Do employee rewards programs really make a difference to a company's overall health? Or are they just touchy-feely HR initiatives that are nice to have but don't do much to truly improve employee satisfaction or reduce turnover?
Let's start with three facts that you may already know—or could perhaps guess from your own corporate experience:
The vast majority of employees (91%) rank management's recognition of their job performance as important or very important.
An employee's relationship with his direct manager often has the biggest impact on his job satisfaction.
Employee turnover is expensive, from 50% to 200% of an employee's annual salary.
The proof is in the numbers. Recognizing team accomplishments is an integral part of developing a healthy team culture that is more likely to attract and retain top talent—as long as it's done right. Even with the best of intentions, efforts to honor team achievement can go awry. For example, if you reward tasks only and ignore behaviors, or if the reward is incommensurate with the accomplishment, you may inadvertently demotivate individuals or the team at large. (You can read more about this in our post "You're Missing the Boat on Measuring Employee Morale: 4 Things You Can Do About It.")
The following six tips will ensure that your efforts have the intended effect: creating a vibrant, positive, and productive workplace that keeps employees engaged and, well, employed over the long term.
1. Start With Your Goals
"When you recognize something, what you're really doing is influencing positive behavior to continue," says Kathryn Gowans, an organization development consultant who has worked with corporations and not-for-profit groups from eBay to the Federal Reserve Board of Governors.
When corporate leaders first decide to invest in an official recognition program, they often start with a discussion of what the rewards will be—cash, paycheck bonuses, gift certificates, awards, badges or credentials, public accolades. But the best programs for recognizing team accomplishments start instead with a discussion of the program's goals. The behaviors that you choose to reward should be those that tie in to your organization's objectives.
Are you trying to foster a cutthroat, competitive environment in your sales team? Then design your rewards program solely around sales numbers. Are you trying to achieve greater cooperation between departments and teams? Then create a system that rewards individuals and groups for demonstrated teamwork. Be deliberate and proactive about giving recognition around the things that you want to see more of.
2. Make Sure You Can See What You Want to Reward
"Sometimes people just don't feel appreciated for the amount of work they do. They don't feel that people understand or care," Gowans says. Often the very first step is making sure you have the right amount of visibility into the daily work of the people you manage.
When it comes to monitoring employee performance, it's dangerous to rely on anecdotal evidence or simply your gut feeling about how an employee is doing. Others who are in the trenches with that employee have a clearer picture, and it's demotivating to everyone when an individual is over-recognized for average performance or under-recognized for outstanding work. Both extremes can undermine team morale and unity.
Combat this pitfall by seeking out an objective, data-driven foundation that gives you real-time insights into productivity, timeliness, and overall employee engagement. You can't recognize what you can't see. A comprehensive work-management solution can allow collaboration, communication, and task tracking to happen all in one unified space—accessible to employee, team, and management. This makes it essential to any serious program for recognizing team accomplishments.
"Just knowing that my manager is aware of what I'm going through helps me feel valued," says Sharon Roux, Chief Operating Officer and partner of The Summit Group, a Salt Lake City PR firm. Simply being aware and willing to express appreciation in the moment is often what matters most. "I have always appreciated the small things—a simple thank you; acknowledgement for extra work on a big project," Roux says.
3. Reward Employees for the Right Things
Many managers fall into the trap of focusing exclusively on tasks and failing to address behaviors, often because the latter is too subjective, it should be common sense, or it seems like it's not job relevant. We may think that we can't give feedback or hold people accountable for how they act, but this more than anything is what makes or breaks company culture.
"You can have someone who gets everything done, but leaves a wake of dead bodies along the way," Gowans says. "No one wants to work with them, and yet they are accomplishing their tasks up to standard. We should be as willing to fire someone who doesn't demonstrate the right behaviors as fast as someone who doesn't complete the tasks." While we say we want both—and we expect both—we tend to give recognition around only one: the tasks. Behavior performance is rarely rewarded.
Remember that an employee's paycheck is already compensating them for performing their basic job tasks up to standard on a daily basis. Any additional recognition should be based on how the tasks were performed (more efficiently, ahead of schedule, with increased teamwork, etc.). This all points to behavior.
"Take someone who's a top performer who's always getting the outstanding results," Gowans says. "Their paycheck will usually reflect that. So instead of offering additional rewards for things they're already being paid to do, recognize them instead for going the extra mile to help or mentor someone else, or for putting into place a process to work more effectively with another team." In other words, look beyond the day-to-day tasks that are already part of people's job descriptions.
