Why employee recognition? Well, let’s talk business first!
Surveys by the Society for Human Resources Management and Aon Hewitt in 2012 found that:
- Companies using strategic recognition are 48% more likely to report high engagement.
- Companies spending ≥ 1% of payroll on recognition are 79% more likely to see better financial results.
- Career opportunities, recognition and organization reputation are consistently top engagement drivers.
Now, doesn’t that ring a bell?
Children look for recognition from their parents. Students expect their teacher to praise their academic performance. Young employees want their boss to recognize them for outstanding performance. A CEO wants the board and shareholders to recognize his/ her performance.
The bottom line being: Recognition matters to everyone; only its expected form differs.
Recognition and its purpose
Recognition is a psychological need for every person that manifests in different ways in different degrees at different stages of life. Recognition essentially serves two purposes:
- Reinforcing actions or behaviors and consequently inspiring the recipient
- Enhancing self-image of the recipient
The management of human resources in the last couple of decades has moved away from 'control-orientation' to 'enabling-orientation'. The recognition initiatives, formal or otherwise, are unquestionably a much-desired piece of this 'enabling-orientation'.
Need for recognition programs
Many companies use recognition programs for developing and sustaining the desired business culture. If ‘customer service’ is a value for the company, then the management identifies and recognizes customer-centric behaviors of employees. If ‘excellence’ is one of the company’s key values, then the leadership recognizes employees for demonstrating excellence. Praising ideas alone do not suffice; the company must walk the talk and reward outstanding extra-mile behaviors.
Designing recognition programs
Further, it is necessary that recognition programs are customizable to accommodate every recognition-worthy instance. Then the design of the recognition programs requires an alignment to the company’s values and business goals. This implies that with every shift in business priorities, the recognition programs too require a realignment.
HR managers mostly design recognition programs as stated above; these programs often become a mere formality for the want of line management’s conviction in the power of recognition. Many managers hold a dysfunctional notion that unless people are motivated intrinsically, no recognition can serve the purpose. Let’s be clear; internal motivation starts playing a role generally after the employee reaches a certain level of experience and maturity. External motivation has its due place and prominence regardless of an employee’s internal motivation.
Why should recognition programs be customizable?
What is customizable recognition program? If the recognition is for an individual’s standalone achievement, then the form of recognition should take into account the employee's demographics (age, job level, marital status, etc.). If the recognition is for the employee's contribution to a team task, then the type of recognition should be identical for all team members, irrespective of their positions.
In addition, team recognition requires a pre-announcement to clarify the expectations upfront. Nevertheless, the perceived value of the recognition multiplies when the management puts an ‘impromptu icing on the cake'. If two employees are given a challenging task, but with substantial role differentiation in accomplishing the task, then the recognition should also be suitably different. However, a prior declaration is useful to avoid heartburns later.
If the recognition is for an unplanned but critical performance, the recognition should be spontaneous. However, it is necessary to make sure that such spontaneous recognition does not set an unsustainable precedent. When an employee delivers an unplanned critical performance, emotions run high and decisions turn more emotional than rational.
The value of the recognition gets super-enhanced, when the employee receives it publicly and from the top leadership. Further, when the recognized performance is worth emulating across the organization, all communication channels must flash the information at the earliest. Publicity is power.
Majorly overlooked element
A critical, but often overlooked element in the recognition program is 'immediacy'. That is, the gap in time between the actual performance and its recognition. This error is primarily due to lack of planning or lack of presence of mind in most instances. More the 'immediacy' gap, lesser the perceived value of the recognition.
Three forms of recognition
Recognition can have three distinct forms and not two as conventionally practiced:
- Direct monetary – Means cash or cash equivalent (discount coupons, movie tickets, gift coupons, special bonus, incentives, etc.)
- Indirect monetary – Recognition that provides high opportunity value for the employee, such as additional training, coaching, mentoring, enrollment for certification programs, etc., paid for in part or full by the company
- Kind – Assignment to pet projects
I, along with 40 of my colleagues, had attended a customized six-day learning event at IIM-A in 2003-04. A senior leader in my previous organization had attended a course at Harvard in 2010! These are few examples of 'Indirect monetary' recognitions. Imagine the power of such indirect monetary recognitions!
Imagine the feelings of an employee, who receives a personal invite from the CEO for a family dinner at a five-star hotel. Imagine the impact of such a kind gesture!
At the end, I unwaveringly advocate that recognition in any form should have no linkage with the recipient’s future association with the company. Any such linkage is nothing but a disguised way of buying loyalty and, in most cases, will be dysfunctional.
In support of my thoughts, I quote few excerpts from an article, Recognizing employees is the simplest way to improve morale, by David Novak, Harvard Business Review (May 2016):
- Keep in mind that the overwhelming majority of people aren’t simply motivated by a paycheck.
- Publicly recognizing and rewarding small wins keeps everyone motivated over the long haul.
- Make it personal. Another interesting point from the OGO research: 76% of people save handwritten Thank You notes.
- Make it timely. Do not wait for monthly meetings or annual performance reviews.
- Remember recognition is a privilege, not just another item on your to-do list. As a leader, you have the privilege of feeding people’s souls and helping them feel great about themselves. And by feeding their souls, you’ll feed yours in return.
After all, isn’t winning the Oscars the most coveted accolade for Hollywood at large? Winning an Oscar aside, even an Oscar nomination is a special acknowledgement.
Can’t you also conceive, design and deploy an Oscar-like recognition program for your company? Well, I think you certainly can and should.
This blog is written by Ketan T. Bhatt. He is a management graduate (IRMA-92), and over 20 years, has gained inclusive experience and expertise in HR and OD domains. Since February 2014, KT is an independent HR professional.
He can be reached at: firstname.lastname@example.org