider creating a bonus structure. Set up a system of predetermined, specific performance goals that, when met, earn the employee an annual bonus.

Make sure employees know what you expect. Set up SMART goals. SMART goals are: Specific, Measurable, Ambitious, Realistic and Time-bound. This allows employees to be clear on what is required of them and when.

Offer tuition reimbursement. This not only encourages employees to stay long-term, but also encourages them to continue their education so they can become even better employees and move up the ranks in your company.

Hire a human resources professional. As your company grows, you may need to consider hiring someone who will be able to focus all of their attention on overseeing your employees’ performance and managing your compensation and reward system so that you can focus on expanding your business even more.

High employee turnover can be devastating to a growing company. The more your company expands, the more you’ll need to have a great rewards system in place to make sure your employees are happy enough to stick around long term. Even if your business is small right now, it would be beneficial to outline the rewards system you’d like to implement as your company grows. Trust us, you’ll be glad you thought it through ahead of time!

Be sure to join us next week. We’ll be wrapping up this month’s series by talking about how to turn your employees into your brand’s best ambassadors.

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