Rewarding Innovation in the Workplace: It’s Not Just Money, Honey

An Incentive to be Inventive

Rewarding innovation in the workplace is essential in developing successful businesses and retaining good staff. But how do you inspire employees to innovate, when they’re feeling jaded after months of pandemic uncertainty? It can be a challenge to re-engage people and fire them up to think creatively.

In this article, we look at what innovation at work means, and the different aspects of encouraging and rewarding it. It’s not just about the rewards, there’s the appreciation from leadership and crucially, peer recognition. Not everyone gets the chance to innovate spectacularly, of course, because of the nature of their job, or their expectations. But if your team makes significant business improvements, you should recognise them. That means all your staff! Whatever your people’s roles, if they’re innovative, reward them and show your appreciation.

Rewarding Innovation isn’t Rocket Science, it’s For Everyone

It’s important to be clear what we mean by ‘innovation.’ If your business is literally rocket science – or medicine, tech, electronics, or whatever – you’re making breakthroughs every day. There have been court cases about whether innovations made in the course of employment are the employer’s property. But we digress. It’s only right and proper to recognise and reward individual excellence. Whether your business is large or small, you need to reward your team members and build innovation into your culture.

If Your People are Innovative, it’s Good for Everyone

At the heart of rewarding innovation is the principle of making staff members feel valued and appreciated for their achievements. Research shows businesses whose team members are engaged and think innovatively, are more profitable.  And they keep good people for longer, which is a challenge for many businesses at the moment.

Getting individuals to feel confident about sharing their ideas is a sure way to engage them in the innovation process. But inspiring them to do so can be hard going, especially less extroverted individuals. Some may be reluctant because they don’t want to face possible criticism from bosses and mockery from colleagues. Others may not want to stand out from the crowd. But both groups may well have the ideas you’re looking for, especially the quieter ones.

Don’t be a Rubbish Motivation ‘Expert’ Like David Brent in The Office

In rewarding individuals publicly for innovation, you’re also encouraging other employees by showing how you recognise achievement.  Doing this will develop your business’s innovation culture, and help you move forward. And don’t forget the word of mouth aspect in this. People talk to their friends outside the company, and your reputation as a good employer spreads.

And remember this. How you go about rewarding innovation calls for emotional intelligence and understanding the sensitivities of individual team members. The last thing you want is for the people you employ to cringe with embarrassment when you single them out for praise! And leaders need to be mindful of people’s sensitivities. Ask yourself, how would you like to be talked to like that?

We Need a Strategy in Place for Doing This

How do you Reward Innovation at Work?

Businesses go about rewarding innovation in a combination of ways:

• Personal appreciation.
• Public recognition.
• Gifting.

Public recognition is good for people’s morale. We like being acknowledged by our peers. And gifting brings monetary rewards, enjoyable experiences, and other good things. But probably the most important part is personal appreciation from the leadership.  This costs the least out of these elements in cash terms, yet validation from people we respect is what counts most. We remember appreciation of our achievements when everything else is forgotten.

Now let’s look at these different elements of recognising and rewarding innovation.

1. Personal Appreciation

This starts with the leadership making the personal connection:

• Tell the person concerned that you appreciate what they’ve done.
• Give them a handwritten thank you note – not an email!
• Talk about the opportunities open to them to develop further in the business.
• Offer them personal mentoring, to encourage further innovation.

2. Public Recognition

Now we move on to celebrating the innovative person in the eyes of their peers. The options for recognising individuals publicly include:

• Expressing your appreciation with a public thank you.
• Having a team celebration for that person.

What you do after that depends on your business culture, of course, but you could:

• Feature employees’ achievements on the company blog, newsletter, or LinkedIn.
• Have an annual company awards night.
• Make a ‘thank you’ video.
• Put up wall plaques for achievements.
• Run an employee of the month scheme.
• Have a company wall of fame.

3. Gifting

As we mentioned earlier, the gifting part is probably the least meaningful bit in all this. The person on the receiving end will know it comes out of the business as an expense, after all. But it should still be commensurate with the person’s achievement.

Tried and tested rewards include:

• Cash rewards.
• Time off with full pay.
• Covering commuting costs.
• Meaningful gifts.

Many specialist incentive marketing companies excel at sourcing gifts that people appreciate. Give them a brief and a budget, and they will respond.

Popular gifting options include:

• Experience rewards: VIP packages to concerts, theatres, and sports events: driving days, hot air balloon rides, spa days, and other premium experiences.
• Luxury leisure breaks for the recipient and a partner.
• Gifts of personal technology.
• Subscriptions to Netflix and other things.
• More creative gifts, based on your knowledge of the recipient, including gym or sports club memberships, hair do’s, makeovers, chair massages.
• Sending people to training events that make them feel really appreciated.

Gifting for teams who innovate or achieve business improvements can include all these things and also team outings, group field trips, cash rewards, a gift for their office. How about a posh coffee machine? Or a fully stocked beer fridge or ice cream vending machine on free dispense? 

Rewarding Innovation at Scale – a Lovely Problem to Have

Employees may come up with major innovations that transform how the company does business. This calls for a different level of reward :

• Large bonuses.
• Significant pay rises.
• Extended holidays, and expenses paid (COVID restrictions permitting…).
• ‘Trophy’ company cars.
• Shares in the company.

As mentioned previously, inventions or business improvements made in the course of employment remain the property of the company. But it’s only fair to recognise and reward individual or team achievement. And of course, you should offer the individuals promotion and opportunities for advancement. Or chances are they’ll leave.

