Archive for the "Reward Choice" Category

This Is How to Get Business Returns from Service Anniversaries

By Brenda Pohlman

Man climbing up stepsRecognize This! — Does your service anniversary program suffer from low expectations? Set loftier goals as the first step in adopting a modern approach that delivers results.

Service anniversary recognition doesn’t typically make the news. So the recent story involving an absentee employee in Spain who was exposed by a long service award got my attention. As reported by El Mundo, the employee had been absent from his municipal job for six years while still on the payroll. He’d only been caught when his 20-year service anniversary came up and his manager attempted to deliver his long service award. As a proponent of service anniversary recognition, I’ve never touted this sort of discovery as one of its merits!

The topic of anniversary program benefits is a curious one. For years it was widely assumed there weren’t many, frankly. While we can’t expect them to carry the full load of our organization’s recognition needs, we should expect today’s programs to deliver results – because with a more modern approach they can. The days of these programs languishing as historical “must haves” while delivering no tangible return are over.

If you’re one of those who’s scratching your head wondering about the value of your own anniversary program you’re not alone. Last year’s SHRM / Globoforce Employee Recognition Report found that only 22% of the HR leaders surveyed describe their anniversary programs as excellent. Almost a third rated their program as fair or even poor. HR’s underwhelming assessment of its own initiatives might stem from this historic lack of ambition. According to the same survey, the primary reason most employers offer anniversary programs is to show appreciation to employees, which is certainly straightforward but perhaps not ambitious enough. Less frequently cited as program goals were increasing levels of employee happiness, emotional commitment and engagement. And surprisingly, the most naturally aligned ambition, retention improvement, is among the least anticipated benefits, with only 45% saying that better retention is an expected outcome of their anniversary program.

Much of the HR community has succumbed to decades of low expectations with these initiatives, and research shows that the results achieved reflect the low bar that’s been set. When we asked employees directly about these same topics in a survey the year prior, the majority reported an underwhelming experience with their company’s anniversary program. Employees’ expectations for a rewarding and meaningful experience have outpaced HR’s expectations for business impact, resulting in a situation where we’ve left a ton of opportunity on the table. The good news is we can catch up.

Consider what you’re offering today and focus on improvements in these areas:

  • Reward choice
  • Consistency
  • Coworker involvement
  • Emotional impact and personal feel

A word of caution about letting the pendulum swing too far in the other direction. No matter how well your program ticks the boxes above, it will be most effective as a component of a comprehensive, global recognition strategy. As the service anniversary experience evolves to deliver more than it used to, it can’t substitute for a corporate-wide commitment to day-to-day social recognition linked to your business strategy.

While improvements in retention and engagement seem mundane compared to the outcome of the recent news-making service award, there’s proof positive that this is exactly what we should expect. Think big about what can be achieved with a modern approach to service anniversary recognition and watch it deliver.

Platinum Rule of Recognition: It’s Not about You – It’s About Them

by Derek Irvine

Image of blue goldfish swimming opposite of school of gold goldfishRecognize This! – A key aspect of effective employee recognition is providing appreciation in the way most meaningful to the recipient.

The Golden Rule – “Do unto others as you would have them do unto you.” – is a good philosophical approach to life. But it doesn’t fully apply to employee recognition.

Too often, when we think about appreciating and recognizing others for contributions, work well done, or results, we think about how we would want to be recognized. But that ignores the needs and desires of the person we are trying to honor. And isn’t that really the point of recognition? To make the recipient feel valued, noticed and appreciated, and not to toot our own horn?

That’s why I like the idea of the “platinum rule.” Sharon Sloane, CEO of Will Interactive, recently discussed the platinum rule in terms of her leadership style. In this Corner Office interview, she said:

“It means, do unto others as they would have you do unto them. It recognizes that not everybody is motivated by the same thing. You can’t necessarily fulfill everyone’s wishes, but it’s crucial to understand what makes them tick.”

If you enjoy being publicly praised and acknowledged, don’t foist that preference on someone who hates the spotlight but would enjoy being praised in a private meeting with you. If you personally believe, “Getting paid is recognition enough,” realize that many people are motivated by understanding the impact and role of their work within a bigger picture. Frequent, timely recognition outside of a paycheck accomplishes this goal more readily.

