Recognition: Why Reward, Does it Really Work?

04/01/03
By: Karen Carlsen, National Rewards

Ever wonder what makes some employees rave about where they work and how great it is while others seem to drone on and on about how badly they’re mistreated? Ever wonder how some companies manage to remain profitable while others struggle to stay afloat?
            The answer lies in people. People make a company tick. People with feelings, egos, self-esteem, families, dreams, goals and a desire to belong and be noticed. People who strive to make a difference not only in the company they work for but strive to make a difference in life in general. These are people, who like any of us, have good days and bad days. So taking that into consideration, wouldn’t it make sense to nurture and keep our most valuable company asset feeling appreciated and recognized?
            Of course it is necessary to have a good business model, a great product and the ability to deliver on our promises, but this won’t last long term if there aren’t employees who exude vitality, a positive attitude, and a willingness to help. Sometimes a little recognition goes a long way.
            Think about how good you feel when someone notices something nice you did. Perhaps it was a client referral you made or the extra effort you made to arrange your schedule to be at a meeting. Whatever the action, when someone takes note, doesn’t it make you want to do more of it? It is a positive reinforcement of behavior and employees are no different. Employees are the same people who appreciate recognition outside of work. So, if outside of work a person responds positively to a good deed or job well done, wouldn’t it be a safe assumption to say that they’d also like that same recognition on the job?

What Motivates Employees?

            Almost 40 percent of people polled in a recent survey, published in the June 2002 issue of Incentive Magazine, said that frequent recognition of accomplishments is the best way to encourage staff members. Experts agree that recognition is most effective when given in public and employees are with their peers. “Commissions just won’t motivate your people. Paying commissions will get them to do their job. In order to get people to overachieve, you need to offer a combination of incentives. People live up to the boss’s expectations. The best-practice companies are getting stellar results because they offer above and beyond the paycheck,” said Kathleen Huneycutt, Market Developer with the American Productivity & Quality Center, a Texas-based non-profit organization studying process and performance improvement.
            Perhaps you’re thinking, “Yeah, this all sounds good, but I don’t have the time, resources or budget to implement such an idea.” However consider this, giving a word of praise is FREE, yes FREE. Giving praise in public in front of someone’s peers is also FREE.
            The simple fact is that people respond to recognition. Of course, there are many options to tie in with a word of praise. From small budgets to large, you can do it! But the key is to start thinking about people, what makes them tick and what motivates and inspires them to achieve a consistently high degree of achievement. If you already have recognition and rewards in place, are you getting the results you want? Do you see a return on investment (ROI)? If not, you may want to explore why. If you are, you might want to consider implementing these same ideas throughout the company.

Measuring The Results

            For those of you just getting started, take note of where praise and recognition can best be applied. Assess each department and consider where it will make the most sense and how you want it to hit your bottom line and your ROI. According to Compensation Resources, an all-inclusive compensation consulting firm specializing in executive compensation, sales compensation and performance management, based in New Jersey, the key to a successful compensation program can be achieved in three steps:

1.                   Clearly defining goals that are realistic but challenging
2.                   Tracking and measuring performance against goals
3.                   Rewarding achievement with competitive and motivational compensation

Incentives and recognition tied to a specific behavior or action are more easily measured because of the structure than say an award that is given unexpectedly. But, both work.
            “Up until now, there has not been quantifiable landmark research that anyone could point to and claim it scientifically credible,” said Mike Hadlow, President of the Society & Travel Executives (SITE) in Chicago. “The study validated what incentive practitioners have known for years – that incentives work. The impact on performance is dramatic. Any CEO around the world can’t afford to ignore that figure. Team-based programs generated a 45 percent performance increase and individual based programs a 27 percent increase. Of the workers surveyed, 92 percent indicated that they achieved their goals because of an incentive.”
            Whether your budget is $25 or $25,000, it is always the right time to say thank you and appreciate both your internal customers, your employees, and your external customers.

So, the next time you are faced with the challenge of creating new sales, more clients or greater employee productivity, you might want to consider the power of incentives and recognition.