It’s a truism of the workplace: People tend to work harder in organizations where their individual contributions are recognized and rewarded. Companies with engaged employees also generally perform better. According to a 10-year survey of 200,000 managers and employees around the world conducted by The Jackson Organization in Laurel, Md., organizations that consistently recognize excellence generate a return on equity more than three times higher than institutions that don’t. Chester Elton, co-author of The Carrot Principle, spoke with Computerworld’s Thomas Hoffman about how purpose-based recognition can improve worker productivity — and generate stronger business results.
Excerpts from that interview follow:
What type of recognition works best? Lavish rewards like a weekend at a spa or a simple “thank you” made in a presentation before someone’s peers? The answer is both. You can’t just have one big ceremony at the end of the year where you recognize a top performer and send them on an all-expense paid trip with their spouse. That’s where companies often fail. Many companies have a big blowout affair once a year, but they don’t have anything underneath that. You need to have both. You need to encourage effort, the day-to-day recognition, the verbal praise, the handwritten thank you note. You need specificity, it needs to be value based, and it needs to be sincere.
When you hit major goals like higher [revenue] growth or customer satisfaction ratings, then you can have the year-end recognition. If you’ve saved a company $10 million, a simple thank you isn’t enough.
Who are some leaders in this space and what are the innovative steps they’ve taken to reward employees? We tend to look for the spectacular. Frankly, where you’re going to get your best results are in the blocking and tackling. For instance, one company we worked with, DHL, has trained its managers on how to do day-to-day recognition, how to write thank you notes. The recognition that works best is recognition that gets back to the basics: Rewarding people who get back to the core value of the company, like calling out an employee at a team meeting who has done an exceptional job.
What are the most common mistakes that managers make when it comes to recognizing employee achievement? One of the most common mistakes is that you don’t need a plan, that you can just ad hoc it. Another common mistake is that very general praise works. “Attaboy” or “great job!” Specificity has a great impact. “Tom, thanks for getting that article in on time.” It’s a big difference from “Tom, love that wacky tie.” Consistency breeds trust.
How should recognition vary from top-performing employees to so-so workers who have occasionally shown glimmers of greatness? Another key mistake that managers make is that top performers get enough recognition. The fact is that top performers crave recognition. They collect those awards. They cherish them.
Sporadic achievers require a lot of day-to-day coaching and when their results pop up … then you recognize their results.
Should managers recognize a poor performer? If you recognize a poor performer, you devalue the recognition of top performers. You encourage and coach the poor performers, and you might write them a note like, “Today was a really good day. Let’s try to string three of four of those days together. Here’s a pair of movie tickets for you and your husband.”
You don’t pull them up in front of the team and say, “Susan made it to work on time all week. Let’s give her the chairman’s award.”
From the research and interviews you’ve conducted, do you have a sense as to whether there are certain types of recognition awards that tend to stick more with IT professionals as a category of workers? Or do recognition programs have to be tailored to the individual, regardless of their role? Recognition has to be very individual. We worked with a lot of IT folks at DHL in Arizona and being timely with recognition is very important to IT people. In their world, they want to be recognized immediately. Three or four days down the road is a different universe, they’ve moved onto a different project or set of problems. Immediacy is very important to IT professionals, especially younger workers.
Let’s say you’re an incoming CIO at a Fortune 500 company that historically hasn’t done much in terms of recognizing employee contributions. If you introduce a recognition program, might it be met with skepticism if this veers from the company culture? How should this be handled? When you first come in as a leader, you’re always met with skepticism. When the CIO rolls out the plan, nothing works more emphatically than when you communicate this effectively. And when you roll it out, make it clear that it’s a new initiative and that you will make mistakes with this new program but that it will be fun. Be consistent in the execution.
If you’re the CIO, make sure people see you presenting awards. And make sure you begin presenting awards within a few weeks of announcing the program. Over time, the skepticism dissipates.
One of the recommendations in the book is to reward an employee by allowing a spouse to come on a business trip at the company’s expense and allow them an extra day for sightseeing. Some CFOs would cringe at the very thought of this. What kinds of returns can such goodwill generate? If you recognize me in the workplace, that’s great. When you engage my family, you’re showing that you appreciate the time spent away from my family and the sacrifices they’re making for me. Every time I miss a school play or a birthday or a lacrosse game when I have to go to Beijing, it’s a strain on my family. The returns on these types of awards are just amazing.
A few years ago I had to make some presentations in Kuala Lumpur, and my company paid for me to bring my family. I spent eight days with my family in Kuala Lumpur. You can’t believe the goodwill that bought me at home.
Let’s say you’re an IT executive with some direct reports who work remotely. Should remote workers be treated differently from headquarters employees in terms of rewards and recognition? No, absolutely not. The way you execute it might be a little different. I would highly recommend that you send something to their home.
How can recognition programs be used to encourage employees to work toward team-oriented goals? Any examples you can point to? Just have a team award and specify what this is. At Rich Products Corp. in Buffalo, a team of eight was sent with their spouses on the corporate jet to go anywhere in the world. They all picked an island off the coast of Portugal to go for a week. That also built some esprit de corps.
What one thing can managers do better in terms of rewarding and recognizing individual contributors? Make it personal. So often managers say they’re going to give everybody Starbucks cards or give everybody hockey tickets. But they do that because they love hockey themselves. Learn what’s important to the individual contributor. Make it personal. Like a paid day off that doesn’t count toward vacation.
Some people love being in the spotlight. Other people are terrified. Make it personal; get to know them, whether it’s by taking them to lunch or conducting a survey.
So many people are bad managers not because they want to be but because they lack the training to be good managers.