Building a Culture That Champions Innovation

In many famous companies, the people at the top are highly visible and champion innovation.  Here are some winning tips to emulate them:

• Be open to new ideas: If one of your team comes up with a good idea, why not develop it!? Let them be actively involved in taking the idea forward. This builds their confidence and makes them feel validated. And your other employees see you value your people and believe in their ideas.
• Have a creative culture: Encourage team members to feel welcome to put forward new ideas and share them with their colleagues. People who feel free to think independently are likely to do so. But if they don’t feel free, it won’t happen! Giving people ‘permission’ to be innovative makes them confident in their creativity. If they’ve previously felt held back, now they will feel less anxious about how their ideas will be received.
• A key part of innovation involves solving problems by thinking differently. When people come up with different ideas, don’t see it as conflict, welcome it! Supporting innovation transforms the working atmosphere, and makes good people stay longer.
• Explore ways of making work more flexible: This can include “obvious” things like working from home and flexible working hours. But it also includes welcoming people to brainstorms and offering training and access to webinars and developmental conferences. And letting them see other parts of the business. All of this means they can reflect on their current role, and think about how to do it better.

Encouraging Innovation Means Rethinking Your Management Style 

You need to get everyone in the business thinking about innovation.

1. What the Leadership and Management can do

• Adopt a non-hierarchical management style. A flat structure demands a hands-on approach from everyone.
• Incentivise staff to think about innovation. This comes back to a clear reward scheme.
• Support your staff in taking ownership and responsibility for new ideas.
• Empower employees to think about tough problems and solving them creatively.
• Find and motivate the natural entrepreneurs who ”just happen” to work for you.
• Encourage people to think about innovation every day, not just in occasional workshops.

2. Put Innovation Strategy at the Heart of the Company

• Make innovation a strategic part of what your business is about. That way everyone sees the link between your innovation strategy and their job.
• Develop an innovation strategy and use it. This means senior managers thinking in clear terms what innovation means to them. They also need to be specific about how they expect individual employees to make innovation part of their job.
• Talk to everyone about innovation. Take inspiration from the builders of the world’s great businesses, not just the tech and ecommerce stars! Many have turned their businesses into campus-style operations, where fresh thinking is valued above all.
• Accept the possibility of failure: Take out the drama and encourage risky initiatives, to help employees approach innovation in a more, open way. Many big food and drink brands have plenty of failed products behind them, but keep going. Crack on!

3. Be Willing to Experiment: Develop Your Appetite for New Ways of Doing Things

• Explore market ‘adjacencies,’ closely related to your current business but different enough to be new.
• Embrace co-creation in projects with your customers and supply chain partners.
• Take part in local innovation hubs: many parts of Britain have these.
• Join relevant trade associations and bodies for your industry and get networking.
• Go on webinars covering your sector, and learn from peers.
• Upgrade your skills in developing areas like digital marketing.

4. Be Open in your Communication About All This

• Let your staff know your senior management are open about the need for innovation and the potential benefits. This will confirm you are serious about having an innovation culture.
• Be transparent: Make your innovation goals clear, as well as the potential benefits for employees.
• Think about how you are going to do this, and be willing to be flexible.

5. Support your Staff ‘s Wellbeing

• Make sure your employees don’t feel threatened when they’re being creative.
• Ensure psychological safety: employees don’t want to feel their attempts at innovation will put their jobs at risk if it goes pear shaped. Think back to those big brands that launch products that fail, but bounce back.

6. Make Work Welcoming

• Changing your office design and layout helps make it a place where people feel encouraged to pool ideas and knowledge. In particular, encourage informal meetings and information sharing.
• Give your staff the right tools to create: provide them with project management software and online collaboration platforms. Think beyond Zoom and Teams!

AND FINALLY:  Encourage Innovation, But Remember to Lead it!

If you’re feeling inspired about all this, here’s a checklist you might find helpful:

9 Specific Ways to Recognise and Reward Employees for Innovation

• Make it personal: Be specific, personal and accurate in praising innovation. Use positive words and show you understand what they accomplished!
• Big up the recognition: Saying ‘well done’ in-person matters most of all, but saying it in front of their peers matters a lot. Confirm their achievement using your internal media.
• ‘Gamify’ the process: Building elements from games and sports into rewarding innovation can motivate some people to achieve. A trophy that goes around the company can generate enthusiasm far beyond what it cost to buy. The more impressive the trophy, the more it will inspire!
• Give people a chance to shine: Not everyone gets the opportunity to innovate at work, because of the nature of their job, and their expectations. Whoever they are, if they innovate, reward them and show your appreciation.
• Promote peer recognition: People often prefer being appreciated by their peers to acknowledgment at the office or wherever. Many progressive companies recognise this and use peer to peer recognition to engage particular groups. Think about how to support these creative colleagues!
• Recognise serial innovators: Consider special privileges for employees who consistently innovate or come up with improvements. These might include a better parking space, or premium-grade career coaching.
• Money motivates: Cash and other rewards aren’t always the best motivators for innovation, because they can create anxiety around failure. But they do demonstrate your appreciation of achievement in tangible terms.
• Make innovation exciting: Inventiveness doesn’t come in standard measures! Besides cash, also think about special awards like holiday gifts in recognition of achievement. The best incentives are open-ended and unpredictable. It pays to be generous…

Parting Thoughts

It’s easy to get carried away with all this, so keep a sense of perspective. Don’t do anything you aren’t comfortable with. Remember, you’re still in charge.

And now, a few last pointers. Reducing workplace hierarchies in the name of innovation needs a trusting approach to management and commitment to hiring motivated people. And most of all, it needs focused leadership. To encourage employee collaboration, balanced with maintaining individual accountability and leaving space for those who work best alone.

But before you commit to seriously experimenting with innovation, make sure your core business is solid. Then, once you’ve done that, you’re clear for take-off!