You Can Get Unstuck From Rewards With Recognition

One of my Rideau colleagues recently shared with me their observations of how many mid- to large-sized businesses are challenged with how to transition more away from rewards towards recognition.

Then within a week of this conversation one of our blog subscribers at a financial services company wanted to know how to reduce their budget costs and lessen the amount of gross up tax spend on their gift card rewards program.

So, it seems the topic of rewards is in the air again!

Since many companies are using rewards it only makes sense I should share with you how best to transition from, or lessen, your use of rewards and move towards more recognition, or at least a happy medium between the two.

Shifting the Dependence on Rewards

The problem many companies face is they are operating solely on a reward paradigm mindset and rely on programs that transact incentives and rewards like they were casino slot machines.

I think it is important to call a program a reward program when it relies heavily on rewards. Don’t hide behind calling it a recognition program when it is not.

You need to create a recognition strategy that focuses on both ensuring recognition practices are happening well and that your recognition programs are being used properly.

This way you can have recognition and reward programs in place even if they are under the same web portal.

People need to feel more positively towards recognition than they have done and that takes a few habitual steps.

Decoupling Rewards From Recognition

Too often we interchange the use of the words rewards and recognition as if they were identical twins, but they’re not.

You don’t have to give a reward when you give someone recognition. But you must always give recognition when you give someone a reward.

The solution is decoupling recognition from rewards and using each of them the right way for which they were intended.

Discover the impact gained from using recognition and rewards separately and then generate greater possibilities when you combine them together.

By understanding the principles and unique attributes of recognition and rewards you will be prepared and ready to use them wisely.

A Strategic Solution

Nearly 100 percent of organizations have a total rewards strategy outlining compensation, benefits, performance management, and career development, etc.

However, only 55 percent of organizations reportedly have a written recognition strategy.¹

It’s obvious what you have to do first. Create a recognition strategy.

Your recognition strategy defines your recognition purpose and philosophy of what you believe about recognition; it includes a plan to maximize your strengths and improve your weak areas; a commitment to what recognition practices you’re willing to exemplify; and then consideration for which programs – informal and formal – to help fill in the gaps where practices of great recognition can’t happen without technology.

Your recognition strategy should be aligned with your organization’s business strategy. Think about how recognition can drive the positive behaviours and effort needed to support your strategic directives.

Discuss and determine how recognition contributes to reinforcing your values and organizational culture.

Make sure to include defining the differences between recognition and rewards and how you will use each of these powerful motivational tools separately and together.

Set concrete and measureable goals for recognition practices and recognition and reward programs, and monitor all closely and regularly.

Reality of Budgetary Constraints

Recognition and reward programs cost money to administer. There is always the reality of financial budgets and a fixed dollar amount for you to work with.

Knowing what your purpose is for recognition you can plan what you want to achieve with it.

 Come up with key priorities for how you feel recognition can help you achieve your company objectives.

You have to determine where you want to invest your monies – recognition practices or recognition programs, or both. Consider whether your industry sector warrants using rewards and incentives and how you should use both recognition and rewards.

As a guideline, I always recommend starting off with everyday recognition and moving up the recognition continuum ladder towards formal awards, and then finally to rewards.

Weaning People Off Of Too Many Rewards

When there’s dependence on rewards you see entitlement attitudes displayed and too many comments about rewards ensue. Or you hear of manipulative or tit for tat behaviors to gain rewards from each another. That’s when you know you’ve got a problem and something has to change.

Consider recent news reports about bank call centers overselling products and services in order to get more incentives.

Call out the reward issue. Call a spade a spade. Provide employees with evidence of what has happened because of poorly thought out reward strategies.

For example, some banks have simply removed incentives for call centers because of the fiasco created by unethical practices.

Draft a written strategy on recognition and implement far greater emphasis on recognition practices and recognition programs without any rewards attached.

Communicate these messages out to all employees. Share what you are going to do to be better at recognizing and valuing people’s contributions.

Redefine your total reward strategy and ensure potentially stricter, or better criteria, and clearer business rules associated with incentives and rewards if you feel they are needed.

Increasing the Recognition Focus

Put a greater emphasis on recognition than rewards.

Get your senior leaders support and direction and have them communicate where the company is going with recognition and rewards.

If you are using both, make sure your role and title uses “recognition and rewards” in it like Manager of Recognition and Rewards. Have any online or offline programs use “recognition and rewards” in their name or on the about page and FAQs.

It is a subtle factor but a powerful message.

Share your recognition strategy.

Have a communication plan set up to explain and inform employees on recognition and rewards. Educate and train managers and employees on the differences between recognition and rewards. Give specific education from onboarding to leadership sessions on the power of appreciation and recognition.

Hold town hall meetings and provide managers with talking points for staff meetings on the direction the company is taking, and always explaining why.

Have recognition programs generate reports showing who is recognizing who for what behavior, value or business focus area. Have these reports and measures become tools for accountability for managers giving recognition and a feedback tool for those needing performance management

Remember, what you measure is what people will focus on.

Making any behavioral change in the workplace always takes time.

However, recognition is always worth the effort.

Question: In what ways have you seen rewards negatively impact people and performance where you work

Reference:

WorldatWork, 2017 Trends in Employee Recognition, See: https://www.worldatwork.org/adimLink?id=81487, p. 16

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.