The COVID-19 pandemic forced many organizations to adapt their business operations — often to a remote setting — to survive. This has placed an added emphasis on the need for continued innovation across all levels of the organization. 

A recent WorldatWork survey, in partnership with Dow Scott, Ph.D., professor at Loyola University Chicago, shed light on this concept. The survey of 523 organizations conducted in January found that 45% accelerated or greatly accelerated their efforts at improving innovation over the past 12-18 months. What’s more, 53% of organizations expect to increase their current level of innovation investment and development in the next 12 months. 

Part of this investment is facilitated through employee rewards. The survey found that 41% of organizations reward employees who contribute to innovation with bonuses or incentives, and of those organizations, 84% report the effectiveness of these programs to be effective or very effective. A reported 37% of organizations also utilize non-financial recognition programs, which tend to be less effective than other reward programs. 

“Employees appreciate the opportunity to share their ideas and collaborate with others, at least initially. The motivation associated with this opportunity to participate depends, in large part, on whether their suggestions are appreciated (recognized), implemented and do not result in additional work for them,” Scott wrote in a recent Workspan Daily article. “Over time, however, involvement in innovation requires extra effort beyond what is required for their jobs. And if the company is making money from these ideas, employees will feel unfairly treated."

"One needs to consider how or if an employee benefits from advocating for a better product or service or a better way to produce that product or service." 

There were 20% of organizations that reported they do not measure innovation. However, the other 80% identified a variety of different metrics that are in place to measure innovation to determine rewards for employees. The most common way of measuring innovation is by assessing the level of customer engagement, satisfaction or retention (53%). Other common measures included: 

  • Number of innovative initiatives in the pipeline (i.e., new products, production efficiencies) — 45% 
  • Quality/value of potential innovative initiatives in the pipeline — 44% 
  • Potential or actual revenue/profit of innovative initiatives — 43%
  • Number of innovative initiatives implemented — 43% 
  • Level of employee engagement, satisfaction or retention — 31% 

“Measurement and rewards can help drive innovation by signaling priority and increasing motivation," said Sue Holloway, compensation and rewards content director at WorldatWork. "And this survey report is very helpful to HR professionals seeking to leverage their reward programs to encourage employee innovation and support an innovative culture.”

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