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Getting Happy with the Rewards King

April 1, 2003
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Related Topics: Recognition, Featured Article, Compensation, Benefits
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As an expression of gratitude, managers at a bank in Horsham, Pennsylvania,don chef hats and aprons to flip hamburgers for employees at a "Grill YourBoss" cookout. At a seminar-planning firm in Virginia Beach, female staffmembers are thanked with complimentary pedicures. Employees at a Chicagohealth-care company are rewarded with balloons, belly dancers, and a singer in agorilla suit.

    Why are these companies doing this? Because Bob Nelson says so.

    Nelson, best-selling author of 1001 Ways to RewardEmployees, has firmlyestablished himself as the rewards king in a field packed with hundreds ofmotivational speakers and writers who talk the same language. He has platoons offans who applaud his basic premise: While money is important to employees,thoughtful recognition motivates them to perform at higher levels.

    He also has critics who dismiss him as a self-promoter, arguing that givingincentives such as parties and other treats is foolish and condescending. "Rewardsare, at best, a waste of time," says Boston-based Alfie Kohn, author of thebook Punished by Rewards. Kohn and other detractors charge Nelson with promotingsimplistic, feel-good solutions to complex problems such as low morale and highturnover. "Working with employees, bringing them into decision-making, helpingto design a democratic workplace takes time, talent, skill, care, and above all,courage," Kohn says. "1001 ways to manipulate people to jump through hoops"can’t address those important issues--though "throwing baubles and trinketsat your employees is a hell of a lot easier."

    Nelson counters by saying that the system isn’t the problem. It’s thepersonal relationships employees have with their managers that are critical toproductivity and performance. Managers can’t force employees to like theirjobs, but they should create an environment that encourages workers to want toexcel, and should provide meaningful rewards. The effectiveness of incentiveshas been substantiated by more than a century of research, adds Nelson, whoseown credentials include a master’s degree in organizational behavior fromBerkeley, a Ph.D. from the Drucker Graduate School of Management at ClaremontGraduate University, and years of experience working for top executives such asmanagement guru Ken Blanchard.

    Nelson, a 46-year-old father of two who lives near San Diego, is sopassionate about his work that he has trouble separating it from his personallife. At home, he and his wife, Jennifer, use his rewards philosophy in raisingtheir two children, Daniel, 12, and Michelle, 7. Rather than badgering themabout cleaning their rooms, for example, they make a real effort to give them apat on the back for a job well done. They try to make sure the "ratio ofnagging to positive encouragement" is higher on the positive end, he says.

    His message is, of course, a harder sell in a soft economy, when manymanagers argue that employees should be happy simply to have a job. To add morecredibility to his work, Nelson recently teamed up with IBM consultant DeanSpitzer to write his new book, The 1001 Rewards & RecognitionFieldbook. "Myphilosophy on rewarding and recognizing employees is to be real with employeesin an up-front and sincere way," says Nelson, who earns $12,500 a day on thespeaking circuit. "Managers need to think about what their employees need andwhat’s important to them" when they design incentive programs, he says.

Deep roots in human resources
    Nelson started working in human resources and writing books right out ofcollege. After earning a communications degree in the late 1970s at MacalesterCollege in St. Paul, Minnesota, he got a job in human resources at a computercompany and soon became known by friends as an astute job counselor. One Sundaymorning he decided to write his ideas down. He was only 25 when his first book, TheJob Hunt, was published. It sold 60,000 copies.

    It was in 1985 that he noticed a review of one of Blanchard’s books in theWall Street Journal and decided to give him a call. He landed a job interviewand was hired to co-author a business textbook with Blanchard. Nelson workedthere for 10 years and was vice president of product development when he left tostart his own consulting company in San Diego and return to graduate school. Onenight his management professor at Drucker lectured on positive reinforcement andhow there was little application of the theory to business. Nelson wasintrigued. He decided to prove that positive reinforcement is valuable in theworkplace, an idea that spawned 1001 Ways to Reward Employees.

    "I got home at midnight and told my wife that I wanted to write a bookfilled just with ways to praise and thank employees," Nelson says. "I didn’twant to fill it with boring studies from other Ph.D.’s. I wanted to make thecase through example."

    The book sold 1.5 million copies. Soon after its release, speakingengagements began pouring in. Five years ago he started his own business, NelsonMotivation, Inc., in San Diego, and he has since worked with more thantwo-thirds of Fortune 500 companies. What makes Nelson stand out, says one ofhis industry peers, is that he offers practical help. "People need ideas"for motivating employees, says Barbara Glanz, an author and speaker onregenerating spirit in the workplace. "They don’t need a lot of philosophyand theory and concept."

