Employee participation / reward and recognition policy

A good reward and recognition policy can positively influence the workplace environment and boost employee performance as a result. Employees are rewarded for their commitment and performance. Usually this reward consists of salary supplemented by, for example, a performance-related reward such as a bonus and/or other employment conditions. Another example is facilitating (costly) further training.

There are various reasons for adopting some form of employee participation and these reasons are important in order to make the right choice among the different types. One important reason is recruiting new employees, but a reward policy will also contribute to employee retention (in today’s tight labour market, this is very important). Other reasons may be: letting employees benefit from the company’s value development, providing an incentive to increase the performance, enhancing employee engagement and the loyalty of (key) employees. Participation ensures that the employees themselves bear (a degree of) risk so that there is a so-called ‘skin in the game’.

Regardless of the reason, it is important to reward employees in a way that works and that fits in with (the culture of) the company and the employees. For example, a sales employee will be more interested in a commission plan, while employees within a startup are often offered a stock options plan. For the management, it may be more attractive to receive shares (flexible shares or share certificates). Also, Phantom Stocks or Stock Appreciation Rights (SARs) are becoming increasingly popular.

We can advise you on the form of participation that best suits your organisation, and we can give advice on which labour laws and tax legislation need to be taken into account. For example: the rules that apply to a commission plan are different from those that apply to a bonus plan, for instance with regard to the continued payment of wages during illness or when calculating the transition payment. Once you have made a choice, we will help you draw up the reward and recognition policy. We will also be happy to assist with its implementation in your organisation.