This is a good time of year to recognize exceptional performance of one or a few key individuals. Consider a lump-sum cash award, especially if you have someone who does not participate in a formal incentive plan.
Research has shown that lump sum, discretionary, and unanticipated awards have a greater effect on job performance than the same amount in base salary. And they also help to retain good people.
Present the award in private with the person’s immediate supervisor or manager, and emphasize how much you appreciate the individual’s contributions. Such recognition means a lot to individuals. Imagine how it feels to receive the award, and what a proud moment it is for that person to go home and tell his/her family all about the accolades and award.
Cash awards or not, be sure to recognize people for their work through the year.