Tag Archives: rewards and recognition

Rewards and Recognition

Rewards & Recognition Program Comparisons

plus minus

Our previous post shared some of the fundamentals associated with Rewards and Recognition (R&R) programs. Continuing on that theme, today’s post will contrast some of the most common “types” of R&R programs based on input from our Partners in Improvement.

After-the-Fact Rewards v. Defined Benefit Awards
Some organizations have recognition and reward programs that are designed to ‘catch people’ doing the right things. These systems are designed to encourage certain behaviors and accomplishments — but the individual may or may not be one of the lucky ones ‘caught.’

Not every worthy act is rewarded, but the belief is that the program reinforces the desired behavior.

One organization has a “caught in the act” program that recognizes individuals by posting a card describing their accomplishments on a wall in the lunch room. Another organization used to give out ten dollar bills to recognize behavior or accomplishments after the fact, but the administrative burden was too difficult. Now they have a “Bravo” program for peer-to-peer recognition, where recipients are awarded small gifts — in the $5-10 range. Yet another would hand out $25 gas cards for identifying safety issues or making process improvements:

“Everyone seemed to like them,” one of our Partners said. “But they prizes were not large enough to make anyone mad if they went to the wrong person.”

Some awards are planned in advance, such as an organization that gives one day off to everyone after every 250,000 hours without a lost time accident; or another program that promised a raise to all employees if first pass yield metrics were achieved.

These ‘defined benefit’ rewards rely on publicizing in advance so that everyone works toward that goal.

Another organization implemented a partially defined reward: the reward was defined, the criteria were defined, but there would be only one winner and who would win was uncertain until the end. This company offered a one year lease on a new car for the store manager with the best results. The success of this program depended on being well-hyped in advance so that every store manager improves his or her results in order to try to win. However, this program triggered some resentment, as some managers who did not win expressed dissatisfaction with the program.

Team v. Individual Rewards
We also discussed the effectiveness of rewarding and recognizing teams as compared to individual rewards. While the Partners recognized some benefits from individual rewards and recognition, they expressed strong support for the benefits of team rewards and recognition

The primary advantage to individual recognition is the precision of being able to reward and recognize individuals who best exemplify the behavior that the organization wants to encourage. On any team, there are stronger and weaker contributors. The weaker contributors on a strong team are, perhaps, unfairly recognized for contributions they may not have made. Furthermore, the stronger contributors to a weak team are unfairly under-recognized and may become less motivated.

Individual rewards and recognition may enable organizations to reward the people they believe most deserve it. However, often the success of an operational or project team as a whole is far more important to an organization’s success than the actions of individuals.

Recognizing operational teams as well as temporary teams for their contributions encourages effective teamwork, helping one another to get further faster. It takes a mix of talents and personalities to build an effective team and while a team may have one or two stars, the success may also be due to the down-to-earth individual who keeps the group focused or the individual with the easy personality that defuses tensions and egos in order to keep the group working effectively. Individual rewards easily overlook the interdependencies so critical to success.

One of the forum participants established a ‘before the fact’ team reward system for improving first pass yield. This was a high priority for the company — producing top quality first time — which had a big effect on both quality and profitability. Not everyone could work directly on this improvement team, but many people influenced it indirectly.

When the yield reached the desired level, everyone received a raise.

Another of our forum participants established a team health and safety award that demonstrated the power of team influence. At his organization for every 250,000 hours without a lost time accident, the whole plant gets one day off.

The plant is now at over a million hours without a lost time accident. One fellow almost cut his finger off, but, after a quick trip to the ER, was back asking for some light duty work. Nobody wants to let the team down!

Intrinsic v. Extrinsic Rewards
The broad range of methods of reward and recognition our forum discussed seemed to divide fairly evenly between intrinsic and extrinsic motivators. Intrinsic rewards are those that strive to produce a sense of appreciation, belonging, satisfaction or contributing to a higher purpose.

Some intrinsic rewards are free, such as a thank you note, a parking space, or putting a person or team’s picture in the newsletter. Some intrinsic rewards may cost the giver something, such as buying a team lunch, giving everyone a day off, and making a contribution to a charity of the person or team’s choice, but these rewards are non-monetary and are not designed to appeal to a person’s acquisitiveness. Rather they emphasize the organization’s appreciation for a person or team’s contribution.

