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Avoid the Pitfalls of Employee Recognition Programs

Avoid the Pitfalls of Employee Recognition Programs

By: Joseph Grenny, co-author of Influencer: The New Science of Leading Change (McGraw Hill, 2013)

To many employees, being singled out in front of and compared to peers might not be all that rewarding. It could be just the equivalent of saying, “Congratulations! Here’s a hundred dollars, a beautiful plaque with your name engraved on it — and four weeks of unrelenting ridicule from your coworkers!”

Comedian Demetri Martin summed up the way a lot of employees feel about such programs when he said, “I think employee-of-the-month is a good example of when a person can be a winner and a loser at the same time.”

Why Rewards Can Backfire
Organizational scholars have long found that many employees leave corporate award ceremonies not motivated and excited as intended but with exactly the opposite reaction. They exit demotivated and upset because they themselves weren’t honored.

In fact, many see the whole ceremony as a sham. Interviews reveal that typically half of those who attend corporate awards programs believe that they were far better qualified than the person who was honored but that they didn’t get picked for political reasons.

And it’s not just token awards that can go amiss. You could fill volumes with stories of how carefully considered incentive schemes have run amok.

One hospital, for example, found that anesthesiologists who were paid based on personal production were less willing to jump in and help one another when someone else’s patient was reacting badly.

Drilling for a Bonus
Consider a couple of the former Soviet Union’s attempts to dabble in incentive schemes. In the energy sector, rubles were literally being thrown away in the search for oil reserves because Soviet workers received bonuses according to the number of feet they drilled. It turns out that it’s far easier to drill many shallow holes than to drill a few deeper ones — which is exactly what happened.

Instead of following the geological advisories to drill deep to find existing reserves, workers were happy merely poking the surface over and over — turning up very little oil. After all, it’s what they were rewarded for doing.

Employee Incentives Gone Askew
One woman we worked with — a manager at an internationally renowned company — decided that her employees lacked business innovation, so she instituted a simple suggestion program. What could be more innocent?

To encourage creativity, she asked each work group to meet for at least a half hour per week to brainstorm new work methods, solutions to longstanding problems, and possible new products. To put teeth into the new program, she put together a committee that reviewed submissions and then awarded cash prizes to employees who came up with ideas that were judged as “real moneymakers.”

Within a few months the cash-for-ideas program had completely broken down. In fact, members of one work group ended up beating up one of their own team members as a result of the program.

It turns out the team came up with a really good idea, and Charlie, the aforementioned team member, promised that he’d take care of the paperwork. He then submitted the suggestion under his own name and kept the $5,000 bonus for himself. When his teammates found out about the deception, first they confronted him, then someone shoved him, then a melee broke out and Charlie ended up in the emergency room.

To avoid further injuries, the owner did away with the incentive program. Of course, she still invited suggestions, but none came in. Employees now believed that she was shorting them by asking for ideas without offering incremental pay.

She had hoped to use the suggestion program to stimulate innovation, but she found that by paying people for their thoughts, she had inadvertently sent the message that making suggestions was outside a person’s normal job requirements. Now employees believed that if they came up with a good idea, they deserved to be paid a bonus. Otherwise, they were being exploited.

A More Rewarding Approach
So, the question is, how do you use incentives wisely?

Take care to ensure that employee rewards come soon, are gratifying, and are clearly tied to vital behaviors. When you do so, even small rewards can be used to help people overcome some of the most profound and persistent problems.

When you do want to provide a supplemental reward to help shape employee behavior, as the much maligned adage goes, it’s often the thought, not the gift, that counts. That’s because the thought behind an incentive often carries symbolic significance and taps into a variety of social forces that carry a lot of weight, much more so than the face value of the incentive itself.

So, as you think of awards, don’t be afraid to let the thought behind the award carry the burden for you.

Author Bio:
Joseph Grenny
, along with Kerry Patterson, David Maxfield, Ron McMillan and Al Switzler, are authors of Influencer: The New Science of Leading Change (McGraw-Hill, 2013). They are the leaders of VitalSmarts, an innovator in best practices training products and services that has taught millions of people worldwide and that has worked with more than 300 of the Fortune 500 companies.