Recognition, Incentives & Employee Rewards

False Friends: Employee Recognition, Incentives & Rewards

When it comes to motivating the workforce, tons of advice can be found and this is no surprise: Every year, the same surveys and studies from Bersin by Deloitte, Gallup and others show that the majority of workers is not engaged at work and even disengaged. At the same time, more and more money is spent on employee recognition programs and initiatives. The problem is evident: Most HR departments try to make the employee fit in their rigid performance evaluation program. Very few HR managers understand how to make the basic human psychology behind motivation work for them (see also Fundamentals of Motivation). However, the latter is the most important thing to know to implement successful initiatives to improve employee engagement.





3 aspects of employee recognition

Valuing input and output

Recognizing an employee generally means appreciating and valuing the effort she puts in while performing her job. It’s actually a very broad term - you can recognize both the effort (or input) and the work result (output). This is important later to understand the mechanism of an employee reward.

Time

Recognition also always involves another central aspect: Time. You can not appreciate great work without investing time into it. This is also logical: People crave for both specific and meaningful feedback. So your job is to know or learn why exactly the praise is adequate in order to provide valuable feedback and this simply involves time. The factor time becomes even more important with younger generations and the so-called “Millennials” as they expect regular and frequent feedback.

Relatedness

When we elaborate on the adjective “specific” we can see a third aspect that proves to be important: Relatedness. It’s useless to give kudos to someone without referring to the actual performance, again input or output, for two reasons: First, as human motivation is led by autonomy, purpose and mastery (see Dan Pink), people are motivated to become better at what they’re doing. Unrelated feedback doesn’t help them to achieve that. Second, a simple “thank you” is an act of kindness but no recognition as it doesn’t involve time invested in the actual message to the employee (see second aspect again).





Seize the moment

The easiest way to make sure feedback is related is to express it immediately because the memory is fresh and you know the reasons why the recognition is deserved:you can value the effort (input) or result (output) while you only have to invest a little time to recap the full performance and can provide closely related feedback. That’s recognition. Your employees feel recognized for what they have done for the company. Seize that moment and don’t wait.





Forms of appreciating great work

With the elements of employee recognition being clear now, the question is how to express the appreciation and what forms of praise are appropriate. There are many ways how to do that. After all we’re talking about a form of communication between human beings and communication can come in different forms:

  • A personal e-mail, text message or other form of electronic communication Remember to invest time, value specifically and keep the feedback related. Send it timely. Just a “thank you” will not have the effect you wanted
  • Show up in the office and express your appreciation
  • Personal gifts and stuff: Everything that involves time or has scarce resources works brilliantly. Bake a cake (there’s only one of its kind), build a paper plane and sign it, perform a poem, grab a beer with the colleague and other stuff will work brilliantly. Why? Because you invest personal effort and time. Buying a gift card from Amazon won’t - you invest no time.




Where the heck do employee rewards fit in?

Actually, if you’re thinking of classic rewards like a voucher, gift card or a gold watch, they don’t fit in. When you look at them in detail, classic rewards lack the 3 aspects of employee recognition stated above:

  • They are unspecific (unless you combine them with the communicated feedback)
  • They don’t require a lot of time invested in the recognition itself
  • They are unrelated (unless you say what the reward is for)

Furthermore, rewards do not value or appreciate the employee. the currency of recognition is time invested in specific, immediate feedback. Sending over a $50 Amazon gift card for working late doesn’t motivate any employee today. In fact these things are even demotivating as none of the three aspects of recognition above is represented in them.





What about incentives?

For many, employee rewards and incentives are two children of the same thought. But actually, they are fundamentally different:

People get a reward for a result or something they have already accomplished. People get an incentive for a task or something they still need to do.

Think about it for a while.

Incentives can be devastating demotivators. If your employee is proud of having accomplished something and expects appreciation and you counter it with offering an incentive for the next task he should do, he probably goes home deeply unsatisfied and demotivated. Incentives are directed to the future. They are unrelated to anything that was in the past. So incentives are by no means something you should bring to the table when your job is to actually value and appreciate a past performance.





What to do instead?

If you want to seriously improve the level of employee engagement in your company, get rid of every pseudo recognition that seems random, occasional and cheap to employees. Invest the necessary time to make sure your feedback to your coworker encompasses all three aspects of employee recognition summed up here again:

  • Make sure you know exactly what you want to value or appreciate
  • Invest personal time
  • Keep the kudos concise and related
  • Express it as closely to the performance as possible





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