But a drawback to intrinsic rewards is that the value will vary from individual to individual. One person might be delighted to have their picture in the newsletter with a congratulations or note of appreciation, while another might dread it. Many people would really appreciate a sincere thank you note or a contribution to a favorite charity, but others may be indifferent to one or both of those. One person may love a fruit basket, and another may detest fruit.

By contrast, monetary rewards have a simple and clear cash value for the recipient. For example, a grocery chain gives $50 to any individual accumulating six ‘stars’ which are awarded by coworkers or customers to recognize exceptional service. An engineering firm has an annual “Presidents Award” of $20,000 for a specific accomplishment, which the individual recipient may choose to keep or divide among deserving participants as he or she sees fit. Another organization explicitly calculates a portion of a person’s annual bonus based on their participation in a process improvement project. Yet another company gives cash bonuses when financial targets are met.

The main advantage of monetary rewards is that, whether the amount is large or small, public or private, before or after the fact, one can expect that all recipients will value the reward because the recipient can spend it however they choose.

In this way, it is economically ‘efficient.’ While non-monetary rewards are less certain, whoever you are, whatever your preferences may be, cash can always be converted into something you like.

While intrinsic rewards seem uncertain in their effects, extrinsic rewards seem simple and sure — the classic ‘carrots’ intended to motivate people to try harder to achieve a specific goal. How could they fail? Well, we had a few examples.

Unintended Consequences
While appreciating the clear nature of extrinsic rewards, nearly everyone had a cautionary tale about unintended consequences of extrinsic rewards; and the bigger the reward, the bigger the problems.

Unlike rewards aimed at intrinsic motivation, the problem with extrinsic rewards was not that they might fail to influence the recipients, but rather that the outcomes were often entirely different than intended.

For example, the organizations that implemented large monetary rewards, such as the automobile lease and the President’s Award, found they attracted attention and inspired avarice as intended. Many people really wanted to win them. In fact, a good many people felt they deserved to win them. The unintended results included resentment, accusations of unfairness, and powerful disincentives for people to help one another to raise the overall performance. Organizational morale took a serious hit.

As one of the Partners put it, “This type of reward seems to create 1 winner and 99 losers.”

Engagement, Rewards and Recognition

Rewards & Recognition Fundamentals

rewards and recognition

Rewarding or recognizing members of the workforce is a standard component of most employee engagement efforts, but the way in which organizations approach the practice can vary.

In fact, during a discussion with our Partners in Improvement, we uncovered a variety of approaches to rewards and recognition programs. Some, like a service award, are very predictable; if you reach an anniversary, you are likely to receive one. Many other recognition programs include an element of surprise when exceptional service is spotted. Some rewards cost the organization little or nothing — such as a thank you note or a special parking place. Others are quite costly, such as a one year lease on a car or a $20,000 ‘President’s Award.’

Similarly, some programs are for teams, and others are for individuals.

Many of the rewards and recognition are after the fact, while some are announced and hyped in advance in order to encourage people to try for them.

But despite the variety of implementations, the objectives were really quite simple. An organization implements a reward and recognition program for one of these three reasons:

  • To increase the recipient’s satisfaction and happiness (and hopefully engagement) with the organization and his or her role within it
  • To motivate continuation of certain types of behaviors and accomplishments
  • To motivate people to work to achieve certain measurable results.

However, regardless of purpose, the amazing variety of program types allowed us to explore the benefits and unexpected drawbacks of each, which will be the subject of our next post.

Engagement, Leadership, Performance Management, Rewards and Recognition

Engaging Your Workforce: A Front-line Manager’s Recognition Tip Sheet

A recent article published by Engagement Strategies Media, outlined five specific best practices for front-line managers to help them more systematically recognize and engage their workforce.

As you may know, the recognition field has seen a significant shift over the past several years, going from traditional length-of-service awards to programs that focus on supporting critical organizational goals — i.e., quality service to internal or external customers, participation in volunteer initiatives, a willingness to go the extra mile, etc. In most cases, the success of these efforts depends upon the managers at the front lines.

It’s also true that many employees become disengaged or leave their jobs because of an immediate supervisor, not because of the company or pay. Here’s a tip sheet for front-line managers that lists five ways in which they can implement a systematic and effective approach to recognizing team members:

1.) Start With the Basics of the Work
The first step for front-line managers is to show employees that they and their work are valued and appreciated. Initially this might involve giving them a sense of ownership, and making the practice of expressing simple appreciation a standard part of day-to-day management. To ensure consistency, the prudent manager schedules regular time with each employee to make sure they understand their job goals and how their work makes a difference. It’s also important to make recognition meaningful. Don’t go overboard by praising everyday basics such as showing up for work on time or keeping a clean desk.