Here are a few examples of how you might recognize an employee or colleague for a behavior instead of a task:
"Thank you for responding immediately when you were unable to follow through on that assignment. I had enough notice to reassign it and still make the deadline."
"Thank you for coming to me with a solution instead of just presenting the problem."
"I appreciate you volunteering to help John when you could see he was stuck—without making him feel conspicuous."
"It means a lot that you were willing to address this with me first privately instead of bringing it up in front of other people."
"Thank you for being approachable and open, so I feel comfortable bringing these issues to your attention."
4. Be Specific and Immediate
"Efforts can be ineffective when recognition comes too late," Roux says. The right work-management solution will often have recognition systems built right in, allowing managers and fellow employees to praise outstanding work publicly and in the moment.
However you choose to acknowledge quality work—via a sticky note, a verbal compliment in a meeting, a hallway conversation, an email, or a recognition feature in your work-management solution—be as specific as you can.
Saying, "Good job on that presentation," is just general enough that it could come across as insincere. The recipient could be left wondering if you liked the opening joke, the artwork used on the slides, or the content itself.
The more specific you are with your feedback, the more you increase trust, decrease defensiveness, and inspire repeat performances. Instead, try something like this: "Great job translating that complex data into very easy-to-understand graphs in your presentation. I could tell the audience was really getting it."
5. Match the Reward to the Individual and the Accomplishment
"Each person has his or her own preferences for recognition," Roux says. "Some prefer company-wide recognition and love the spotlight while some want quiet acknowledgement. This is where managing is more of an art than a science. I try to match my initiatives to the individual. And I always say ‘thank you.'"
If you've taken the time to really get to know your team, you'll have an inkling of their preferences, and your efforts to reward and recognize will be more impactful. People with more introverted personalities usually prefer private, one-on-one interactions. Larger-than-life personalities who are energized by large groups of people might really appreciate a big, public statement. If you're in doubt, just ask the individual.
Likewise, it's important to offer rewards that are commensurate with the level of achievement—to avoid causing unintentional resentment. "A really small bonus becomes an even smaller bonus after taxes and can feel so insignificant that the employee sees it negatively," Roux says. "If you can't give a significant bonus, for example, consider a different option. Something more personalized to the individual."
6. Enable Rewards in All Directions
"Many organizations have maybe one form of recognition in place: top-down recognition of teams and individuals around tasks on quarterly, semi-annual, or annual basis," Gowans says. What they're missing is an opportunity to enable peer-to-peer or bottom-up recognition.
In a really robust system, an employee would be able to walk into the manager's office with a gift certificate and say, "I really appreciated you letting me speak in that meeting and be heard," or "Thank you for giving me a private space to work on that project without interruptions. It really made a difference to my productivity."
In one company Gowans consulted with, a recognition form was made available to all employees at all levels. They had to fill out who the award was for, what the recipient had done to deserve recognition, and what they wanted access to on behalf of the recipient. The forms had to be approved by HR, with a quick turnaround guaranteed. The system made a huge difference in teamwork and morale company-wide.
At another company, employees were given "company bucks" that they could award to each other, along with a handwritten note of appreciation. Management organized quarterly or semi-annual auctions, where employees could use the fake money to bid on prizes. This system was a great fit for that particular company's culture. And while the auctions and the prizes were both fun and motivating, managers found that what really mattered were the notes of appreciation. Employees hung onto them for years to come.
Worth the Effort
Employee recognition systems are not only fun and meaningful, but they can also help create a healthy culture and environment—as long they're intentionally designed, oriented around the company's goals, and customizable to different individuals and accomplishments at all levels of the organization.
"It's the day-to-day actions of individuals within an organization that truly keep people around and give them bottom-line productivity," Gowans says.
Formal recognition can never replace the hard work of managing performance, of course. Instead, it's a way to ensure that employee contributions are noticed, that individuals and teams feel valued, and that productive behaviors are reinforced in such a way that they truly take root and spread throughout the company.
"The most important way of giving recognition is not through a formal system, but in the time you spend supporting your team in the job you've hired them to do," Gowans says. But rewards are so much more fun.
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About the Author
Marcus is a content strategist and producer who loves helping brands craft content that improves customers' lives, builds brand credibility, and demands to be shared. For the last 10 years, Marcus has worked in every type of content—from writing to video production to design—and is currently a senior content marketing manager at Workfront, where he oversees all corporate- and awareness-level level content. When he's not producing content, he's consuming it, in the form of books, movies, and podcasts.Follow on Twitter More Content by Marcus Varner