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How to spend wisely on reward and recognition

Alex Franquelli | April 4, 2019

Employees writing on a chalk board with a big idea light bulb.

One of the biggest misunderstandings when it comes to employee recognition is that any initiative aimed at acknowledging or praising your staff for their good work costs money. In fact, the opposite is true.

A new research conducted by Harvard Business School Assistant Professor Ashley V. Whillans, shows that more than 80 percent of US employees say they do not feel properly appreciated or rewarded, despite the fact that an ever-increasing number of US companies are allocating more than a fifth of their yearly budgets on salaries. The research shows, in fact, that what employees desire is to sense that their managers recognise and appreciate them in ways other than monetary. Whillans states that non-monetary rewards are effective because they hit three major psychological triggers: desire for autonomy, for appearing competent and the sense of belonging.

By all means, assigning a monetary value to their performance is still important and should not be scrapped altogether, but recognition allows the employer to act on a more personal level, thus devising a creative and fertile environment, rather than a competitive one. Don't get us wrong: money is still one of the best incentives, but it is undeniable that most people rightfully feel uncomfortable talking about money, so a monetary incentive is rarely talked about with their colleagues. While, on the other hand, still according to Whillans, “a nice dinner or trip, they will talk about it with their co-workers, and that can motivate everyone” and, she adds, these awards are “more memorable and emotionally satisfying to them than just receiving cash, so it can act as a stronger motivator”.

One of the advantages of a good reward and recognition programme is that it works in a vertical, but also a horizontal way. In other words, praise does not necessarily have to come from senior management, but it is, sometimes, even more appreciated when it comes from a peer. It is often a good idea, for instance, to assign a certain amount of points to each employee, to be publicly or anonymously given away to colleagues for accomplishments in the place of work. This is a reasonably economical manner for the employer to boost morale and build social connections and, at the same time, represents simple principles that send exceptionally strong messages to the recipient of the “thank you” and, even more importantly, to the rest of the workforce.

However, all of this is not achieved without a properly established and recognised company culture, one which encourages the sharing of commonly accepted values. However, Whillans continues that believe it or not many managers often “feel awkward showing gratitude and shy away from recognition. That’s why organisations need to make a push to help managers with this. It can make all the difference in whether a talented worker stays or goes”. At this point, one might wonder if negative feedback, works in the same way. In other words, if carefully administered unfavourable criticism encourages or, even better, spurs employees in the same way positive feedback does.

A quick online search points us in the direction of yet another interesting study, this time by the Harvard Business Review, which found that “an astonishing 44% of 7,631 managers stated that giving negative feedback was stressful or difficult, and 21% admitted they avoid giving negative feedback at all. But, surprisingly, 37% of managers admitted they avoid giving positive feedback too”.

This lack of positive engagement can be summed up by saying that stakeholders sometimes assume that feedbacks of opposite nature carry the same result. This is greatly incorrect, as it belittles the value (and urgency) of positive support, while exaggerating the gain provided by adverse judgement.
This ends up dwindling a manager's influence and efficacy, thus obtaining an effect opposite to the desired one.

There is no one way to establish an effective employee recognition programme in the workplace, therefore one should rely on and trust a tested method; one with both vertical and horizontal avenues, also built on positivity, rather than antagonism. Making sure the appreciation is made public helps increase the level of engagement in the work environment, with the welcome result of increasing retention and, with it, success.

Download our exclusive e-Book and find out build an effective recognition strategy for your company, including a case study from Anglian Water.

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Topics: Reward and Recognition

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