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Reward and Recognition Drives Outstanding Performance
By Bill Catlette and Richard Hadden
How do good managers recognize truly outstanding performance, and reward it in ways that are sure to make the performance happen again?
For one thing, they worry less about creating highly formalized ``Reward and Recognition Programs" and spend more time determining what should be rewarded, and how. Institutionalizing the process too much makes the reward look like an entitlement. Allow spontaneity. Besides, while you're trying to get a bunch of overworked managers and staff to agree on the perfect R&R program, three of your best employees will have left for lack of appreciation.
Let's start with the basics. I mean the real basics. You know – those things you *know* you should do, but often fail to.
In “A Winter's Tale", Shakespeare wrote, “One good deed dying tongueless slaughters a thousand waiting upon that. Our praises are our wages."
Now, I'm not naïve enough to believe that the occasional “attaboy" will take the place of real money every time, but we all know that people are often motivated by the simple things and demoralized by neglect.
Seth Stearns, an internal consultant and “Champion of Morale" with the Technology and Solutions Group of Banc One Investment Management near Columbus, Ohio, says that Level One of his company's three-tiered R&R approach is what they call a “quick-hit thank you".
Under this easily administered plan, managers and even co-workers write a simple thank you note on a specially designated card, and include something from the company, like a gift certificate to a great restaurant. The accompanying “goodie" should be something the employee wouldn't otherwise be able to receive. Forget the key chains and coffee mugs that do nothing but advertise the company.
Reward and recognition should be designed to distinguish truly outstanding performance from that which is merely acceptable. It recognizes what Elton Mayo, who conducted the Harvard Studies in the 1920's, called “Discretionary Effort" – that increment representing the difference between a person's full capability and the minimum requirements of the job.
To that end, Stearns's employer ups the ante for extraordinary contributions, with a deposit to a mutual fund. This is a reward that reinforces each month that outstanding work yields outstanding gains.
These folks get a shirt, too, but not just any shirt. A distinctive and highly desirable “badge of honor" that identifies the wearer as a winner. “The impact has been phenomenal," says Stearns. “People wear them with pride." Others ask, “How do I get a shirt like that?" And Stearns is only too happy to tell them.
Some worry that R&R promotes favoritism. That's a healthy concern. Once you start
differentiating performers from non-performers, some tension is bound to occur. Don't let that deter you.
Include in your strategy a way to learn what kinds of rewards your people would value. This is simple. Hold a meeting – no longer than an hour – and ask them. Tell them honestly that you can't promise to implement all their suggestions, but you want to know what they could get excited about.
Bob Nelson's book 1001 Ways to Reward Employees is chock full of ideas, mostly good ones, about what kinds of rewards seem to work best. Nelson's and other examples include: a little extra in the next paycheck (please, enough to make a difference after the IRS takes theirs), tickets to a local game or cultural event, dinner for two, a weekend at a nearby getaway, or just a day off. Let the reward fit your group, their values, and your budget. But whatever the reward, make absolutely certain that people understand what it takes to earn it.
As for the specific behaviors to be rewarded, pick those which are universally understood, essential to the organization's success, and where possible, measurable.
Enable your managers and supervisors with the autonomy to give spot rewards at their discretion. I hope you trust them not to squander the company's resources. Ask them to budget for it, and then use their good judgment.
Recognition can also come in the form of giving greater autonomy or an increase in visibility or responsibility. Make sure it's seen not as "more work, same money", but truly as an honor.
Be careful what you incent people to do. If enhanced teamwork is your objective, a program which recognizes individual, rather than team performance will prove divisive.
Finally, if you solicit employees' ideas (and I hope you do), and someone's idea adds substantially to the company's bottom line, be prepared to come to the table with more than a token portion of the windfall. I know a successful businesswoman who once came up with a single idea that literally saved her company millions. She was rewarded, a year later, with a $100 savings bond. The next year, she took her idea, a couple more good ones, and half a dozen of her co-workers and started her own business competing with her former employer. She's had lots of good ideas since then.
Use base pay for base performance. Reward and recognize that which you want repeated. Be creative, spontaneous, and flexible, but be clear about what kinds of work will receive extra recognition.
And while you're at it, reward yourself for helping to create a better, and more motivating place for people to work.
Please print the following attribution for this article: Bill Catlette and Richard Hadden, co-authors of Contented Cows Give Better Milk, help clients clobber the competition by having a focused, fired up, and capably led workforce. They deliver powerful conference keynotes and leadership training. They can be reached at 800-940-7006 (+1-904-720-0870 from outside North America) or www.ContentedCows.com.