Everything You Thought You Knew About Recognition Is Wrong

January 27, 2004

W hat has happened to recognition programs in our country today? Once a source of great pride and prestige, formal recognition programs are now perceived as stale and irrelevant by most employees, a by-product of a bygone era. While companies have been investing more money in such programs, their effectiveness in terms of improved morale and performance has steadily declined.

"Always have" doesn't mean "always should"
    Let’s look at a few examples of formal recognition programs that tend to be out of step with the times and preferences of today's employees:

    1) Years of Service. In stable, predictable times, in organizations where employees have a job for life, marking milestones toward retirement makes a lot of sense. Today few, if any, employees take jobs expecting to be there 20 or 30 years later. Some incentive companies are quick to point out that almost every North American company offers length-of-service awards. It’s as if this fact, in and of itself, is some sort of proof that they work.

Just because such recognition programs exist, that doesn't necessarily mean they are a source of motivation for today's employees. In one Fortune 500 organization with which I recently worked, over half of all surveyed employees didn't view years-of-service awards as a form of recognition at all. In another organization, a long-term employee told me they had to go to personnel and demand their 20-year pin! (She showed it to me--it was still in the box.)

    In most organizations today, years-of-service awards have become more associated with endurance than performance. They've become a badge of honor that "I survived"--all the more so if the organization has experienced a merger or layoff in recent years. Sure, you want to retain your employees--especially your top performers--for as long as possible, but it's increasingly not the clock they get on their 10-year anniversary that keeps them with the organization and energizes them to do their best work.

    Holding celebrations and giving gifts for employee retirements or new-employee orientation are versions of the same thing.

    2) Employee of the Month. An equally questionable, although widespread, recognition practice is the employee-of-the-month program. I know of one organization where management periodically announces the employee of the month at the managers’ team meeting, everyone applauds, and then the person in charge says: "If anyone sees George, tell him he was selected for this honor!" More often than not, no one ever does.

    We don't need employees of the month as much as we need employees of the moment, and we need them each day, every day. To select one person from many employees tends to make the majority feel unappreciated at the expense of the one individual who is honored. As a result, the honoree may feel guilty or even embarrassed.

    Add to this the unwritten rule that you can't be selected more than once for the honor, and management ends up scrambling to find someone who hasn't yet received the award. The selection criteria become skewed and soon the focus is just on finding someone--anyone--to give the award to. Once again, this sends the message to employees that if they just hang in there, they too will eventually be recognized.

    3) Attendance Awards. With the onset of flextime, telecommuting and virtual work teams, work is increasingly what we do more than where we are. The technologies of cell phones, e-mail, pagers, Palm Pilots and faxes easily connect us all during designated "working hours," whenever those may be. In some work environments, with some groups of employees, being physically on the job and on time is critical. These positions are increasingly fewer in number.

Where did recognition programs go wrong?
    How did we get to this state of affairs? Recognition efforts in the United States have lagged shifts in employee preferences for several reasons. First, companies look backward to "what we've done," thus making their evaluations of programs historical rather than current. They don’t take the time and make the effort to determine existing employee preferences. Companies tend to be reactive rather than responsive to what motivates today's employees, looking to change or improve things only when there’s overwhelming evidence that what they're doing isn’t working. If other organizations are continuing with similar formal recognition programs, the status of such programs is perpetuated, even as they become stale, stagnant and irrelevant.

    Second, the $27 billion-plus incentive industry, with its focus on moving merchandise and promoting expanded expenditures on existing recognition programs, hasn't helped the situation. The incentive industry has not picked up on what's really important to employees today and is more focused on continuing to move and customize merchandise, awards and plaques than on motivating employees or improving performance. Once a program has been budgeted, it’s easy for an organization to continue that funding year after year. It’s difficult to stop and reassess whether the money is being spent wisely, or even if there is any return at all.

    Third, the fact that employee values and expectations have changed has amplified the disconnect that exists today. Today's employees expect to have more meaning in their jobs from their very first day of work, more involvement in their jobs, more thanks when they do good work, more flexibility in their working hours and more balance between their work and personal lives. Recognition practices have not kept up with these changed employee expectations.

"Too many mugs"
    Consider merchandise awards. Often the stuff that employees are given to motivate them has become a joke. In other instances, it has become an outright insult. Sure, the first coffee mug you get for finishing a project is nice, but how many coffee mugs does one person need? Same with pens, T-shirts and even certificates of appreciation. Just yesterday I was reviewing employee focus group comments on the topic of recognition from a large client I am working with and noted that the employees were very clear about what they did not want:

  • "No pens, pen sets or watches"

  • "No clocks, paperweights or T-shirts"

  • "Too many mugs"

    From the employee perspective, trophies, plaques, nominal gifts and mementos all fall into the same category. And printing your organization's logo on the merchandise doesn't magically transform it into something of unique value, especially if the object is something that the employees could have purchased themselves anyway.

