Renaissance Leadership

Purpose That Recognition!

I'm constantly amazed when companies think that a good recognition program consists of cash awards--as if that's what will motivate everyone to want to contribute more to their company.  And when they look at their turnover rates year after year, they still find that their best people are leaving. 

I think the big question a company often leaves unanswered when trying to design a recognition program is WHAT ARE WE TRYING TO ACHIEVE?

Imagine being able to answer that question and then putting together a cohesive and competent recognition plan! 

If you're trying to reduce turnover, a nice cash incentive-based program might put some of your talent over the edge in terms of stress just to get a few extra dollars in their pay slip.  If you constantly reward only your Top Ten Employees, the rest of them (hey...that's 90%) might starting wondering to themselves "why bother" and slowly REDUCE their productivity because you've decided to neglect them with any extra perks.  Perhaps you offer such meaningful recognition programs as a "special parking space" for a month or use of the restrooms on the executive-level (and no, I'm not kidding about this...I've seen it done...). 

If you're the one in charge of developing a recognition program, you might want to consider taking the following best practices into account from the National Association of Employee Recognition:

• Have a well-defined and well-written strategy
• Have buy-in from Senior Management
• Have good measurements for success (Have you increased employee satisfaction?  Are people using their rewards?  Has customer satisfaction improved?  Has turnover reduced?)
• Create a robust communications plan to promote your program and provide updates
• Train people on the program
• Plan for public celebrations
• Include scalability and flexibility in your program so you can add or change elements over the long term

I advocate an annual look at your recognition programs to come up with a current theme.  It keeps the program fresh and people will appreciate a variety in the rewards.  As we have more Baby Boomers staying on the payroll longer and an increasingly Generation Y employee looking for meaningful work that allows an appropriate work/life balance, you have to look at your recognition programs from diverse perspectives to make sure people appreciate them.  In other words, survey your people from time to time to see what kinds of recognition they want.

Simple and Personal is Best With Employee Recognition

Employee recognition programs don’t have to involve giving your top performers a BMW or sending them on a weekend trip to Cancun. In fact, there’s a lot of evidence that purely monetary reward programs can breed a host of unintended consequences, including resentment, excessive competitiveness and an actual reduction in morale.

Some people do respond to concrete financial incentives, and if they are big revenue producers, you may need to put significant financial rewards in place. However, there are plenty of other ways to re-energize your employees without lavishing them with cash, expensive gifts and vacations.

I suggest your focus less on the material and try being more personal when honoring your employees. For example, if you make a habit of thanking team members on the spot for a job well done, listening to and respecting their ideas, offering them opportunities for self-improvement, and just giving more of your time to your staff, you can often achieve greater results than you could with the carrot of extra money. These techniques cost little or nothing other than your commitment to create loyalty and a sense of ownership within your organization.

Giving employees more time for their friends and families is another valuable non-monetary benefit. Most team members would welcome an impromptu afternoon off as instant recognition for the successful completion of a project.

One of the keys to employee recognition is that it needs to take place in real time. If you catch a member of your team doing something well, acknowledge it on the spot. It wouldn’t be as effective to note the incident in the employee’s personnel file and acknowledge it months later in a performance review. Constant recognition reinforces the right behaviors and breeds loyalty. 

Get into the habit of acknowledging the good things your team does as soon as you are aware of them. Don’t worry whether the good deed is small or large.

Schedule regular time with your team just to hear their concerns and their ideas on how to improve the operation of your business. Never underestimate how important it is to team members to feel they make a difference and that their ideas matter. If your direct reports have employees who work for them, schedule skip-level meetings to solicit feedback from their team members.

Keeping it Simple and Real: Recognition Programs That Work

Employee recognition programs don’t have to involve giving your top performers a BMW or sending them on a weekend trip to Cancun. In fact, there’s a lot of evidence that purely monetary reward programs can breed a host of unintended consequences, including resentment, excessive competitiveness and an actual reduction in morale.

The need for employee recognition is clear. As the economy begins to improve, employees that have been biding their time will now actively seek new opportunities. And these are not just a handful of malcontents; they could be a majority of your staff!

