Question: Can you provide ideas to consider for recognizing employees when they perform “above and beyond”?
Answer: When implementing any type of reward or incentive, it is important to be fair, nondiscriminatory, and ensure any gift is taxed appropriately. Companies are getting creative with compensation and incentives for employees. Incentive pay and other bonuses, though, can be a great motivator not only to the employee being rewarded but to other staff as an incentive to enhance their performance to similar levels. When employees see the effort their employer makes to provide recognition and positive changes to their pay, it will go a long way to increasing productivity and morale, and therefore profitability.
The potential negative to some awards is the taxation requirement (some companies will any monetary awards to ensure the award is not received with any negative consequence). “Grossing up” is a phrase used to describe the total amount of funds to be authorized as a cash award so that the net amount after required tax withholding will be an exact amount — usually an even dollar amount — that the employee is intended to receive.
A company’s investment is its people, and successful companies often recognize this.
Some suggestions for rewards are as follows:
- Paid day off.
- Monetary gift.
- Gift card (movie, dining, amusement, etc.).
- Expense paid family day vacation.
- Company branded gifts.
- Employee of the month, quarter, or year awards.
- Spotlight acknowledgement to others (newsletter, internal website, etc.).
Be sure that any incentive or bonus plan is outlined in policies or in your employee handbook and is communicated to all employees, and consult your tax advisor with any questions regarding proper taxation.