Indicate Respect with Money * Indicate Value with Recognition

There seems to have been a flux in excellent books on the power of recognition to motivate and engage hitting the market in recent months. Two I recommend are Leading Outside the Lines: How to Mobilize the Informal Organization, Energize Your Team, and Get Better Results by Jon Katzenbach and Zia Khan and The 17 Rules Successful Companies Use to Attract and Keep Top Talent by David Russo.

I was first turned on to Leading Outside the Lines in this Forbes article in which the authors spoke specifically about why money is not a motivator.

“Emotional sources of motivation are more powerful [than money], and they are best conveyed informally in an organization through the respect of peers, the admiration of subordinates, he approval of one’s personal network and community and the like. Money becomes the default motivator because it is measurable, tangible and fungible.”

I think the authors are right. People designing employee reward programs often default to money as the primary reward mechanism because it seems easier – easier to distribute, easier to report on, easier to make sure the employee gets something they want and not another toaster, BBQ set or watch. The solution is to make strategic recognition rewards as measurable, tangible and fungible through a delivery model that makes sense globally. Local gift cards/certificates to merchants around the world is highly fungible but ensures the recognition recipient choose a truly aspirational and rewarding experience or item. Backed with our technology, such a delivery model is highly measurable on use, adoption and perceived value.

One chapter in particular from David Russo’s 17 Rules book was particularly powerful for me – “Cheerlead: The Magic of M&Ms.” In this one chapter, David hits on several important points of strategic recognition: frequent, on-the-spot recognition, authenticity in recognition, again on why cash is not motivational, and the bottom line value of recognition – as proven at SAS (currently No. 1 on Fortune Best Companies to Work For list).

I particularly liked how David dispelled the money as motivational myth. As I’ve said before, of course you must pay people an appropriate, living wage. But once people are paid properly, money as a motivator disappears. David puts it this way:

“The metric of the success was the employees’ response. If the employees wanted to be in the workplace, we were successful in our obligations as leaders. If the work environment was truly positive, we also noted that the workers – when paid good wages and benefits – didn’t focus on wages and benefits as the primary indication of whether they were valued.”

That’s what employees are truly seeking – an indication that they are valued. Respect them and their efforts with a proper wage and appropriate benefits. Then show and tell them how much you value them and their efforts with clear, consistent and frequent recognition of their behaviors and actions that demonstrate your values and help achieve your objectives.

2 comment(s):

At May 26, 2010 6:53 AM, Laura Schroeder said...

I have to agree that cards are wonderful. My company distributed $200 certificates for dinner out at the restaurant of one's choice for outstanding contributors. And if you are able to pick a store you're going to shop at anyway, it's like cash but more personal.

At May 26, 2010 9:30 AM, Derek Irvine said...

Thanks for the comment, Laura. That's the interesting benefit of gift cards -- especially if you give the recipient the ability to choose their own desired outlet (and not just hand them a gift card you already pre-selected. Think how unrewarding the experience would have been to a vegan in your company if everyone had received gift cards to the local Outback Steakhouse). You are telling the recipient -- you have done excellent work and you deserve a personal, meaningful reward. We respect your intelligence and self-knowledge enough to allow you to choose that rewarding experience yourself from just about any option, anywhere in the world.

Unlike cash, however, gift cards do not get lost in a paycheck, do not get used for gas or groceries or rent. Instead, the employee is encouraged to finally enjoy that truly aspirational or luxury reward they couldn't justify out of their cash compensation. That's why, although we offer more than 2,000 rewarding experience gift card options around the world, we limit them to aspirational experiences.