Paul White, co-author of The 5 Languages of Appreciation at Work, points to some of these differences:

“What we have found is that people differ in how they want to be shown appreciation and encouragement. Verbal compliments are meaningful to some. To others, words are cheap and spending time with them is important. Helping employees dig out when they are behind on a project, or handing out restaurant gift cards or sports tickets after a particularly tough week, can be effective ways to convey support.

“For older workers, a handwritten personal note is often seen as very meaningful. But for millennial males, receiving something handwritten offers little added value. The key for them is the speed in which the feedback is given, preferably within 24 hours, as opposed to a few days.”

Paying attention to generational differences in recognition preferences can also pay dividends to your organization. Fast Company reported:

“Research by Deloitte is projecting that millennials will make up 75% of the global workforce by 2025. They are supportive of—and engaged with—companies that care about more than a high-profit margin. Leaders are noticing the change. According to Deloitte, 78% of business leaders rate retention and engagement as urgent or important.”

Recognition is the most powerful lever for increasing employee engagement and creating a positivity dominated workplace culture that employees don’t want to leave. Committing to recognizing others the way they want to be recognized is a critical step in that process.

How do you prefer to be recognized? How might that differ from your peers or members of your team?

Lapel Pins in an Age of “What’s a Lapel?”

by Andrea Gappmayer

Picture of lapel pin on a brown suitRecognize This! – When thinking of employee rewards, at the forefront of your mind should be “What is rewarding to the employee?,” not “What have we always done?”

I had coffee with a group of friends last Sunday morning. One friend is a 25-year-old who works at one of the well-known Silicon Valley high tech companies.

We were all talking about our lives—kids, jobs, dogs—and I brought up the fact that I had been in Las Vegas recently for business. I told them that a colleague and I had been there working with a company on their Service Awards program. Prior to our meeting, we walked through the facility asking workers how they felt about the company’s service anniversary awards program and what rewards they had received recently.

We approached the gentleman who had valeted our car. He told us that he is 22. I asked him how long he had been working at the company. Almost a year. I asked him what he would be receiving for his one-year anniversary. He said, “I don’t know. Do they give us something?” I told him, “Yes. They’ll give you a lapel pin.” To which he replied, “What’s a lapel pin?”

Everyone at the table laughed. Then our 25-year-old, Silicon Valley friend said, “What’s a lapel?” Fair question for a young, high-tech nerd who wears flip-flops to work.

When it comes to service awards, you might want to start thinking more strategically. Think hard about your employee population. Who are they? What motivates them? Is your service awards program encouraging them to stick around? It might just be time to revisit your Service Awards program. Here’s your first step.

What would be a meaningful service anniversary experience for you?

It’s Not Fair! – Why “Fairness” Matters in Employee Recognition & Reward

by Traci Pesch

It's Not FiarRecognize This! – Research shows our brains are built to perceive fairness as rewarding in itself.

Any parents out there? What’s the most common refrain you hear from your kids? In my house, it’s “That’s not fair!” It can apply to anything – who got the extra chicken finger, who got to pick the movie, who got the comfy chair for movie night, who had to go to bed earlier.

It turns out, my kids’ brains are hardwired for this kind of behavior. Actually, we all are.

Research reported in showed:

“We have an inbuilt idea of fairness as well as a learned one. The researchers, led by Alexander Cappelen at the University of Bergen in Norway, had volunteers perform routine office work for various amounts of time. Then the subjects were put in an MRI machine and told their monetary reward would be split with another participant. This unequal split sometimes reflected the amount each had worked, and sometimes didn’t. When someone found they were receiving more money, the striatum lit up — but it lit up even more when they had worked longer than the other person. In other words, the brain perceived the fairness of the division at a very low level.”

Fairness matters. And that’s why we talk about the need in employee recognition programs to calibrate awards to the level of effort, contribution, and result, among other factors. Think about it. Let’s say you worked on a team project, but through some investigative work, you were solely responsible for the discovery of a system malfunction that could have saved the company millions over the next several months. The entire team is praised for the discovery and every team member is equally recognized with a reward that has an economic value of $100.

