ADP: Leveraging Financial, Nonfinancial Bonuses for Strategic Employee Engagement

Rewards and recognition is a critical part of sustaining employee engagement practices.

(Originally published on ADP's "Spark")

Variable pay is in place at more than 80 percent of organizations, according to the Society for Human Resource Management (SHRM). This means firms are leveraging financial and nonfinancial bonuses to go beyond base salaries and discover ways to reward workers andencourage behaviors strategically.

Knowing the Importance of Reward and Recognition

The deliberate application of rewards and recognition is a critical component of sustained employee engagement practices. For many organizations, this brings to mind a stand-alone bonus program or the latest recognition tool.

According to the 2016 ADP Employee Engagement Study, (ADP is No. 21 on the DiversityInc Top 50 Companies list) 66 percent of millennials, 62 percent of Gen Xers and 57 percent of baby boomers are more likely to be motivated by financial rewards. Interesting to note, however, is that, even though financial rewards are motivating regardless of age, non-financial rewards such as praise and peer recognition increase motivation as age decreases.

But the reality is a blended approach may be best for meeting the diverse needs of workers and keeping costs reasonable. In addition, with the rise of the millennials and an increasingly diverse population in the workforce, firms need to find flexible ways to meet the variety of worker needs by establishing a culture of recognition.

Blending Your Approach

As SHRM notes, 90 percent of organizations use more than four methods of rewarding employees, including cash bonuses or extra paid time off. Financial and nonfinancial bonuses offer a variety of options to reward, recognize and ultimately engage employees. Being able to flex the approach to meet the needs of the workforce is where the value comes in. A blended approach can bring in not only executives and managers, but also co-workers. Peer recognition, or the option of allowing someone's team members to offer recognition for good work, allows managers to get a broader view of an employee's performance while still rewarding the worker for a job well done.

Implementing an Approach

A common mistake when developing something like this is to label it as a "program." While there are some aspects that fit that definition, this really needs to be a culture shift. According to WorldatWork, creating a culture of recognition was one of the top three priorities for businesses seeking to improve their approach. The purpose of seeking culture change instead of a new program is twofold:

  1. Unlike many programs, culture adoption doesn't have a specified end date.
  2. Culture shifts are embedded across the organization's practices, not narrowly confined to one area.

Coaching Your Team

An effective way to help coach your executive team on how to adopt a culture of recognition could include the framework called "GIFT," which stands for:

  • Give regularly, even if it's not always monetary
  • Incentivize behaviors that you want people to exhibit over and over again
  • Find opportunities to recognize good work
  • Treat employees differently — not everyone wants a public celebration or a plaque on the wall

GIFT — it's simple, which is what can matter most in this approach. Creating a complex program with dozens of rules and options can stall out the effort before it gets any momentum.

Meeting Diverse Needs

In the book "Giftology," John Ruhlin talks about his experience trying to propose to his fiancee. He created an elaborate scheme, including dressing himself as an old man, creating props and scheduling secret plane flights. In the end, the master plan didn't work out, and he came to realize that the idea was well-suited to his own tastes for adventure and intrigue but didn't fit the down-to-earth preferences of his future bride. The lesson he learned was a powerful one — we should each look for chances to give what others want, not what we want for ourselves.

This can apply equally in the workplace when it comes to financial and nonfinancial bonuses and rewards. For instance, millennials don't care only about compensation when looking for a new role. Harvard Business Review notes that for millennials, learning opportunities are the most desirable aspects of a new employer. While this is a nonfinancial opportunity, it has the ability to drive incredible value for this audience.

Delivering an employee experience with the right mix of rewards, recognition and opportunities is part art and part science. The important lesson is to start simply, weave the practices throughout the organization's culture and look for ways to meet the varying needs of your diverse employee population.

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Originally Published by ADP.

Changes in talent demographics, working arrangements and technology are impacting how employees need and want to be paid. To meet these shifts, paycards and digital accounts are increasingly becoming attractive options, allowing employees to access their pay how and when they want. Additionally, employers now have the opportunity to take an active interest in the financial wellbeing of their workers to help them get the most out of their pay.

ADP is continuing its innovation momentum by revolutionizing the way people are paid by introducing Wisely Pay by ADP. Wisely Pay is the next step in ADP's constant evolution to put clients and their workers at the forefront of macro trends shaping the employment landscape, including the growing number of freelance individuals.

"The world of work is changing and our clients look to us as the market leader in payments, to help them better engage with their entire workforce," said Doug Politi, president of Compliance Solutions at ADP. "Wisely Pay is leading the way people get paid in the future as a true bank alternative, with innovative services like instant pay, savings, digital wallet, and other financial management and wellness features that are better aligned with the evolving workforce."

The functionality of digital accounts, including paycards, and ease of access to funds have made them particularly popular among Millennials. According to a recent report commissioned by ADP, almost half of Gen Z (47 percent) and nearly a third of Millennials (31 percent) would turn down a job if they were unable to choose their method of pay. Additionally, this report revealed that 47 percent of Millennials and 66 percent of Gen Z have used a pre-loaded payment card in the last 12 months.

Wisely Pay is the first offering resulting from ADP's acquisition of Global Cash Card and provides the administrative tools and support to enable employers of any size, industry and workforce blend of full-time, part-time and/or freelance workers to enjoy:

  • Advanced technologies: Best-in-class experiences for cardholders and administrators from ADP's in-house digital payments platform, built by Global Cash Card and ADP's award-winning Instant Funding APIs.
  • Pay flexibility: Wisely Pay offers multiple ways to receive, spend, and manage money, including fully electronic options like peer-to-peer transfers, instant pay, and mobile digital wallets by Apple Pay®, Samsung Pay® and Android Pay®.
  • Attracting and retaining talent: The multi-generational workforce places unique demands on employers and Wisely Pay helps satisfy the needs of workers by offering a banking alternative with numerous funding options, easy cash access, broad purchasing capability, ability to avoid paper check fees and modern financial management tools.
  • Peace of mind: With a 50-state electronic pay program, backed by market-leading expertise and experience in the regulatory landscape, employers can rely on ADP Compliance Solutions, advanced data security and single point-of-contact resolution for all employer support or cardholder issues (e.g. fraud prevention, dispute resolution).

The Wisely paycard will first be available to employers who select to offer sponsored accounts for employees in September 2018 in the United States.