Archive for May, 2009

The Role of Tangible vs. Intangible Rewards in Strategic Recognition

The value and role of tangible vs. intangible rewards is an ongoing argument. I’ve caused some of the disagreement myself with my post on Why Incentives Fail (but recognition works). Kevin Sensenig of Dale Carnegie & Associates recently summarized this issue well in the article “Human Potential Untangled”:

“The traditional forms of motivation are compensation and benefits. The problem with these tangible rewards is that they are short-term motivators. The more people get, the more they develop an entitlement mindset. Adding more and more tangible rewards does not necessarily increase motivation or engagement. However, taking away tangible benefits or entitlements really de-motivates or disengages people.

“On the other hand, intangible rewards, such as a “thank you,” “good job,” or effective coaching let people know their managers care about them and value their contributions. The more intangible forms of motivation the better—they raise engagement levels by helping people feel connected.

“The additional advantage of using intangible rewards is that while offering them greatly increases levels of engagement and motivation, withholding them tends not to have a significant long-term de-motivating impact. Additionally, intangible forms of motivation are not costly to provide. So for a small investment of time in showing appreciation, the resulting improvement in engagement and connectivity can be huge. The key is in giving credible, sincere, and respectful appreciation.” (emphasis mine)

Are you still fighting the tangible vs. intangible battle in your organization? Both have their roles, but don’t confuse one with the other. Join the conversation in comments.

Do What Your Employees Want * Say Thank You

Continuing on the theme of my last post, in multiple studies employees consistently say what they want in the workplace is recognition for a job well done. Just as consistently, managers and company leaders aren’t getting the message.

In a survey of employees from across industries and organizations, Dr. Gerald Graham, Professor of Management at Wichita State University, found:

• 58% seldom if ever received praise from their manager
• 76% seldom if ever received written thanks from their manager
• 78% seldom if ever got a promotion based on performance
• 81% seldom if ever received public praise
• 92% seldom if ever participated in a meeting designed to build morale

This same study invited participants to rank, in order, 65 potential motivators – the top five are those listed above!

Why the disconnect? The answer usually lies in the culture of the organization. In the companies we work with, we strongly emphasize the roll of culture and change management in successful employee recognition program efforts. Managers who never recognized their team members before won’t suddenly become the most appreciative of leaders just because a new program for recognition has been implemented.

So how can you manage change within your organization?

• Secure executive buy-in for recognition, both to promote the program and, critically, to demonstrate recognition with their direct reports and on down the chain.

• Hold managers accountable by making recognition targets part of their MBOs or KPIs

• Report on the results of recognition within the manager’s area to show the value. These reports can show increases in productivity, teamwork, performance against strategic objectives or similar. Once the value of recognition is understood, reluctant managers are more quick to jump on the bandwagon.

By enforcing change management principles for recognition up front, you can begin to change the very culture of your organization into one of appreciation through frequent, timely, memorable and personal recognition of effort.

Towers Perrin on Rewards Governance

Do you have a handle on your investment in recognition across all your locations? Are you confident all expenditures on employee recognition are being properly accounted for and taxed – especially in your international locations? Do those recognition efforts align with company goals, or even the goals you have set for the recognition initiative?

If not, you’re not alone. Towers Perrin’s latest report, Effective Global Governance and Oversight of Total Remuneration Programs: an Elusive Business Imperative, found:

* Only 44% (of multinational organizations surveyed) report their global remuneration policies are closely integrated with company business goals
* Lines of authority for global governance and oversight remain fragmented in many organizations
* Fewer than half use benchmarks or metrics to monitor performance of their investments around the world.

But the most important finding in the paper was:

“Only 14% view their measures as very useful in determining whether total remuneration investments actually support the execution of key business goals. These findings suggest that many companies have yet to build truly robust global governance frameworks that both inform key reward investments and enable leaders at all levels to measure the return on their investments in talent on an ongoing basis.”

Whether you define these remuneration efforts under the broad umbrella of pay-for-performance or more narrowly in an employee rewards and recognition initiative, the fact remains if you don’t know where the investment is going or measure the impact, then you’re just throwing money away. Our own survey revealed similar findings – a tremendous waste of resources as recognition programs fail to meet CEO needs and do not contribute to company strategy.

What do you need to gain the governance you need over your employee investments? The tools to measure and track? Buy in from line mangers? Buy in from executives? Tell me in comments.

Why Measurement Matters in Employee Recognition

Especially in these turbulent economic times, I am asked frequently to help companies build the business case for strategic employee recognition. Foundational to such an effort is setting up measurement guidelines for the program so you can clearly understand where you are now, where you want to go, and how to measure success against those goals.

But first it’s critical to understand why measurement is important in employee recognition.

Some assume with something as nice and positive as a program encouraging “thank yous,” measurement is not important. However, as with any investment in employees that ultimately drives productivity and performance against strategic objectives, you must measure as a means to encourage the level of program adoption necessary to achieve the culture change you need.

John Pescatore of Gartner recently made this point well:

AWARENESS – 30 mile per hour speed limit signs every 1/4 mile on a stretch of road that goes past the elementary school where my wife works. Result: everyone knows the speed limit and drives 40-50 mph.

ENFORCEMENT – Traffic cameras that automatically issue $40 tickets if you exceed 39 mph were installed. Result: everyone obeys the speed limit and drives 25 – 35 mph. So, about 40 years of awareness and education training plus periodic enforcement failed to change driving behavior. Installing a technical control with continual monitoring and enforcement changed the behavior in a day.”

Are you trying to change the culture of your organization to one of appreciation and high performance? How successful have you been at changing the behaviors that lead to culture change? Strategic recognition – with its inherent mechanisms for measurement – lend to behavior and culture change by measuring and reporting on actions and results. This helps hold people accountable to the standards you need to drive program success.

Tomorrow I will discuss in more detail additional, concrete steps for measuring recognition.