You and everyone else on the team know it was your discovery that made the difference. You, of course, feel slighted. But here’s the interesting finding – your fellow colleagues are also upset on your behalf. It’s not “fair” and everyone knows it.

Calibrated award levels let givers of recognition choose the appropriate award based on several factors (proactivity, scope, impact, ownership, and time investment) to ensure the recipient’s experience is memorable, enjoyable and – yes – fair.

How fair are your employee recognition and reward practices?


3 Things Real Leaders Do to Shape Company Culture

by Derek Irvine

Image of businessman adding color to black and white worldRecognize This! – Effective cultures are proactively created by recognizing and reinforcing desired behaviors in every employee, every day.

Among my list of favorite authors, thinkers and change agents is Steve Kerr. His book Reward Systems: Does Yours Measure Up? is one I often recommend for its common sense approach to recognition and reward. As the former Chief Learning Officer and head of leadership development for both GE and Goldman Sachs, Steve Kerr is also well known for his seminal article “On the Folly of Rewarding A While Expecting B.”

He’s continued to educate along that theme, using the recent quality and safety challenges at GM as an example. In a Harvard Business Review blog post, Steve concludes with asking why it is so out-of-the-norm and courageous to behave in ways that demonstrate the behaviors the company has said it desires (namely: product quality, safety, transparency and integrity).

I encourage you to read the full HBR article for Steve’s three-step process for how to align your recognition practices with your mission and objectives. I particularly want to call your attention to this recommendation:

“Make a list of the behaviors you are currently measuring… Then compare each of the behaviors on your [list behaviors that you want to see “more of” and “less of”] to the list of behaviors you’re currently measuring. Put a circle around the behaviors you are not now measuring. This is your danger list! If a behavior you care about is not being measured:

  • Your employees are likely to conclude that it isn’t very important, and will act accordingly.
  • You aren’t able to provide skills training (in cases where the problem results from poor skills rather than low motivation).
  • You aren’t able to provide feedback about the behavior, either informally or in performance reviews, so how can people improve their performance even if they want to?
  • You aren’t able to reward the people who are doing what you want. Nor can you penalize people who are not doing what you want.

“Some people will do what you want anyway, for personal reasons, but effective leaders create cultures that inspire and motivate people to do the right things. Effective leaders don’t sit idly by while hoping their people will behave ethically and perform competently. And they most certainly do not create or permit the existence of cultures that encourage and reward bad behavior.”

Emphasis above is mine. “Effective leaders don’t sit idly by.” I would argue you can’t call yourself a leader at all if you choose to “let culture happen” rather than proactively stepping up to shape it to what you know is needed for organization success. As Steve so eloquently points out, real leaders:

  1. Define desired behaviors that support an effective culture
  2. Consistently, frequently and in a timely way recognize and reward employees who demonstrate those desired behaviors
  3. Use the data collected around behaviors recognized (and not recognized) to intervene and reinforce further or retrain where necessary

Culture creation can be a passive event. Successful companies, however, create the culture they want through the daily behaviors, actions and results of every employee.

How would you define your culture? What behaviors are recognized? Rewarded? Ignored? Are your leaders effective at creating a desirable culture?

Compensation Cafe: Reverse the Purse – Get More Out of Spot Awards than Annual Incentives

Recognize This! – The frequency, timeliness and specificity of spot recognition delivers much greater benefit than delayed annual awards.

In my most recent post on Compensation Cafe, I look at recent survey results from a a WorldatWork, Deloitte Consulting and Vivient Consulting report, showing employee incentive plans (as they term them) in various forms are alive and well (click through for the full report).


I go on to discuss why and how companies can derive much greater value from reversing the investment levels in annual incentive plans and spot awards. Go to Compensation Cafe to see the details.

Compensation Cafe: 3 Lessons Learned from Over-Reliance on Pay for Performance

Recognize This! – Recognitions serves a distinct and critical role from compensation. Don’t confuse the two.

