Harvard Business School had one of its professors come out with a jointly written study they called The Dirty Laundry of Employee Award Programs: Evidence from the Field.
The authors of the study essentially conducted a cost – benefits analysis of an attendance award program that was implemented in an industrial laundry plant. They concluded with a cautionary note on using award programs because of the unintended effects from of using rewards.
Now the unexpected outcomes included their most productive and punctual workers actually demonstrating 6% to 8% less productivity along with employees gaming the program to gain an award. Productivity across the entire plant was reduced by 1.4%.
As soon as I hear gaming of a system I know there is an ineffective rewards strategy that’s been implemented. Whether it’s ineffective identification of the target behaviors; poor measuring stick of the right behaviors; wrong reward associated with the wrong behaviors, etc. You get the idea. Poorly designed programs opened the doors to manipulation.
Please read the overview or the full study to learn what this laundry company did. However, be very careful not to malign all awards and rewards programs with a dirty paintbrush. Either read my comments ahead of time or after reviewing the study, come back and tell me what you think.
Here is my response to the Harvard Business School study:
Strangely enough many organizations still reward, or at least recognize individuals with perfect attendance. Some companies give cash or gift cards and others just post names of employees who have perfect attendance on their company intranet site or write them up in newsletters or magazines.
A reward is “something given or done (sometimes monetary), in return for meeting pre-determined goals, service or achievement”. The problem with perfect attendance reward programs is that companies are rewarding employees for something they have no control over and cannot achieve on their own merits.
Either that or you are motivating people to come into work when they are sick just so they can claim that reward at the end of the designated time period.
Straight Shooting Tips for Dealing with Absenteeism
- Re-evaluate any perfect attendance reward programs you have. Ask yourself if you are rewarding the presence of unhealthy employees or just giving a bonus to those who are naturally healthy? What are you really rewarding?
- Ensure all managers are well versed in absenteeism management. Regularly review company policies and steps necessary when absences occur. Managers setting clear expectations and consistently holding employees accountable for absences, while being sensitive to genuine needs, make the greatest impact on reducing absenteeism.
- Recognize and manage the different types of absentees. Saul Gellerman in his book “Motivation in the Real World” identifies 4 Types of Absentees and how to treat them. Provide social praise and attention when the Habitual Absentee is actually at work; move the Conformist Absentee to a department or unit which has lower absentee levels; and help the Escapist Absentee to finally find their life purpose and a job fit either within the company or elsewhere; and of course, the Legitimate Absentee you need to make sure they are medically or socially supported.
- Use recognition versus rewards for perfect attendance. If you must make public acknowledgement of perfect attendance, use regular recognition rather than rewards. Best make it at the unit level where the employee’s immediate manager or supervisor can mention achievement in a staff meeting and perhaps present a framed certificate.
- Manage human motivation and work-life balance. In reality, managing absenteeism is about knowing your employees very well and what their motivations are. It is developing trust so they can inform you of their life and family issues. Then you just have to manage work around their life.
We have to be very careful with how we set up and use awards, recognition and rewards correctly: identifying the target behaviors properly; measuring the right behaviors the right way; giving the right rewards for the right actions.
You can’t just use the dirt from one awards program to suggest all awards programs will create unintended consequences. Just sort your light and darks, insert the laundry detergent, and follow all other directions carefully.
When you understand the right way to use awards, recognition and rewards properly everything will come out in the wash.
Q: How have you seen award, recognition or reward programs given a bad reputation because of flawed strategy and design?
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.