Causation Found: Engaged Employees Generate More Financial Success (not the other way around)

Engaged employees create financial success. Gallup has found causation.

“We find that the path from the individual engagement elements to financial performance is stronger than the path from financial performance to engagement.”

What does that mean?
Focus on the people first, not the numbers. If you have more engaged employees, they will generate greater financial success.

If you choose to focus on the numbers first, believing (wrongly) that employees will become engaged because they work for a financially successfully company, then you will actually realize less financial success.

Why should you care?
Gallup puts it well:

“If employee perceptions are the main cause of financial performance rather than the reverse, we know that managers can take action to improve employee perceptions and therefore have an impact on the bottom line.”

How do you do it?
So what steps can managers take? As Globoforce CEO, Eric Mosley, and I say in our new book Winning with a Culture of Recognition:

"The connection between engagement and higher performance is obvious, and while there are many ways to inspire engagement (and even more to kill it) all involve communicating and rewarding desired behaviors based on defined values.

"Done right, recognition communicates the right behaviors, rewards and reinforces those behaviors, and gives a sense that the organization values employee contributions. Done right, recognition is management’s positive way of creating engagement.

"Engaged employees are important contributors to the company’s culture and continually reinforce values that support the company mission as well as the bottom line. At its most powerful, recognition continuously propagates and reinforces desired behaviors throughout the company."

If you want a detailed guide on how to use strategic recognition to increase employee engagement, Winning with a Culture of Recognition is available this Monday, October 4 (or pre-order now on Amazon). Learn how other companies applied strategic recognition and the results they achieved.

It’s time to finally kick the “bottom-line first, people second” approach to the curb once and for all.

How to Find and Retain Your Hidden Performers

What’s your strategy for retaining key staff during “disruptive periods” (M&A, overseas transfer of a division, recession, etc.)?

A recent report from the McKinsey Quarterly notes:

“Too many companies approach the retention of key employees during disruptive periods of organizational change by throwing financial incentives at senior executives, star performers, or other “rainmakers.” The money is rarely well spent. In our experience, many of the recipients would have stayed put anyway; others have concerns that money alone can’t address. Moreover, by focusing exclusively on high fliers, companies often overlook those “normal” performers who are nonetheless critical for the success of any change effort.”

As McKinsey says, it’s very often not about the money. Even among the ranks of the highly paid and famous, it’s still not about the money. The flap over American football star, Randy Moss, of the New England Patriots is a terrific example. (Read my post about Mr. Moss on Compensation Café where I discuss how very much like the average employee Mr. Moss was in the statements he made.)

If it’s not about the money, what is it about? You’ll need to actually get to know your employees to find out what individually motivates them, but all the research points to one underlying factor – employees know you care enough to hear them; take their wants, needs and desires into consideration; and appreciate their efforts and value to the company by honoring those specific needs whenever possible.

But how do you find those hidden performers in the first place? And what do I mean, exactly, by “hidden performers?” I like how McKinsey describes in the same article:

“…more average performers whose skills or social networks may be critical—both in keeping the lights on during the change effort itself as well as in delivering against its longer-term business objectives. … Even if the employees’ performance and career potential are unexceptional, their institutional knowledge, direct relationships, or technical expertise can make their retention critical … (usually 30 to 45 percent of all employees).”

If we all think about that hard enough, I’m sure each of us would come up with 2-5 people we know that fit that description. But on the scale of a large multi-national corporation, we’re talking 60,000 – 100,000 “hidden gems.” How do you uncover them?

The easiest way is with strategic recognition in which you allow all employees, regardless of level of position in the organization, to give and receive appreciation from their colleagues. In a well-designed program, each recognition would include a detailed message on why that person is being recognized in a way that can be easily recorded and tracked. Surfacing your hidden gems becomes much easier when you have the proof right in front of you of all the people, across your organization, who value their ability to get things done.


Be sure to check out our new book "Winning with a Culture of Recognition," available on Amazon for pre-order now!

Why CEOs MUST Lead Strategic Recognition Efforts

Have you ever worked for a bad boss? If you have, how’s your heart doing?

A recent report in the McKinsey Quarterly showed:

“For more than 75 percent of employees, dealing with their immediate boss is the most stressful part of the job. … Those with bad bosses suffered 20 to 40 percent more heart attacks than those with good bosses.”

The good news is, the report goes on to say, the bosses at the top matter the most because their subordinates monitor and replicate how they behave:

“The ripple effects of this CEO’s style are consistent with findings from peer-reviewed studies showing that senior executives’ actions can reverberate throughout organizations, ultimately undermining or bolstering their cultures and performance levels.”

