Show Me The Recognition - Why It Isn’t Always About The Money
Contrary to the now infamous line from the movie “Jerry Maguire”, when the athlete shouts “show me the money” at his agent, cash is not always king. While compensation is one form of recognition, companies can significantly improve their employee engagement and commitment using other techniques.
Why is this? For one thing, monetary rewards tend to be an annual event. In best case scenarios, they are tied to specific performance objectives attained and monitored throughout the year. However, that’s not always the case – at some companies, raises are administered based on factors that are outside of the immediate influence or control of the employee. Whatever the case, annual raises typically happen at a point in time removed from when the desired behavior actually occurred. Therefore, the “cause and effect” impact is often diluted.
That’s not to say that all employee recognition programs work well either. Take the example of a CEO of a not-for profit hospital. She recommended that whenever employees received three thank-you notes from patients, their names would be engraved on a plaque in the hospital atrium. This program, while well-intentioned, was ill-received. Employees actually expressed resentment for a number of reasons; mostly because they felt the system was too public and wasn't aligned with their mission and stewardship; that the effort amounted to a popularity contest; that they never even got to see the patient letters of what they had done well, etc.
To avoid a mistake like this, consider the following criteria of “when, who, what, and how”:
WHEN: Recognize employee effort on a timely basis. Textbook behavioral psychology principles support the fact that, if you see a behavior you like, you need to reward it on the spot. You are much more likely to get that behavior again.
Also, reward regularly. Some companies actually experience a spate of good performance leading up to the performance appraisal period, followed by a “glad-that’s-over-until-next-year” period of less than optimal behavior. "Catching" good behavior on a continual basis leads to better performance on a consistent basis.
WHO: Reward and recognize teams, as well as individuals, particularly if your company emphasizes a culture of teamwork. Individuals rarely execute in isolation. But balance this with recognition for individuals - you don’t want a superstar, assigned to an average team, to be too discouraged.
WHAT: An essential part of recognition is defining, in very concrete terms, what constitutes “great” performance. If employees don’t know what “great” is, they will not be able to meet those standards. Communication is critical.
Finally, HOW: Most importantly, key to effective recognition is customization - making it meaningful for the individual and linking it to the business strategy of the company. To answer “how”, first take a look at your strategy – how do employees need to work in order to achieve it? Then, ask employees what type of recognition they find valuable. Recognize that not everyone values the same thing.
Author Credits
Kathryn Meyer, Capital H Group. Capital H Group is a consulting firm that takes a value-based approach to helping companies manage, and invest in, their human capital. Partnering with our clients, we focus on creating value through their people. For further information, please visit www.capitalHgroup.com.