Purpose
[Company Name] uses formal recognition programs, including lump-sum bonuses, incentive plans and nonmonetary awards, to motivate and retain valued employees who provide exemplary performance or meet specified targets. These programs are intended to reward staff employees whose achievements have resulted in a particular benefit to [Company Name].
Monetary Awards
There are two types of monetary awards:
- A lump-sum bonus to recognize a specific achievement or cost-savings.
- An incentive plan with clearly defined goals, pre-established criteria and regular payouts when goals are met or exceeded.
Nonmonetary Rewards
Nonmonetary rewards can take the form of recognition awards, career development opportunities, and attendance/travel/time off for special lectures, training programs and conferences.
These programs are not intended to replace informal and spontaneous recognition or praise of staff achievements and work performance. Informal recognition of employees should take place every day. Saying "thank you" to employees and complimenting an employee on a job well done are part of managers' and supervisors' responsibilities.
General Departmental Guidelines
Department directors and managers should reward behaviors and results that are tied to [Company Name] goals.
Specific selection criteria need to be established by the department, and all employees of the department must be eligible to participate. The human resource office must approve the departmental criteria before a formal recognition program is implemented.
Funding of program expenses is subject to company, state and federal guidelines applicable to accounting, budgeting, payroll, benefits, purchasing, and [Company Name] principles and practices.
Lump-sum bonus
There are two ways departments can exercise this method of recognition:
- Establish an award review committee to determine award recipients.
- Permit a manager the discretion to initiate an award for a specific employee, with approval from the department director and human resources.
All bonus award recipients must meet the following criteria:
- The employee's accomplishments exceed the normal standards/expectations for the job.
- The employee has fulfilled all normal job duties in addition to performing added duties to accomplish a special project or achieve a certain goal.
- The employee serves as a role model for others, displaying desirable characteristics such as outstanding customer service, positive attitude and team leadership.
The amount of a lump-sum bonus may not exceed [dollar figure] or [percentage] of the employee's base salary, whichever is greater. Decisions about the amount of a lump-sum bonus should be dependent on the nature and complexity of the accomplishment and the ability of the department to fund the award. Under special circumstances, with the president's approval, a higher bonus may be approved. (Documentation must be submitted to support such a request.)
The manager should clearly communicate to the recognized employee the specific outstanding achievements that led to the award.
Incentive plans
The department director and/or administrator must develop specific targets to be achieved for the incentive plan. Goals, pre-established criteria and regular payouts are essential components of this type of plan.
Managers should clearly communicate to the employee what the expectations are and the outcome for the incentive period.
Nonmonetary rewards
Noncash rewards such as recognition awards cannot exceed a value of [amount]. Awards may be either recognition gifts or recognition vouchers. These one-time awards are nontaxable.
Employee recognition vouchers are redeemable only at [Company Name], by the named employee, and cannot be redeemed for cash.
Examples of areas that may be rewarded include:
Outstanding achievements and accomplishments. Demonstrated and sustained outstanding achievements that consistently exceed goals and job expectations.
Teamwork. Acting as an exceptionally effective and cooperative team member or demonstrating superior interactions within and outside the company and the client population served.
Length of service. A commitment to [Company Name] through long-term service.
Procedures
Proposal submission
To establish and request an awards program, a department director or manager should submit a proposal to human resources that includes the following information:
- The name of the department proposing the program.
- The employees who will be eligible for the recognition plan.
- The type of award (lump-sum bonus, incentive, nonmonetary) that is being requested, and a description of the selection criteria for that particular award.
- If the award program is based on employees' meeting a departmental goal, indicate the goals.
- If the award program is based on employees' suggesting cost savings to the department, indicate the criteria to be used.
- If the award program is based on suggestions for increased productivity, indicate the criteria to be used.
- If the award program is for outstanding performance on special projects, indicate the nature of the eligible special projects and achievement.
- If there are other criteria to be used instead of the ones listed above, indicate what they are.
- The proposed amount or range of the employee's bonus or incentive award. (Cash awards cannot exceed [dollar figure] or [percentage] of the employee's base salary.)
- The total amount expected to be paid under the program.
- Signature of the manager who is proposing the program (if applicable).
- Signature of the department head who agrees or who is proposing the program.
- Signature of the senior management member who agrees or is proposing the program.
- A signature from the accounting office. Sufficient funds for the program must be budgeted by the department.
- Signature from human resources. This signature designates final approval of the program proposal.
Approvals and payments
Human resources must approve the departmental selection criteria before a recognition program is implemented.
- Monetary awards. After a copy of the recognition plan is on file with human resources, the department must initiate payment to individual employees through the additional pay process, identifying the approved plan. For employees in positions eligible for overtime, the rate for overtime worked during the bonus period will be adjusted upward by the amount of the bonus over all hours that were worked in the bonus period.
- Nonmonetary awards. After the copy of the recognition plan is on file with human resources, the department must complete an award worksheet to document the award and submit it to human resources. Payments for all other awards, such as equipment, pins or banquets, must be processed through the accounting office per established policies and procedures.
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