Check out my post this week on Compensation Cafe in which I share the story of one team of highly skilled professionals in one very large organization and how a sole focus (poorly implemented) on compensation as a substitute for true recognition affects their daily motivation and engagement.

Specifically, I talk about 3 lessons learned from these bad practices:

  1. Moving the merit target.
  2. Hitting the pay range ceiling.
  3. “Promoting” to salary but reducing earnings.

All three instances led to one result – growing employee resentment. Of course, these examples speak to poor management practices and poor implementation of how pay-for-performance is intended in the organization. The obvious solution is better management training. But a first step should be an honest, direct conversation with the entire team on their value to the organization and how that is compensated.

Even better, would be to stop relying solely on compensation and pay for performance as a means of communicating to employees the worth of their contributions to the organization. Yes, managers should better implement the program as intended, but additional levers should be added – primarily, a frequent, timely and specific social recognition approach. Every day, encourage all employees to notice and appreciate the good work of their colleagues and recognize them for it. Make it possible for celebration and acknowledgement of success to happen in line with the daily work, stop killing employee desire to do the work, and see motivation grow.

Has the Merit Increase Run Its Course?

Recognize This! – Merit increases no longer offer the differentiation they once did for true “pay for performance.” Perhaps it’s time to consider new approaches.

It’s that time of year! You can feel it in the air. The anticipation… the preparation… the dread.

No, not Spring. The annual performance review. Many companies target the March/April timeframe for conducting the reviews and handing out merit increases. Except, of course, for those who choose to disassociate the review from the pay increase in an effort to communicate to employees that the review itself has nothing to do with raises. (This is futile, by the way. Everyone knows their raise is dependent on the review in some fashion.)

Too many employees (and managers, for that matter) muddle through the performance review process simply to get to the merit increase possibility on the other side. But how relevant is that increase in today’s workforce? Merit increases remain stagnant at about 3 percent (not much better than cost of living), and companies continue to sit on record profits, choosing to maintain and increase margins rather than hire or increase wages.

Ann Bares, editor of Compensation Café and author of the Compensation Force blog, recently dug into this more, asking:

“There are rumblings underfoot among compensation and HR professionals concerning the once sacrosanct annual merit increase and whether the time may have come to (really) shake things up.

“Should we be moving away from the one-size-fits-all, same-for-(nearly)every-employee merit matrix to something more differentiated, more strategic?  Is it time to reconsider the ‘once each year’ timing and look at other, particularly longer, alternatives?  Should we finally get serious about shifting some portion of this annual increase in fixed base over to some sort of variable opportunity?”

Ann is running a brief survey on just this topic, and I’m very interested in the findings. Long-time readers know I am not an advocate of the annual cash bonus (as it quickly becomes an expected part of compensation), and merit increases no longer hold enough differentiation to matter (low performers get 2.3%, mid performers get 2.5-2.7%, high performers get 3.0). We might as well be honest and call these “merit” increases what they really are – cost of living increases – and turn to new ways appropriately recognize and reward those who go above and beyond. And we should do so in a frequent, timely and specific way, instead of reserving our praise and appreciation for the annual review or annual bonus.

What do you think about Ann’s questions? Has the merit increase run its course?

Compensation Café Round-Up: Bonuses, Cash Rewards, How We Work, Retention and More

Recognize This: In this round-up of my last five posts, I examine challenges with incentives, bonus and cash awards when inappropriately applied as well as ideas for how working less can help us work more.

It’s a good many months since I’ve posted here a round-up of my posts on the Compensation Café blog. Since I posted there today, here is a quick summary of my 2013 Café posts. Click through on the titles to read the full posts.

Choosing the Right Currency for Compensation & Rewards (28th February 2013)

If you polled your employees and asked them, “What kind of rewards would you prefer?”, how do you think they’d respond? The vast majority of the time, the answer is: “Cash.” Of course we all want more cash. But what employees say they want for rewards, what actually works best to motivate employees, and what employees enjoy as rewards are entirely different things. In this post, I examine these issues in more depth.

