As a consultant and strategist on employee recognition, one of the most common questions I’m asked is: “Isn’t free appreciation just as effective as recognition tied to rewards? Won’t we get more bang for our budget if we focus on ‘eThanks’ or handwritten notes or the like?”
I’ve answered this in prior posts, but today I’m enamored with Seth Godin’s perspective on free giveaways vs. content, services or products that have costs associated with them because they’re worth it.
“Sure, free is a fine way to grab attention, but more and more often, it’s precisely the wrong sort of attention from the wrong people.
“I’d much rather work with someone who says, ‘what have you got that’s expensive… but worth it?’ Not because that person is about to pay money, but because that person is focused on ‘worth it.’ …
“When looking at free, the ‘worth it’ question never comes up, because when seduced by the zero price and nothing but the zero price, we fail to answer the question about worth or value.”
The same principle applies with employee recognition. When recognition is “free” we don’t stop to think about the real “worth” of the contribution, achievement or result of the person we’re recognizing. Indeed, across companies who have included eThanks or “free” recognition in their programs, we see a dramatic uptake in usage initially (most likely due to the pent up desire to share appreciation with others), then a fairly rapid drop off in a matter of weeks as the “free” recognition loses lasting value. (See also the final finding in the Fall 2012 Workforce Mood Tracker Report, summarized here. An upcoming Workforce Mood Tracker showed only 4% of employees found eThanks (award without gift or monetary value) to be a memorable form of recognition.)
The solution is simple. During the recognition process, offer employees a selection of clearly differentiated award levels to choose from when nominating others for deserved recognition. Then include guidance on the variabilities of level of effort, contribution or result achieved to help nominators select the appropriate award level. Lower level awards tend to be used much more often, ensuring recognition remains frequent, timely and targeted to reach the vast majority of employees.
This approach lets you easily calibrate appreciation and awards with the actions deserving of recognition. When this doesn’t happen, the consequences can be quite dramatic. A new consultant and strategist on my team recently shared the story below about what happens when you rely only on free recognition:
A project manager at a major American auto manufacturer led a group tasked with streamlining a process designed to save the company significant money. Many extra hours later invested in late nights and weekends, the team finished. The new, streamlined process was a success, saving millions of dollars. As a reward, each team member received a generic thank you card with a stamped signature from the CEO. The project manager quit the next day.
How do you differentiate employee awards and recognition in your organization?
About Derek Irvine
The VP of Client Strategy and Consulting at Globoforce, Derek Irvine is one of the world’s foremost experts on employee recognition and engagement, helping business leaders set a higher vision and ambition for their organizations. As a renowned speaker and co-author of "The Power of Thanks" and "Winning with a Culture of Recognition," he teaches companies how to use recognition to proactively manage company culture. Derek holds a B.Comm and Masters of Business Studies from the Smurfit Graduate Business School at University College Dublin.