5 Easy-To-Spot Signs Of Potential Reward Problems

You may have seen it elsewhere or experienced it. Hopefully, you’re not dealing with it right now.

Runaway budget spent on gift cards, merchandise, points, and even cash rewards. Negative attitudes and perceptions of employee recognition. 

Let me give you just five indicators that you might have some potential reward problems lurking in the shadows of your well-intentioned recognition and reward programs.

Sign #1: Calling your programs Reward and Recognition programs.

You might think, well, that’s exactly what they are! And I would have to agree with you. Too many organizations have rewards included in their programs, but they insist on only calling it a recognition program. Employees think “recognition” equates with rewards and do not understand the concept of being acknowledged without receiving a reward.

Throughout my over 20-year experience in employee recognition I have repeatedly observed the problem associated with calling programs reward and recognition programs VERSUS recognition and reward programs.

I know it may sound like just semantics, but there is an interesting phenomenon called the primacy effect in psychology. The primacy effect is a form of cognitive bias where an individual recalls information presented at the start of a list better than information at the middle or the end. 

In our example of naming a program, employees would recall and focus more on rewards than they would on recognition. By reversing the order of the name of the program to recognition and rewards, they emphasize recognition first.

In addition, rewards are successive to recognition. You would typically recognize a single occurrence of a positive behavior first. You would not give a reward until a person reached an exceptional performance level or the person consistently outperforms or has multiple successes. Therefore, recognition comes first and then you might give someone a reward if they went above and beyond their regular work.

Sign #2: People don’t know the difference between recognition and rewards.

I vividly recall one organization where I consulted with on creating a recognition strategy for them. 

First, I conducted individual interviews and focus groups with a sampling of employees and managers to learn about their perception of their company’s recognition and reward programs. 

One individual I spoke with could not understand the concept of recognition. For him, recognition only meant rewards. When I tried to define both for him, he could not understand recognition at all, and that’s not what his company did.

For the record, here are some definitions I created that help delineate between these two concepts. 

  • Rewards are tangible, monetary or experiential items given to a person or team, in return for reaching pre-set goals, reaching a significant achievement, or special service performed.
  • Recognition is mostly an intangible expression of acknowledgement and valuing of an individual or team, for their positive behaviours, their personal effort or contributions they have made.

As I have often quipped in my presentations, “when you give recognition you don’t have to give a reward. But when you give a reward, you must always accompany it with recognition.”

Sign #3: More rewards are being requested by employees and managers.

If rewards are the only game in town and hardly anyone is giving each other meaningful and effective recognition, then people will gravitate toward rewards.

Again, and again, when the major focus of your recognition and rewards programs is rewards, employees and their managers will ask for more rewards. It’s like the musical Oliver Twist, where the lead character goes forward with his empty bowl and asks, “Please Sir, I want some more…”

Saw this just the other day. It was not the first time and I am sure it won’t be the last.

This organization conducted an employee survey about their “reward and recognition program”—remember sign number one.

The last question was the typical open-ended survey question soliciting input, and suggestions, or ideas for improvements to their program.

Most responses listed more things about rewards than they did on system suggestions or better and more frequent recognition.

Suggestions included:

  • More points.
  • More branded gift items.
  • More brand name gift cards.
  • Better gifts.
  • More variety of gift items.

As soon as I saw the frequency of reward comments to recognition feedback, I knew there was a reward problem. Sure enough, further exploration showed how they had allowed some departments to exceed budgets. Reports came in that some managers used the rewards part of the program to make up for an inability to give salary increases.

Sign #4: Loosely defined criteria for giving various valued rewards.

When I have to zero in on the reward section of a recognition and reward program, I always ask to see the criteria managers used to determine when to give what reward value for specific purposes.

Unfortunately, all too often, they have loose criteria, so managers take a guess at which amount to give. Most will err on the side of generosity since it appears to be open season for rewards. 

Then you have a reward budget overspend.

Steve Kerr suggests in his excellent book, Reward Systems: Does Yours Measure Up? three simple solutions to this problem.

  1. You must define the performance you want to reward in actionable terms. Know what the ideal outcomes look like. Create levels of descriptive behaviors or outcomes, so both employees and managers know exactly what they have rewarded.
  2. Measure the right things and use the right measures. Are you measuring similar behaviors or outcomes? Was the task you’re thinking of rewarding difficult or easy to do? Is this outcome within their role or above and beyond?
  3. Reward the right things and use the right rewards. Don’t reward zero-safety report submissions. Managers will fudge the reports to get the reward. You should reward examples of safe practices on the job. 

The solution here is to create a decision tree matrix that allows managers to know exactly what level of reward to give an employee under each circumstance. Managers should see how to reward outcomes or behaviors that occurred once or consistently, the level of impact the employee’s actions had on the organization, the number of people affected, whether few or many, and things like alignment with the organizational culture and achieving business goals, etc.

Sign #5: Employees don’t exactly know what managers have rewarded them for.

The worst case of this sign was a company that used a level based—bronze, silver, and gold—cash-based reward program.

Managers would issue or approve a reward to an employee and may or may not have communicated this directly to the employee by email or face-to-face. The problem was that the dollar amount would take one or two pay periods after the employee outcome before it showed up on their pay statement. There it sat. A dollar amount in their pay with no explanation.

Employees shared with me that by the time they received the cash-reward they didn’t have a clue what it was for. It lost all meaning.

Too often we treat rewards as if they communicate what our intentions are. 

Business philosopher Jim Rohn said it best, “It’s okay to send flowers, but don’t let the flowers do all the talking. Flowers have a limited vocabulary. About the best flowers can say is that you remembered.”

Always present or give rewards accompanied by written or spoken words of explanation and recognition. Help people know how much you value them as a person along with their contributions.

Quickly check out the rewards in your recognition and reward programs and make sure there are no looming problems on the horizon for you.

Recognition Reflection: Do you call your programs recognition and rewards or reward and recognition programs?

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