2.) Continually Reinforce Goals and Values
It’s equally as important to make sure team members understand the organization’s goals and values, which might include a commitment to superior customer service, continuous improvement, innovation, or inclusiveness. Don’t make employees guess—every employee should know the organization’s goals, organizational values and the role they individually can play. Take advantage of team meetings or employee newsletters to regularly reinforce the key messages and goals, and what the values mean in terms of actions and behaviors. This might include simple things such as “how we treat one another,” as well as things more directly associated with how the work gets done.

3.) Recognize employees for both their individual and group contributions. Not everyone likes public praise, so managers must get to know employees and tailor their recognition style based on each person’s preferences. When recognizing a group, make sure to acknowledge each person’s contribution. Be inclusive—recognize everyone who does something meaningful that supports the company’s values or goals through their actions. However, if you publicly recognize someone who doesn’t deserve it, you’ll devalue the whole process.

4.) Planned and Spontaneous Recognition. Formal recognition events can take place monthly, yearly, or almost any time. They’re great ways to celebrate achievements, but try to recognize employees whenever it is merited. In general, praise employees as soon as possible after an accomplishment.

5.) Leverage Internal Communications. If your organization has a print or online newsletter or social recognition platform, an article or post highlighting an employee’s achievement is a very effective way to show appreciation in a way that helps communicate and reinforce values and goals to everyone. How you recognize individuals can be inspiring to their colleagues as well.

Keep in mind that the personal touch, sincerely delivered whenever warranted, is key to keeping your team members feeling valued, motivated and excited about doing the best they can at their jobs each and every day. Studies show that front-line managers can make or break the employee experience.

Read the full article…

Developing People, Engagement, Rewards and Recognition

Rewards & Recognition Part 3: Comparisons

As discussed in our previous two posts, “Rewards & Recognition” programs can vary in a many ways.

For example some are very inexpensive to run, and others are costly; some are geared toward recognizing individuals, while others focus on rewarding teams.

Similarly, the reasons for implementing a program can differ a great deal, depending upon an organization’s situation and objectives; and as our Partners in Improvement groups discussed, the outcomes — both intended and otherwise — can also vary.

During our Partners’ discussions three distinct types of programs were compared:

  1. “After-the-Fact” rewards vs. “Defined Benefit” awards:
    Some organizations conduct recognition and reward programs that are designed to ‘catch people’ doing the right things, such as a “caught in the act” program that recognizes individuals by posting a card describing their accomplishments on a wall in the lunch room, or a “Bravo” program for peer-to-peer recognition, where recipients are awarded small gifts — in the $5-10 range.  These systems are designed to encourage certain behaviors and accomplishments — but an individual may or may not
    be one of the lucky ones ‘caught.’ Not every worthy act is rewarded, but the belief is that the program reinforces the
    desired behavior overall.

    Alternatively, some awards are planned in advance, such as an organization that gives one day off to everyone after every 250,000 hours without a lost time accident, or another program that promised a raise to all employees if first pass yield metrics were achieved.  Along the same lines, one organization implemented a partially-defined reward: the reward was defined, the criteria were defined, but there would be only one winner and the identity of that winner would remain uncertain until the end. This prize, in this case, was a one year lease on a BMW for the manager with the best results. The success of this program depended on being well-hyped in advance so that every manager improves his or her results in order to try to win. However, the size of the prize being so significant caused some dissatisfaction among some of the managers who didn’t win.

    Conclusions: both the individual and team concepts are effective. If a “one winner” approach is taken it is best to keep the value of the single award on the lower-end as opposed to awarding one “big” prize such as the above-referenced car lease.

  2. Team Awards vs. Individual Rewards:
    The primary advantage of individual recognition is the precision of being able to reward and recognize a person who best exemplifies the behavior that the organization wants to encourage.  Consider that, on any team, there are bound to be stronger and weaker contributors. The weaker contributors on a strong team are, perhaps, unfairly recognized for contributions they may not have made. Furthermore, the stronger contributors to a weak team are unfairly under-recognized and may become less motivated.  Individual rewards and recognition enable organizations to reward the people they believe most deserve it.