This is a concept we discuss in detail in our new book Winning with a Culture of Recognition – that the CEO support of and direct involvement with a strategic recognition program is critical for adoption and success.

What do the best bosses do? They remove obstacles for employees (returning to the McKinsey report):

“The best bosses also boost performance by watching their people’s backs: making it safe for them to learn, act, and take intelligent risks; shielding them from unnecessary distractions and external idiocy of every stripe; and doing hundreds more little things that help them achieve one small win after another—and feel pride and dignity along the way.”

“Feel pride and dignity” – what a powerful phrase. That goes for projects that fail as well as those that succeed. Because unless you’re willing to fail on occasion, you’re not willing to try. And if you’re not willing to try, you’ll never succeed.

So, how do good bosses ensure employees “feel pride and dignity?”

“The late Robert Townsend, CEO of Avis and author of the masterpiece Up the Organization, called the phrase ‘thank you’ a ‘really neglected form of compensation.’ … Conveying this attitude is especially crucial when the stench of failure fills the air—precisely the time when people most need support from the boss and one another. Bosses with the will and the skill to provide that kind of support set the stage for learning from fiascos. Unfortunately, too many bosses have the opposite response and use such occasions to conduct ‘blamestorms’ or ‘circular fire squads,’ where the goal is to point fingers, humiliate the guilty, and throw a few overboard.”

What’s your management style? Express appreciation whether the project succeeds or fails? Or initiate “blamestorms?” Beware: your subordinates are watching and emulating everything you do.


Be sure to check out our new book "Winning with a Culture of Recognition," available on Amazon for pre-order now!

Employee Engagement Continues to Fall as Business Practices Remain Unchanged

Are you concerned about your levels of employee engagement and how your employees are responding are we approach year two of pay cuts, no pay raises, increased workloads, and little appreciation?

If not, you should be. Hewitt recently released startling figures from their Global Engagement Database that show employee engagement is continuing to decline, even as the economy recovers. In fact:

“For the first time in a decade, the percentage of organisations with decreasing Engagement now exceeds the percentage with increasing engagement."

Can you blame employees? They are working harder, longer and for less. Telling them “your pay is your thanks” just isn’t cutting it any more. Employees understand why their companies needed to cut-back, but that doesn’t change their need to be told, “Thanks. You did a great job. They way you handled the project really demonstrated our commitment to quality and integrity. Well done.”

And the fallout from not giving that appreciation is real. Talent Management magazine recently reported on our own “Restarting Recognition during the Recovery” research, highlighting:

“One survey respondent said that when a monetary recognition program was removed, employee satisfaction went from 72 percent to 32 percent. The majority of companies (71 percent) that held steadfast in their employee recognition programs and increased spending saw an uptick in employee engagement, whereas 59 percent of companies that decreased spending saw a dip in employee engagement. …

“In a recent Deloitte survey asking employees about factors that would cause them to stay at or leave their current organization, 25 percent of employees cited nonfinancial recognition from supervisors or managers as a reason to stay, while 20 percent cited the lack of this recognition as a reason to leave.

“However, organizations also realize that money talks. So it’s no surprise that organizations that increased their investment during the downturn realize that the recovery is no time to let up on these efforts. A majority (53 percent) of these companies plan to increase their investment in recognition.”

What are you doing to show your employees the appreciation they deserve?

Stop Creating Second-Class Corporate Citizens

On Monday this week, I wrote about Symantec’s incredible success with peer-to-peer recognition programs that span departments and teams. But the only reason Symantec is able to allow employees from any department to recognize each other is because they launched their employee recognition program globally – to all employees – on the same day. They didn’t do a “staged roll-out” to the employees in the US first, as so many solutions usually are – which leaves employees outside the US feeling like second-class citizens.

But the benefits of going global don’t stop at peer-to-peer recognition capabilities. The cost savings and program governance abilities are greatly enhanced, too, as Bill McCullough, senior compensation analyst at Symantec explained in this recent Workforce Management article:

Companies with operations scattered around the world believe centralized reward plans reach more people and their value can be assessed more easily. Multinationals also reap financial benefits from a global approach.

“Our employees love it,” says Bill McCullough, senior compensation analyst. “Now, approximately 65 percent of employees are touched by the program, and it has impacted our employee satisfaction scores.”

Now, with its centralized program, Symantec says it can track the return on investment in employee recognition, as well as use job performance metrics to ensure that outstanding workers receive the appropriate kudos.

As discussed in more depth in our upcoming book, Winning with a Culture of Recognition, these results strongly reflect Symantec’s ambition for their recognition program, including: “One global strategic recognition solution” and “Local impact and relevance for all employees globally.”

What’s your employee recognition strategy say about your company and what you really think of your employees?

