Compensation Management is something that major corporations spend significant time and energy on.
Managíng recognition and rewards is challenging not only because there is a lack of transparency (what does the competitor offer), more so because people have different priorities and value different things. Even more importantly, as noted by Porter & Lawler, it the relationship between rewards, motivation and performance is utterly complex.
Therefore, it makes sense to reverse the question “what kind of rewards will motivate my employees” into “what kind of employees will be motivated by the rewards we want to give”. If your employees are only motivated by extrinsic rewards like huge bonuses, do you have the right employees? How much more will it require for the competitor to pursade these employees to change their job? Maybe you should just let them go…
In opposite, Employees that are mainly driven by intrinsic motivational factors, and value appreciation and small rewards are much easier to motivate and retain. And the good news is, most people do.
Telling people that they did a good job, and giving them a small gift of appreciation is a simple formula that cannot fail, in particular if it becomes an integral part of the culture. Who will you show appreciation today?