    However, often the success of an operational or project team as a whole is far more important to an organization’s success than the actions of individuals. Recognizing operational teams as well as temporary teams for their contributions encourages effective teamwork, helping one another to get further faster. It takes a mix of talents and personalities to build an effective team and while a team may have one or two stars, the success may also be due to the down-to-earth individual who keeps the group focused or the individual with the easy personality that defuses tensions and egos in order to keep the group working effectively.  Our research into employee engagement suggests that being viewed as an important member of a team is also very motivating. Indeed, in Daniel Pink’s book Drive, The Surprising Truth About What Motivates Us, he describes the pleasure people receive from being part of something bigger: a team, a movement, a purpose.

    Conclusions: While the benefits associated with individual rewards were recognized, the vast majority of our Partners expressed strong support for the benefits of team rewards and recognition.

  3. Intrinsic vs. Extrinsic Rewards:
    Intrinsic rewards are those that strive to produce a sense of appreciation, belonging, satisfaction or contributing to a higher purpose. Some rewards are free, such as a thank you note, a parking space, or putting a person or team’s picture in the newsletter. Some intrinsic rewards may cost the giver something,
    such as buying a team lunch, giving everyone a day off, and making a contribution to a charity of the person or team’s choice, but these rewards are non-monetary and are not designed to appeal to a person’s acquisitiveness. Rather they emphasize the organization’s appreciation for a person or team’s contribution.

    By contrast, monetary rewards have a simple and clear cash value for the recipient. For example, a grocery chain gives $50 to any individual accumulating six ‘stars’ which are awarded by coworkers or customers to recognize exceptional service. The main advantage of monetary rewards is that, whether the amount is large or small, public or private, before or after
    the fact, one can expect that all recipients will value the reward because the recipient can spend it however they choose.

    Conclusions: While appreciating the clear nature of extrinsic rewards, nearly all of our Partners had a cautionary tale about unintended consequences; and the bigger the reward, the bigger the problems. Unlike rewards aimed at intrinsic motivation, the problem with extrinsic rewards was not that they might fail to influence the recipients, but rather that the outcomes were often entirely different than intended. For example, the organizations that implemented large monetary rewards, such as the BMW lease, found they attracted attention and inspired avarice as intended. Many people really wanted to win them. In fact, a good many people felt they deserved to win them. The unintended results included resentment, accusations of unfairness, and powerful disincentives for people to help one another to raise the overall performance of the organization. Team morale took a serious hit as well.  As one of the Partners put it, “An extrinsic reward seems to create 1 winner and 99 losers.”

Ultimately, our Partners agreed upon a list of best practices, which we will share in our next post.

Continuous Improvement, Performance Management, Rewards and Recognition

Rewards & Recognition Part 2: Strategy

2 Comments

Our previous post noted  that a Rewards & Recognition program is an important component of a comprehensive engagement plan, and that there are different approaches or “reasons” to implement the practice.

During discussions with our Partners in Improvement  groups details associated with each of three distinct strategies for implementing a rewards and recognition program  were summarized as follows:

Strategy #1: To Increase Commitment and ‘Team Spirit”
Service awards are an example of recognizing people in order to strengthen the commitment to and satisfaction with their jobs.

Many organizations announce service anniversaries and offer public congratulations and appreciation. In some cases a paper certificate is ceremoniously handed to the individual. Some organizations award gifts of increasing value for milestone anniversaries, such as 5 year, 10 year, 20 year anniversaries. Gifts bearing the company logo were also intended to increase association with and commitment to the organization.

Strategy #2: To Increase Certain Behaviors or Accomplishments
A good deal of our discussion of rewards and recognition focused on ways that were intended to reinforce behavior that the organization wants to see more of.

For example, the CEO of a global engineering corporation with 8,200 employees has made a practice of sending a personal thank you to people who have really contributed to process improvement, with a “cc” to the person’s supervisor. These notes are highly valued. Similarly, the CEO of a defense contractor also described how powerfully motivational a simple thank you can be. He was walking through one of his manufacturing plants and saw the operator of a machine that was under repair, cleaning the machine. He stopped to thank her, saying he really appreciated her effort because he would like the work place to be cleaner. The comment was so motivational that when he walked back
through several hours later, long after the repairman had left and the machine was functional again, she was still cleaning the machine.

Another organization has instituted a ‘Six Star’ program to recognize and reward people for giving excellent service.
Customers and employees can award ‘stars’ for service that they feel deserves recognition. Once employees receive six
such stars they are given a fifty dollar gift certificate. Another Partner described a high five on-line recognition, with a “cc”
to the Director. If the Director saw an accomplishment that was especially good, he or she could promote it into a “Round of
Applause” that would involve a gift.

