How to reward employees

How Should Companies Reward Their Employees?

How to reward valued employees is a complex undertaking. Some companies feel that a mere well-timed “thank you” is sufficient. Others will equate reward to compensation.

Still others think that simply working for the leader in the industry is sufficient and they don’t have to address discontent.

After all, what do employees have to complain about? The discontent will go away. But it won’t.

Compensation is important, but managers also need to create an environment that challenges employees with new opportunities to keep them motivated and that that prompts them to do a better job than necessary. People thrive on “stretch” assignments where they can learn new things and work with different kinds of people.

Having worked in corporate environments and now serving as an executive coach, I firmly believe that a balanced approach to rewarding employees is most successful and fosters greater communication among everyone.

Let me provide a story about what occurs when all the pieces do not come together, when the rhetoric and reality are not aligned.

Promises Not Kept 

A well-respected, long-term employee with a Ph.D., who was responsible for all operations leading to the production of a world-famous medication, was continually discontent. How he felt he was being treated was far different from the value he was told he added to the corporation.

Signs that caused him dissonance were:

  • He was never provided with the promised office other senior managers had.
  • His boss left him out of meetings, going directly to my client’s staff.
  • Other senior officers had open access to the EVP; my client had to make an appointment, which was usually canceled.

Against these perceived slights, he was a high performer:

  • Reviewed an FDA proposal that led to the FDA reversing its position.
  • New technology was adapted readily by his group and ahead of other peers across the organization.
  • He was the “go to” executive when difficult analyses had to be completed, and these normally required him to travel and work non-stop for weeks at a time.

Listen to Employees

All this leads to the question of why? My coaching focused on my client speaking up. I wasn’t sure he had made his discontent known with enough power and focus that senior leaders took him seriously or realized how unhappy he was.

Granted, the company had a responsibility to recognize and reward his achievements. They needed to take their promises seriously. In my client’s case, he did talk to senior management about getting an office, but it never happened. The company didn’t follow through on its promise.

Companies think they can get at employee discontent through employee engagement surveys. But often fearful for their jobs, employees aren’t always going to be honest in their responses. That’s because they’ve been over this road before when nothing changed after the last survey.

There is a gap between what companies promise and what’s real. There needs to be an honest dialogue about reward systems. Employees need to be heard about the rewards that matter to them – compensation, a positive work environment, ever-increasing responsibility, and the feeling they are part of the larger picture. They want to know that their personal effort is making a significant contribution to the company’s success.

Employees are talking and management needs to listen.

Frank FaethFrank has held senior positions for several of the most prestigious companies in the world, including JPMorgan Chase, MasterCard Worldwide and Marsh, Inc. He combines his business background with his coaching experience to help develop resilient, relationship-driven leaders, abrasive executives recognize and improve their behavior, transitioning executives create realistic action plans, and build productive relationships between technologists and their business partners.

Leave a Reply


  1. Breaking promises to an employee is one of the worst things an employer can do. It negates so much positive that could be going on between boss/employee and breaks trust. Employers need to see employees on the asset side of the balance sheet–not the liability side.

    • Hello Rose Mary – thank you for your comments. As you know, once you break a promise, no matter how big or small, you lose trust, and then the wall crumbles. Lencioni had it right that ‘trust’ is the foundation of great team work. Regards, Frank

  2. Employees should be rewarded for their comittment and hard work. This could be presented in a number of way:

    Bonus – money is always welcome particularly just before the Christmas period!

    Recognition in team meetings – who does not like a pat on the back in the presence of colleagues?

    An awards evening- an opportunity to dress up and walk on stage to receive a reward.

    • Hi Phoenicia,

      Years ago, I worked at a bank that had an annual gathering for the tellers who processed cash the fastest. It was an elegant night where people were thanked for hard work on mundane tasks that were the core to my company’s brand. The winners received monetary gifts. Years later, after a management change, the event was dropped, and the organization was never forgiven. Little things matter.


  3. If an employee is rewarded or not depends on the attitude of the management. If they are just looking after number one it’s unlikely they will be generous towards employees.

    • Hello Catarina,

      Management matters, and we can’t deny that. If you have a chance, take a look at SCARF, under David Rock’s work in neuro-leadership. That will go right to the heart of your comment, which I appreciated.


  4. Interesting post. I think it is very important for employers to be accessible and accountable to their employees. Employees should not be kept in the dark regarding impending changes, nor should they be deceived or lied to.

    • Hello Doreen,

      I think some managers, for many reasons, likely having to do with emotional intelligence (or lack thereof), think not saying something is the best response. But as we know, being open, transparent, and human make all the difference.


  5. Hi,
    I like the helpful info you provide in your Blog. It really explains everything in detail. Generally I never comment on blogs but your blog is so convincing that I can’t stop myself to say something about it. This is an impressive Blog Thanks!.

    • Thanks Manish. Yes, Jeannette does a wonderful job. She and I have known each other for years and she never fails to impress me with new views and openness. Glad to know you liked this blog as well, as it is an important issue, as you can tell from the other comments.