    Incidentally, a note to the incentive industry: Please stop confusing automation with innovation. Offering "point programs" online helps more efficiently administer existing recognition programs, but it doesn't make them more effective, nor mean that they should be done at all! It doesn't help much to save companies time and money if what they're doing are the wrong things.

Recognition: Not what it used to be
    Companies have to break the bad habit of recognizing employees only by occasionally giving them stuff. They must realize that for most employees, most of the time, how they’re treated on a daily basis matters more to them and most effectively communicates that they are trusted and respected, and that they are important.

    Even traditional forms of recognition such as achievement awards, cash substitutes (such as gift certificates or discount coupons), nominal gifts or food, and public perks (such as parking spots) have diminished in importance for most of today's employees. These all ranked at the bottom of employee preferences in research I've conducted across industries. As one participant commented in the focus group mentioned above: "Employees no longer hang up their certificates."

How do you recognize employees?
    Employees’ faith in institutions has drastically declined; they view themselves as working more for other people than for organizations. It's those people they work for--and with--that can most make recognition meaningful and special. In a recent study I conducted, 78 percent of employees indicated that it was "very" or "extremely" important to them to be recognized by their managers when they do good work, and 73 percent said they expected that recognition to occur either "immediately" or "soon thereafter."

    So what is most important when it comes to how employees prefer to be recognized today? Ironically, it's the simple forms of sincere thanks that still mean the most. In fact, of the top 10 recognition factors that employees indicated were important when they did good work, four were types of praise--personal, written, electronic and public--each typically generated by those individuals they hold in high esteem at work, given in a timely, sincere and specific manner.

    Other top-ranked motivators were support and involvement, that is, providing the information that employees need to do their jobs, involving employees in decisions (especially those that affect them), asking employees for their opinions and ideas, and supporting them when they make a mistake. Autonomy and authority, such as allowing them to decide how best to do their work, allowing them to pursue ideas they might have for improving things, and giving them a choice of work assignments, also ranked high for employees. So did flexible working hours, learning and development opportunities, and the availability and time of their manager.

    What do these factors have in common? They are all intangible, interpersonal and highly situational. Granting the above items in response to good work when it occurs is the most desired form of recognition cited by today's employees. These actions say, "I'm here as a person, not just a manager, when you need me the most." One employee recently told me that she was having a tough time with some personal issues, and during a meeting her manager said: "Mary, I want you to go home, take care of what you have to there, and come back when you're ready." She took a few days off and came back to work ready to dig in. "That happened over seven years ago," she told me, "but I think about it and the courtesy and consideration that manager extended to me almost every single day."

The shift to informality
    Caroline Strumbly at Progressive Insurance illustrates the shift she's seen in her organization: "My group within our company is starting to lean toward less formality around recognition. Recognition is being pushed into the managers’ hands (along with the budget). Managers will be responsible for coming up with individual programs to recognize their team members, moving away from structured recognition to more personalized forms of recognition."

    This shift toward less formal recognition makes sense because that is what employees today say they most value. More personal, "here and now," sincere thanks and forms of recognition are preferred over more formal programs, which are less frequent and less personalized, and often have lost relevance, meaning and excitement in most organizations today.

A balanced approach
    You don’t have to do informal recognition to the exclusion of formal recognition. My recommendation is that you ask employees (via a survey, assessment, focus groups or all of the above) what they value from a list that includes current programs and practices and potential new items, activities and practices. See how they respond. Then, once you have a motivation baseline of your employees' preferences, systematically move away from those things that your employees no longer seem to value and toward those things they seem more excited about.

    This allows you to discontinue programs and practices that are not valued with a minimum perceived "take away" loss, because you’re acting on their feedback (which itself will be motivational to most employees) and adding things that they have indicated they value more highly. This process will also validate those things that are currently working and provide an energy surge to your overall recognition efforts, making them more fresh, fun and dynamic.

Joint effort
    There’s no substitute for the personal touch, and for real-life communication with your employees about what they value, need and want in order to be more effective contributors to you and the organization. Effective managers today know this and realize that it's what you do with your employees more than what you do to them that counts.

You'll get the best from your employees and keep them the longest when you show them that you personally care. And the best way to do that is through your daily efforts in recognizing and thanking employees when they do good work, not through any number of formal recognition programs.