Why Working Less Helps Us Work More (20th February 2013)

Looking at research and comments from Tony Schwartz, I examine the possibility that working less could actually help us work more. Don’t worry. I’m not advocating a 35-hour work week or two months as standard vacation policy. I am arguing for building renewal into the cultural rhythm of the organization. We need to consciously encourage our team members and colleagues to renew while at work. To, yes, work hard, but then take reasonable (and regular) breaks to renew, to catch up with friends and colleagues, and – through those casual conversations – to innovate.

Bonuses, Perks and Benefits – Finding What Works (and What Doesn’t) (8th February 2013)

In this post, I shared my take on several bonus and benefit programs that hit my newsfeed. I discuss the challenges and what you can do instead with perks programs that reward only a select few, mandatory sick leave and culture as the driver of all other rewards.

Why Employees Actually Leave (Hint: It’s Not Money) (29th January 2013)

I attended a webinar given by Leigh Branham, author of The Seven Hidden Reasons People Leave. In this post, I share the main points I learned in the webinar:

  • A significant gap exists between why managers think employees leave and why they really do.
  • Better pay alone or more perks cannot fix the problem of employees feeling undervalued and unrecognized.
  • Pay and benefits are growing as areas of concern in recent years.

I also share my lessons learned:

  1. Create survey instruments or methodologies that deliver more reliable information.
  2. Respond to the reality of today’s workforce, not the experiences of the past.
  3. Restore benefits and pay as quickly as possible.

More Unintended Consequences from Ill-Planned Incentives (8th January 2013)

What motivates us at work is ultimately a very personal and individual topic, though generalities do apply. That’s why I get a chuckle out of research study after research study showing we nearly always guess incorrectly what would motivate others. In this post, I share two explicit examples of this:

  1. Perfect Attendance Awards Incent the Wrong Behaviors
  2. Unintended Consequences of Incentives at the Olympics

When Chocolates and Wine Aren’t Appreciated as Rewards

Recognize This! – If you’re going to invest in employee recognition and rewards, make sure your rewards measure up to your recognition.

My team of consultants and I regularly engage with clients to help them assess and analyze their employee recognition and reward programs. We do this on many fronts, from sheer uncovering of recognition activities happening in facilities around the world to budget investment to benchmarking and best practice recommendations.

We analyze everything from how recognition takes place, how deeply its embedded into the culture, who’s encouraged to participate as both nominators of others for recognition as well as potential recipients, and process elements including frequency, timeliness, presentation, etc.

A part of this, of course, is the reward mechanism used. In this blog I tend to emphasize the recognition part of the recognition and reward equation because getting recognition right is the foundation to proactive culture management, crowdsourced performance and so much more. But we cannot ignore the rewards. Rewards are more than the icing on the cake. They are the “trophy value” for employees – the long-lasting reminder of how much the company values and appreciates the employee and their contributions.

Don’t Neglect Rewards in Effective, Strategic Employee Recognition Programs

That’s why offering a wide range of rewards is critical. Employees must be able to choose from a vast selection of rewards that are personally meaningful and culturally relevant for them – especially in global organizations. Offering hundreds of rewards options to US-based employees and only a dozen options to China-based employees is lazy at best and insulting to the employee at worst.

More to the point is being sure the recipient of recognition is the one choosing their reward, not the giver (whether that be a peer or a manager). Case in point – just last week my team shared amongst ourselves some reward practices we’ve uncovered in these analysis projects. One in particular stuck out to me. Managers always selected the reward for the recipient, and they could only choose from two reward options – chocolates or wine.

What if the recipient is a diabetic teetotaler, or merely allergic to wine (or chocolate)? What if the person is on a diet? Now the well-intended reward is received as a useless slap in the face.

Let the Recipient Choose

While an extreme example, it highlights the importance of letting the recipient choose their own reward. I’ve shared before stories of why manager “goodie drawers” are a bad idea (giving a gift card to a steakhouse to a vegan employee; giving tickets to a local theatre production to an employee with kids for whom the securing and paying for childcare makes the night out not worth it; the iPod given to a deaf employee).

The bottom line: Let the employee choose their own reward from millions of options, in their own neighborhood or anywhere around the world.

What’s the most insulting “reward” or gift you’ve been given?