Saying well done is not as easy as it looks for managers

Employee recognition programmes and non-cash reward or incentive schemes are part of the total rewards strategy for most modern organizations. They are designed to increase overall staff engagement and improve business sales and processes. It seems obvious that improving staff loyalty and incentivizing better performance at the same time are good things. But is this perception based on any sound, psychological data?

Incentive theories

Experimental psychology…predicting human behaviour by measuring what people do/how they feel…has a relatively short history of just over 100 years. Freud and Jung were the first to look at how the pursuit of pleasure and the avoidance of pain ‘motivates’ humans to act in particular ways. Maslow created the first ‘hierarchy of needs’ pyramid which showed how workers can be motivated to higher performance by satisfying lower level needs first…no good offering a trip to New York, if your sales guy cannot afford to pay the rent.

McClelland and Locke/Latham explored predictive models to do with incentives and goals at work culminating in Latham’s key work on goals and work performance in 1990. The Motivation Systems Theory by Ford (1992) outlined the key elements for a good incentive, citing mutual agreement on the task, a doable target, timely communication and regular feedback on performance.

Recognition theories

One of the deepest cravings in human desire is the need to be appreciated. Organizations can use this human trait to promote higher efficiency through better engagement levels. Herzberg first outlined the importance of achievement and recognition at work as the two main factors in promoting better performance in his two-factor theory. Even the famous Hawthorne experiments of Chicago in the 1920s proved that paying continuous attention to and recognising what employees are doing is a key factor in improving performance, often more so than any incentive or hygiene improvement you may offer.

Improving engagement levels by X% can improve the bottom line of large organizations by Y% in a predictive way. Communicating better and simply saying ‘thanks’ to staff can have a dramatic effect on profits.

Dealing with real people

But it is simplistic to think that lab experiments with students or rats are going to deliver automatic results, commercially speaking. Engaging with a contracted workforce is a complex task that requires a mix of sound research, good training, targeted communication and a sensitive use of appropriate incentives for each sub-group.

They will need a slightly different approach in terms of the proportion of techniques to be used. Typically sales people prefer ‘do-this-get-that’ schemes with the emphasis on incentives. Employees prefer peer group acknowledgement of a job well done and status-bolstering events.

The holistic approach

To raise the performance of a large group of employees requires a proper plan as complex as any pan-global event. There may be more than 10 sub-groups to cater for plus language issues. The main point is that everyone should be aligned under the same corporate values and be measured. There may be local tweaks and allowances. But in the final analysis what matters is better overall, organizational performance.

Keynotes

1. Theories are only useful if they can be used in practice. Business is a practical, technical activity with a goal. So don’t waste time trying to make wacky ideas fit where they probably do not belong.
2. Be careful about jargon…participants don’t like to be seen as part of some vast organizational experiment. So use ordinary words and communicate at the appropriate level of understanding. Terms like ‘disruption’ and ‘trophy value’ are easily misinterpreted, both by managers and ordinary participants.
3. ‘No reward without recognition; no recognition without reward’ is a good way to sum up the idea that if you are sponsoring rewards, the sponsor should take the credit. Equally if you are saying well done to staff, make provision for rewards, even if only token as no-one likes to feel they have been short-changed.
4. Many theories seem obvious, such as ‘set a target’, but not everyone does it. Setting targets is more effective in terms of improving performance than not setting a target. So you can be confident it will help you achieve your aims overall if the programme includes individual and team targets.