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Rewards and Recognition

Ken Blanchard, co-author of The One Minute Manager, said, “If there is one thing I’ve learned in my life, it is the fact that everyone wants to be appreciated. That goes for managers as well as employees, parents as well as children, and coaches as well as players.”¹

Managing today’s workforce is complicated. Managers don’t have as many ways to influence employees as they did many years ago, and most managers have learned that fear and intimidation are not motivational strategies; coaching employees to repeat good workplace behaviors is the way to go. Most organizations are operating with fewer employees being asked to do more, so it is more important than ever to create workplaces that are positive and reinforcing. Why is it so difficult for most managers to even think about rewards and recognition? It isn’t that they aren’t good people; it probably has more to do with the pressures they face to achieve sometimes-unrealistic financial targets. They just don’t have time to consider what might be missing from their work environments that would greatly help them achieve their objectives: highly motivated employees!

No matter what’s happening in the world of work, it’s important to reward employees for good performance. According to Karen Renk, executive director at the Incentive Marketing Association and quoted in Workforce, “Leading companies have maintained their recognition programs, even during this economic downturn. This sends two important messages: One, you’re letting employees know that their hard work is appreciated; and two, you’re letting them know the company is stable and focused on reaching its goals.”²

Rewarding employees is a great way to boost morale and motivate employees. Before you create an elaborate rewards and recognition program, we strongly advise you to find out what will work for your employees. Often, managers are convinced they know exactly what people want when it comes to rewards and recognition, but unless you ask people, how do you really know what will work for them? So, ask your employees what would work for them. You can do focus groups or just ask a representative group of people. Don’t rely on your leadership team to tell you what they think; you want this program to work throughout the organization—and odds are, what the executives want won’t be what your employees really need and/or desire.

The most cost-effective reward and the most valued for nearly everyone is a simple “thank you” for a specific job or for completing a project or for going above and beyond. It sounds like such a no-brainer, but you would be amazed at how few managers effectively use those two simple but powerful words.

It is increasingly apparent that one of the best ways to reward today’s busy employees is to give them time off or the ability to work from home from time to time. Though flexibility isn’t possible in all organizations or for all jobs, if your organization is able to occasionally be flexible, this will go a long way toward providing a real incentive to your employees.

When you plan your rewards and recognition programs, remember to match the reward to the person and to the achievement, and be sure that whatever you do will reinforce your organization’s values. Also, consider how and when you provide recognition to employees. Hard as is it to believe, there are people who don’t like to be praised in public; they would rather you quietly rewarded them for their accomplishments. Though most people thrive on public recognition, you should tread lightly before you do anything in a big public setting in order to determine what will be most effective for that person or group.

There are as many ways to reward employees as you can possibly imagine. Some organizations have had effective “employee of the month” programs for years, and they still work. These tend to be most effective in larger organizations, because in smaller firms you may quickly run out of people to acknowledge. Some organizations have a program in which selected employees meet with the CEO for lunch or coffee. These can be great idea generators or they can turn into “gripe sessions.” If you go this route, consider the personality of your CEO or leader. Is this the type of person whom employees want to get to know, or would your staff be intimidated by the power the CEO holds? If you do these types of meetings, you may want to have the HR director there to facilitate the session and someone to jot down the ideas that are generated.

Many organizations still reward employees for length of service, and this can be a very effective way to acknowledge the contribution an individual makes. Length of service awards aren’t nearly as important in a world in which people change jobs more frequently than in the past. Other organizations have safety awards to reward employees for going for long periods of time without an accident or safety violation. Although these awards are great, we want to encourage you to consider more personal types of rewards and recognition programs—ones that have significant impact on the recipient and on the organization.

Recognition as a Retention Tool

For some organizations, employee recognition can make all the difference in retaining staff. The Ritz-Carlton Hotel Company uses a system that defines, executes, and rewards. The company has demonstrated that employee recognition really does make a difference in retention. It has the lowest employee turnover rate of any hotel chain and feels that recognizing its employees is a major driver for its high retention rates.

High retention rates are good for the bottom line. “With engaged employees, I can drive our revenue per available room 20–30 percent higher than if I have employees who come in and just do their jobs,” says Kathleen O. Smith, senior vice president of human resources at the company’s headquarters in Chevy Chase, Maryland.³ Giving employees the resources they need to do their jobs, recognizing a job well done, stating clear expectations, and showing interest and concern in them as individuals are all employee drivers. Recognition includes small, on-the-spot monetary awards given by supervisors when they catch an employee delivering extraordinary service as well as handwritten postcards given by and to staffers at any level when they see or receive first-class service.

Ritz-Carlton also does more formal recognition. Managers are asked to name a “Five Star” employee quarterly. They are recognized every day in their hotel and then, once a year, one of the “Five Star” winners receives a trip, with a guest, to any Ritz-Carlton hotel.

One organization we know does “surprise Tuesdays.” Not every week, but once in a while and always on a Tuesday, the president of the firm gives something away. Sometimes it is a gift card to a local ice cream shop for everyone; other times it is a drawing for an American Express Gift Card for $100 or more. He has given away gas cards (especially popular when gas is at a high price). Another week it might be pizza for lunch for everyone. The best part of this is the surprise! People talk about it. It is part of the culture so that new employees hear about it during their first week from coworkers. The best part is no one ever quits on Monday—just in case!

If you are creating a program in which prizes are given, remember that people want choice, and they want items they can use in their personal life. You don’t necessarily have to provide luxury items, but consider some of the programs that allow you to offer a choice to your employees—either online or in a catalog. That way, they get to pick something that will be rewarding to them or to their family. If the award means something to them, every time they use the item they’ve chosen, they will hopefully remember it came from your organization to acknowledge something they did above and beyond their normal job.

Keep in mind that having strong rewards and recognition programs won’t matter if you don’t have strong leadership and a positive work environment. Work on those areas of your organization first and then focus on rewards and recognition.

Discussion Questions

1.    Why is recognition important to today’s employee?

2.    What is the best and most cost-effective way to reward someone?

3.    What are some of the ways that recognition plays into employee retention?

4.    What are some of the most important things to remember when putting rewards programs in place?

5.    How often should we change our rewards and recognition programs?

6.    What are some ways to publicly reward employees?