Over 50% New Zealand employees doubt fairness of workplace reward systems: Survey

More than half of employees in New Zealand are sceptical about the fairness and effectiveness of their organisation’s rewards and recognition programs, according to the TELUS Mental Health Index for January 2024. 

This scepticism is highlighted by the fact that 28% of employees express uncertainty about the fairness and bias-free nature of these programs, while an additional quarter outright believe these programs are unfair and biased.

The TELUS Mental Health Index, a comprehensive report analysing mental health trends and factors influencing employee well-being, reveals a significant disparity in how rewards and recognition are perceived. 

While 47% of employees believe their company's rewards and recognition programs are fair and unbiased, this leaves a notable majority who are either uncertain or convinced of the opposite.

The report shows that employees who trust their organisation's recognition programs have the highest mental health scores, averaging 64.4. In stark contrast, those uncertain about the fairness of these programs have a mental health score of 56, while those who firmly believe the programs are unfair score even lower at 54.4. 

These findings underscore the correlation between perceived fairness in recognition programs and overall employee mental health.

This scepticism towards rewards and recognition is further complicated by the rise of "shadow contributors" in the workplace. These are employees who feel their contributions go unnoticed and unacknowledged. 

According to the Achievers Workforce Institute (AWI), the number of shadow contributors globally increased to 17% in 2024, up from 10% in 2022. This growing demographic reflects a significant issue within organisational recognition strategies.

AWI’s research points out that 40% of employers admit they are not realising any business gains from their current recognition programs. This admission suggests that many existing programs may be misaligned with organisational goals or inadequately implemented, failing to deliver the intended motivational and business outcomes.

Hannah Yardley, Chief People and Culture Officer at Achievers, emphasised the need for a strategic overhaul of recognition programs. "HR pros: if your recognition budget is robust but you're not seeing business benefits, reset your program," Yardley stated. 

She advised organisations to first identify their business objectives, align their recognition programs with these goals, and then measure the impact. This targeted approach aims to ensure that recognition efforts genuinely contribute to both employee satisfaction and business success.

The implications of these findings are significant. For employees, feeling undervalued or unfairly treated can lead to disengagement, reduced productivity, and higher turnover rates. For organisations, this represents a potential loss of talent and a decline in overall organisational performance.

Companies that succeed in creating fair and effective rewards and recognition programs can expect not only enhanced employee well-being but also improved business outcomes. Ensuring that recognition is meaningful, timely, and aligned with company values and objectives can foster a positive work environment where employees feel valued and motivated.

The TELUS report's findings on mental health scores in relation to recognition programs highlight a crucial aspect of employee well-being. Employees who perceive their recognition programs as fair tend to have better mental health, suggesting that fair recognition is a key component of a supportive work environment. 

Conversely, perceived unfairness can contribute to stress, anxiety, and other mental health issues, further impacting employee performance and satisfaction.

As organisations navigate the complexities of employee recognition and its impact on mental health, it is clear that a one-size-fits-all approach will not suffice. Tailored strategies that consider individual contributions, align with organisational goals, and foster an inclusive culture are essential.

Organisations should regularly review and adjust their recognition programs to ensure they remain relevant and effective. Engaging employees in the design and implementation of these programs can also help in creating systems that are perceived as fair and valuable.

The scepticism surrounding rewards and recognition programs in New Zealand highlights a critical area for improvement within organisations. By addressing the concerns of fairness and bias, and by aligning recognition efforts with business objectives, companies can enhance employee satisfaction, improve mental health, and achieve better overall performance. 

As the landscape of work continues to evolve, so too must the strategies for recognising and rewarding employees, ensuring they are fair, effective, and meaningful for all.