According to a recent article in Workforce Management magazine, 55 percent of employees polled in the fourth quarter of 2003 by the Gallup Organization described themselves as “not engaged” in their work, meaning they did the minimal amount of work necessary to keep their jobs. Another 17 percent were “actively disengaged,” meaning they were unhappy and letting everyone know it. These are team members who need to be reengaged in their work or encouraged to look elsewhere. And we all know it’s more cost effective to retain employees than to find and train new ones.

Some people do respond to concrete financial incentives, and if they are big revenue producers, you may need to put significant financial rewards in place. However, there are plenty of other ways to re-energize your employees without lavishing them with cash, expensive gifts and vacations.

I suggest your focus less on the material and try being more personal when honoring your employees. For example, if you make a habit of thanking team members on the spot for a job well done, listening to and respecting their ideas, offering them opportunities for self-improvement, and just giving more of your time to your staff, you can often achieve greater results than you could with the carrot of extra money. These techniques cost little or nothing other than your commitment to create loyalty and a sense of ownership within your organization.

Giving employees more time for their friends and families is another valuable non-monetary benefit. Most team members would welcome an impromptu afternoon off as instant recognition for the successful completion of a project.

When I was a sales manager at AT&T, I gave my employees every Friday off if they met their sales goals for the week by Wednesday. And if they met their monthly quota by the second week of the month, they got an extra two days off to use at any time during the month. I hardly saw my team for months on Fridays, and our sales center had one of the lowest turnover rates in the country for more than two years!

One of the keys to employee recognition is that it needs to take place in real time. If you catch a member of your team doing something well, acknowledge it on the spot. It wouldn’t be as effective to note the incident in the employee’s personnel file and acknowledge it months later in a performance review. Constant recognition reinforces the right behaviors and breeds loyalty. 

Another inexpensive but effective technique is to engage your employees in dialogue on a regular basis. Listen to their ideas, and promise to take them seriously. Then keep your promises. Millikin & Co.—a textiles firm in South Carolina— energizes its employees by encouraging their ideas and letting them know within 72 hours whether the company will implement their suggestions. Seeing your idea put into action is its own reward, and it works. The company now receives an average of 115 ideas per employee each year. Is this the behavior of an “actively disengaged” workforce?

While many recognition programs do not require a large financial investment, they do require time, energy and often a readjustment in how you approach managing your team. This can often be more difficult than writing a check as it requires an active commitment to success that many leaders rarely make time for. However, the return on investment of constantly recognizing great employees can be far higher than any annual cash incentive.

Get into the habit of acknowledging the good things your team does as soon as you are aware of them. Don’t worry whether the good deed is small or large.

Schedule regular time with your team just to hear their concerns and their ideas on how to improve the operation of your business. Never underestimate how important it is to team members to feel they make a difference and that their ideas matter. If your direct reports have employees who work for them, schedule skip-level meetings to solicit feedback from their team members.

Everyone wants more money. But more money is not always the best motivator, and it may not be the missing element that prevents a team member from working harder, or smarter, for the good of the business. Being engaged, appreciated and listened to can be much more potent motivators.

Reward on Value

It amazes me how most organizations assume that recognition for a job well done should consist of throwing money at people.  Companies assume that they can "motivate" their employees to do more by simply offering the carrot of cold-hard cash to improve results. 

In sales organizations, I see companies throwing dollars down the drain by offering large cash incentives to their top sales people.  In theory, this is a good idea but sometimes the reward also promotes inappropriate behavior such as selling products and services to clients that they don't really need, which gives the sales person extra cash but results in decreased customer satisfaction.  This ultimately leads to decreased customer share and marginalized market value. 

Instead of simply throwing money at people, reward your best performers on value.  And if you're not sure what your employees value, ask!  It's amazing to me that managers never ask their employees what they want.  People assume people always want more money, as if that's the cure-all for bringing in increased revenues or finishing a major project on time. 

When I worked at AT&T, we used a combination of cash incentives as well as "personal goals" to supporting people in exceeding their objectives.  Some of my employees actually wanted more time off, some wanted the opportunity to take an outside class to improve their selling skills.  One employee simply wanted Borders gift certificates to get more CDs and books. 

The point is you need to learn what employees value and find meaningful ways--for them, not you--to support them in achieving your goals.  By understanding what's important for them, you'll find that you can inspire them in more effective ways to help them achieve what's valuable for you!