Rewards & Recognition

rewards and recognitionIt’s hard for sustainability to take root in an organisation when people are being rewarded for the opposite, such as “growth at any cost”. Leading organisations are increasingly linking their sustainability goals to their reward and recognition systems. Although people are motivated to engage in sustainability-related behaviours for many reasons other than just money, it certainly helps if they have a tangible incentive.

Research on this enabler…

  • A study into organisational design and environmental performance in electronic firms found that a link between plant manager’s compensation and environmental performance was associated with lower plant emissions.
  • Berrone and Gomez-Mejia explore the way in which linking executive pay with environmental performance can benefit both the organisation and the executives themselves, concluding that “Structuring executive compensation around environmental performance can benefit firms in several ways”.

Strategies for improving this enabler…

  • Review incentive and variable pay components of compensation policies for factors which reward unsustainable behaviours
  • Link sustainability achievements to individual and team-based compensation
  • Consider sharing the benefits of sustainability with employees. For instance, one organisation gave half of the money saved through energy reductions to the staff social club
  • Introduce awards for employees who show exemplary effort and innovation for sustainability
  • Use healthy competition as a way of getting teams to engage in sustainability initiatives, with a reward for the highest achievers

Best Practice Examples…

  • Intel reduced its greenhouse gas emissions by 60% between 2007 and 2011, with a concerted effort which included aligning a portion of the variable compensation of every employee, from entry-level employees to the CEO, to the achievement of environmental sustainability metrics.
  • Among several companies described in this article who incentivise employees to bike to work, Patagonia pays $2 per trip to those who leave the car at home
  • Unilever have taken a number of measures to reward sustainable thinking, including cancelling quarterly reporting and changing the way employees are incentivised

How Awake can help…

  • The Sustainability Culture Indicator asks employees about the extent to which they feel they are rewarded and recognised for engaging in sustainability. Results are benchmarked against other organisations, and you can identify if there is a barrier which needs addressing
  • Awake can help to facilitate focus groups for a more in-depth understanding of how employees view the benefits or otherwise for incorporating sustainability in their actions and decisions

Other useful resources…