Making the Most of Your Employee Recognition Investment

Terry Weaver, CEO of Chief Executive Boards International and author of the Chief Executive Boards blog recently wrote about his surprise at How Much Employee Motivation You Can Buy for $10.

“I had an extended conversation about employee recognition with two Gen-X'ers and learned something that totally amazed me. Both of these people have MBA's from prestigious schools and work in large NYSE companies at great salaries. Both have traveled and lived internationally.

“And both were talking about their respective companies' practice of handing out small-denomination gift cards to employees as part of their "spot" recognition programs. In these cases, "small" is REALLY small -- $5, $10 and $15 dollar gift cards -- amounts that could get lost in the roundoff error of their respective W-2's.

“I apologized in advance, and asked "Would someone who came in on a Saturday to get an important project done by Monday actually be happy with a $10 bonus?" "You mean they're not offended by such a trivial amount?"

“Well, I learned, there's something wildly different about a $10 gift card and a $10 bill. I still don't know exactly what. Perhaps it's the "indulgence" element. The hottest gift cards going are Starbucks and I-Tunes, plus, believe it or not, Target. Somehow spending $5 apiece for two coffees feels great if it's the shareholders who are buying. One of these people had received a $50 gift card for something a bit more meaningful, and used it at Target to buy Christmas decorations -- something she might have been too frugal to spend "real" money on.”

What Terry discovered is particularly important for CEOs everywhere to understand – tremendous value can be gained from a relatively small investment in strategic recognition. One simple way to make your investment in your employees go farther today, especially in this recessionary economy, is to give employees frequent, appropriate and timely recognition for performance, personal achievement and team successes.

Our clients have saved millions by eliminating or dramatically reducing cash rewards in favor of gift cards, which is a far more effective reward. This is because cash-based recognition programs do not maintain program consistency on a global scale and do not ensure local participants feel motivated and involved in the organization. Additionally, people become habituated to cash no matter how much you give them, viewing it as an entitlement – a problem now making headlines worldwide with bonuses paid out to Wall Street executives who have taken US government rescue funds.

The small amount of rewards Terry highlights is also critical as it allows for more frequent recognition. Frequent recognition of small amounts does far more good in boosting morale, and reinforcing desired actions than a yearly bonus. Taking this a step further, if each recognition is specifically tied to a company value demonstrated or strategic objective achieved (or contributed to), company leaders can begin to track which values and objectives are less understood by every employee and how those values and objectives apply to his or her specific job. Executives can use the recognition program as lagging indicators to target these areas of low recognition for additional training or reinforcement.

Globoforce’s strategic recognition programs save money by reducing manual intervention and eliminating the paper chase while also creating a positive work environment where employees see that best practices, strong ethics and exceptional performance are recognized and rewarded consistently, openly and fairly – an environment that encourages loyalty, commitment and honesty of effort.

What are your recognition methods? How has the recession impacted those efforts? What’s been the ultimate impact on your employees of your program modifications? Tell me about it in comments.