    Nelson’s ideas helped Rhonda Rhodes, vice president of human resources atUniversal Orlando, replace the company’s traditional recognition programs,such as raffle drawings for employees with perfect attendance, with programsthat reward employees for accomplishing a variety of goals. When restaurantworkers meet sales goals, they win pizza parties and their managers do theirjobs for them for an afternoon. With a "Cause for Applause Card," workerswho see other employees making an extra effort receive a card describing thebehavior. The cards can be redeemed for prizes such as movie tickets and freemeals.

    Nelson encourages managers to reward employees daily. The item is lessimportant than the action. A manager at Hewlett-Packard Co., for example, oncehanded an employee a banana from his lunch after the engineer solved a difficultproblem, and over time the Golden Banana Award has become one of theorganization’s most prestigious honors. Nelson also wants managers to thinkbeyond monetary rewards.

    That’s increasingly important in a weak economy. Memphis-based FedExExpress got ideas for low-cost rewards from Nelson last spring. In addition toformal recognition programs, FedEx managers reward employees by washing theircars, shoveling snow for couriers, and putting retirees’ names on banners hungin warehouses. The company also holds a drawing to pick the name of an employee’schild to be inscribed in large letters on the nose of each new airplane in itsfleet of 330 planes. The winner’s family is flown to Memphis for thechristening of the plane.

    Jack Wilkie, a vice president at 7-Eleven, Inc., hired Nelson to speak before3,000 employees at the company’s anniversary last July. "He came across asyour older brother, like he was letting you in on a little secret," Wilkiesays. "He had genuine humor. No corny jokes." A few weeks later, Nelsoncalled Wilkie to check in. "He wasn’t selling anything, pushing anything....It’s just a part of who he is." Nelson also welcomes his audiences tocontact him, giving out his e-mail address and responding to all messages,usually about 30 a week. At his own 10-person company, he rewarded his team witha trip to Disneyland in a limousine for meeting their quarterly financial goals.For an employee who collects toy sports cars, Nelson rented him a Porsche forthe day.

The rewards debate
    It’s 11 a.m. at a conference hotel in Philadelphia, and Nelson has justsauntered up to the podium to speak to 300 managers about creative strategiesfor rewarding employees. He is dressed in a crisp suit--accented with ared-and-yellow Winnie the Pooh tie. He has no trouble getting the throng tolaugh at his jokes about humdrum rewards like anniversary clocks andemployee-of-the-month plaques. Usually his audiences already believe in rewarding employees. The biggest challenge is reachingphilosophical opponents. Almost half of U.S. corporations with 1,000 or moreemployees do not use incentives, according to the 2001 Incentive Federationstudy.

    As one of Nelson’s most vocal critics, Kohn believes that rewards cannotimprove performance, and points out that there is a lot of research showing thatthe more people are rewarded, the more they actually lose interest in the workthey’re doing. He contends that Nelson’s approach assumes that problems occur because workers are unmotivated, when the problem is, in fact, theworkplace system itself. He proposes that employers motivate their employees bymaking sure they like their jobs and are involved in decision-making.

    Workplace consultant Carleton Kendrick views rewards such as the boss servingemployees ice cream as "condescending" and "one-shot deals ofhappy-feel-good." Kendrick, a Boston family therapist, says workers truly wantmore ways to help balance work and life, not ice cream. Others say thatemployees would rather earn more money than receive rewards. That was thesentiment of supervisors at the Defense Supply Center in Philadelphia, whichbuys military supplies. Nelson recently was at the facility to give a talk andhad trouble convincing some managers that money is not the top motivator eventhough the theory is backed by numerous studies. "You have a family, kids, twoincomes--and money helps," says Gordon Ferguson, one of the managers who isn’tswayed by the research.

    Nelson says he agrees that the best motivation comes from within. But inreality, he points out, most jobs are not intrinsically motivating. Customerservice or retail jobs, for example, can become mundane because of repetitionand pressure. To get employees excited about their jobs, managers must make suretheir work supports their career goals, Nelson says. If managers give meaningfulrewards, employees are motivated.

    For Nelson, selling his message is tougher in today’s lousy economy. Somemanagers argue that it’s too hard to measure the return on investment withrewards. According to Nelson’s own Ph.D. research on the subject, managers saythey don’t give rewards because they don’t have time, their employees didn’tvalue previous rewards, and they’re worried that employees will take advantageof them. To convince more corporate leaders of the benefits, Nelson shows thefinancial consequences of not rewarding employees--such as the cost ofincreased turnover. Most of all, he emphasizes that rewarding employees is easyand inexpensive, and almost always has a lasting impact.

    "A sincere word of thanks from the right person at the right time can meanmore to an employee than a raise, a formal award, or a whole wall ofcertificates and plaques," Nelson writes in 1001 Ways to Reward Employees. "Partof the power of such rewards comes from the knowledge that someone took the timeto notice the achievement, seek out the employee responsible, and personallydeliver praise in a timely manner."

Workforce, April 2003, pp. 47-50 -- Subscribe Now!

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