Did You Just Transact or Relate With Someone?

One of the interesting differences between rewards and recognition is the fact that rewards are always transactional in nature whereas recognition is strictly a relational experience.

Negotiating Away With Rewards

Whenever you use rewards you will clearly see that each time you do you are creating a negotiated agreement between yourself and the intended recipient. This is never the case with giving recognition to someone. Essentially, use of rewards dictates that if you do “X” behavior, action or performance then, and only then, will you get the “Y” reward or incentive in return.

Rewards are always great for attracting a person to join an organization. When you lay out the compensation, benefits and perquisites to a person being recruited, it is usually the icing on the cake for influencing someone to come to your company. All of this on top of the actual job description and organizational purpose that was promoted to you.

Striving to Relate With Recognition

Recognition is so much more a relational exchange between people. You will see that whenever you recognize or acknowledge someone it is a sincere relational expression or act of caring which you demonstrate. Recognition is all about building positive relationships between the giver and receiver of recognition. Rewards are more about building up bank accounts or material assets for an individual.

You will find recognition is perfect for actually keeping employees at a company. I’ve noticed some employee engagement surveys ask a question something like, “if you were offered the same job and pay at another company, would you leave us?” In other words, all being equal as far as the job description, pay, benefits, etc. – it is how you are treated, respected and valued which will determine whether you will stay with an organization or not.

Rewards and Recognition In The Field

Frank Giancola compiled some great research on rewards and recognition in the 3rd Quarter 2010 issue of the WorldatWork Journal. The context for this one field study in using rewards and recognition is with employees in a fast food restaurant chain.

For the business and performance metrics managers monitored individual store profits, the drive through times, and the level of employee turnover.

Managers using rewards paid out specific lump sum amounts of $25, $50 or $75 per employee dependent on the increasing number of behaviors observed per employee.

Meanwhile, at other restaurant locations, managers using just recognition posted charts of the group’s performance on key measures such as drive-through times near the restaurant’s time clock. Managers were also trained on how to give positive recognition to individuals and teams for performing specific identified behaviors.

Both rewards and recognition influenced higher performance than the control group of restaurants.

As you can see from the chart above, both rewards and recognition impacted the desired performance metrics. Notice how recognition and performance feedback exceeded the use of money in all measures except employee turnover. Keep in mind these were minimum wage job positions in an industry with high turnover.

The nature of the work, professional levels, and desired performance outcomes will impact how much rewards versus recognition will make a difference on the results.

Question: What differences have you observed from using either rewards or recognition?

Roy is no longer writing new content for this site (he has retired!), but you can subscribe to Engage2Excel’s blog as Engage2Excel will be taking Roy’s place writing about similar topics on employee recognition and retention, leadership and strategy.

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