Strategy #3: To Achieve Better (Measurable) Results
Some organizations used rewards to encourage extra effort to achieve specific goals.

Examples included a one year lease on a BMW that was awarded to the store manager with the best results, and a $20,000 President’s award that was given to the employee who generated the most profitable business.

At another organization, an additional one-week vacation was given to the employee who was deemed to have done the most for the organization in the previous year.

While each of these was awarded to an individual, the intent was to motivate many people to compete for the award. The assumption is that an unusual and substantial reward will inspire people to try and outdo one another in order to win — thereby increasing the results produced by all those who failed to win as well as the winner. These rewards rely on publicity and  extravagance to generate enough interest to get everyone trying to win.

But strategies, goals and objectives do not always translate into the desired results. In fact, some rewards and recognition programs produced unintended consequences, which we’ll discuss in our next post.

Engagement, Performance Management, Rewards and Recognition

Rewards & Recognition – Part 1: Variation

We recently attended the “Engagement World” expo in Galveston, Texas, at which all aspects of enterprise engagement were discussed including ISO 10018 and  standardized engagement plans.

Simply stated, to be truly effective, an engagement plan must contain certain elements, including a method for rewarding and recognizing  desired behaviors and outcomes.

This fact was spelled-out in a prior post, noting that Rewards & Recognition is an important component of a comprehensive engagement plan. In addition, our Partners in Improvement discussed this fact, and shared some interesting insights regarding various ways of recognizing and rewarding people, and the variation in results.

For example,  some, like a service award, are very predictable; if you reach an anniversary, you are likely to receive one. But many other recognition programs include an element of surprise when exceptional service is spotted.

Some rewards cost the organization little or nothing — such as a thank you note or a special parking place. Others are quite costly, such as a one year lease on a car, or an upscale ‘President’s Award.’

Some are for teams, and others are for individuals. Many of the rewards and recognition are after the fact, while some are announced and hyped in advance in order to encourage people to try for them.

The amazing variety allowed us to explore the benefits and unexpected drawbacks of the different types of rewards and recognition. But despite the variety of implementations, the objectives were really quite simple. An organization implements a reward and recognition program for one of these three reasons:

  1. To increase the recipient’s satisfaction and happiness with the organization and his or her role within it
  2. To motivate continuation of certain types of behaviors and accomplishments
  3. To motivate people to work to achieve certain measurable results

We’ll take a closer look at these differing approaches in our next few posts, and share some surprising data points regarding outcomes and predictability.

Change, Culture building, Developing People, Engagement, Teams and Motivation

Encouraging Your Team

motivation2As business leaders, project managers, and CI leaders endeavor to manage,  motivate, and engage their teams,  many incorporate some form of a rewards and recognition program.

Among the key objectives of doing so are gaining increased commitment or greater discretionary effort from the team, promoting desired behaviors, or achieving specifically measurable results.

Regardless of objective, during a best practices exchange by a group of CI and business leaders it was agreed that recognizing and rewarding employees has a strong impact on sustainable behavior and results — a perspective that aligns with the findings of numerous studies; or, as summarized by one of the participants, “People have a way of becoming what you encourage them to be, not what you nag them to be.” (Unknown)

The group also  indicated the following criteria would yield the best results when creating and implementing a rewards and recognition strategy:

  • Keep it simple: one of the most cost effective methods of all seemed to be the simple thank you note.
  • Extrinsic rewards programs require clear metrics, auditing, and mindful design to ensure a focus on the rewarded metrics will not lead to deterioration of teamwork or other facets of the organization due to things such as jealousy or resentment.
  • Be specific: it is much more effective to recognize a team or a person for a specific result or accomplishment than for generally “doing a good job.”
  • Be timely: the closer in time the reward or recognition is to the accomplishment being recognized, the more impact it will have
  • Communicate widely: Publicity helps extend the celebration and communicates widely what is valued by the organization. Similarly, the way in which rewards are presented has a significant impact on how recipients value their rewards. Make a splash! And DO involve organizational leaders in the presentation.
  • Be consistent: Be sure that you respond to comparable accomplishments in comparable ways.
  • Be authentic: Sincerity in words of appreciation and praise are essential to an effective system of reward and recognition.
  • Use team rewards to encourage better organization-wide results.