Get Your How-To Guide for Managing Company Culture

What’s your company culture? Are you aware of how powerful your company culture is?

This is the main theme of our new book, Winning with a Culture of Recognition, which I co-authored with Globoforce President & CEO Eric Mosley. Here’s just a taste of our approach to company culture:

“Organizational culture is the most powerful force in business, and yet it is one of the most neglected (and misunderstood) attributes of any organization. Every organization has a culture, whether it is the culture the leadership wants or the one that has come to exist through inertia and management neglect. Businesses are societies, and society and culture are inseparable.

“Understanding your company’s culture and shaping it deliberately, based on your values, is critical to achieving your strategic objectives. It is critical to gaining competitive advantage. … Applied correctly, culture management through recognition is one of the most powerful, effective and, most critically, positive ways to drive the success of your organization as measured by improvements in operating margins, income, and customer satisfaction.

“This book serves as a guide for business leaders to harness the power of that culture to achieve the company mission. Think of the hallmarks of your culture—your company values. These statements of desired behaviors and actions suggest and—when followed properly—reinforce your culture.”

And this is even more vital to understand as we work to recover from the recession. As I said in a recent article in EmployeeBenefit News:

“Employees are experiencing fear and uncertainty. For many, the economic crisis has been a shock to their systems. For this reason, companies need to move away from a transactional contract with employees - that is, simply relying on salary and bonuses to communicate a job well done - to creating a psychological contract to rebuild confidence and trust. … Employers can accomplish this with employee recognition programs, which entail year-long feedback and encouragement, and foster a general positive atmosphere.

"A great recognition program is one that's built to reinforce what the company wants to achieve in the marketplace, to reinforce their values and reinforce their strategy. … A great recognition program becomes a continuous reinforcer of a positive, forward-thinking culture of the company; the employees themselves reinforce that culture."

Pre-order your copy of Winning with a Culture of Recognition today to learn more about how you can proactively manage your company culture to rebuild that psychological contract with your employees.

Without Peer-to-Peer Recognition, You’re Just Swimming Upstream

Do you have some kind of an employee recognition program in your workplace? What level do you offer? The bare minimum of years of service or performance-based annual review recognition? Middle-of-the-road manager-to-employee only schemes? Or do you go top-of-the line with peer-to-peer recognition in which employees are actively encouraged to notice and appreciate the behaviors and actions of their colleagues that contribute to team and company success.

If you consider employee recognition to be a key factor for increasing employee engagement, performance and productivity but are not enabling peer-to-peer recognition, then you are missing out on at least 50% of the tangible benefits you could realize from recognition.This is something we talk about in our soon-to-be-released book, Winning with a Culture of Recognition, in which we make the point: “Peer-to-peer interactions through the recognition program sup¬port the values promoted by recognition. Exceptional employees are recognized by the group, and the group looks to them for informal guidance.”

This article in Human Resource Executive highlights this well:

“Peer-to-peer recognition programs are among an employer's most powerful, low-cost tools for reducing turnover, improving productivity and boosting employee morale. Unlike gifts through traditional recognition-and-rewards programs, peer acknowledgements are often unexpected, selfless and inspirational. Employees are usually so touched that they end up forming strong bonds with co-workers and become more motivated to do a better job.”

What’s this mean in the real world? The article goes on to explain the success our customer, Symantec, has had with peer-to-peer recognition. Jennifer Reimert, senior director of global compensation, explains:

“‘It takes a lot of people to get a product launched from development to marketing to sales. There's such an acknowledgement when somebody outside your department recognizes you. When they know you value and acknowledge what they're doing, they'll work harder for you.’… ‘It's another vehicle that immediately rewards behavior,’ says Reimert, adding that employee engagement jumped 14 percent after the program's first year. ‘It's definitely enhanced the employee experience.’”

So what’s your approach? Do you let employees formally recognize each other (which adds the benefit of employees knowing their peer appreciation will also be seen by the boss)? Or do you think managers alone have the right to say “thanks”?

Oxymoron Challenge * “Bonus Guarantee”

Oxymorons are fun. There are the obvious ones – jumbo shrimp, airplane food, military intelligence. And then there are the ones you stumble across. Like “bonus guarantee.”

After the fallout from the recession and the reaction to ridiculous bonuses, not to mention the “soul crushing” structure such programs can take, I see hopeful signs that reliance on cash bonuses as the primary means of recognition reward is diminishing. One such sign was reported by WorldatWork based on data from Mercer:

“Almost all participants [30 financial services organizations from Europe and North America] noted that they have changed the weighting of components in their pay packages. 70% have increased base salaries while decreasing annual cash bonuses (94%). …

“94% of respondents have made or plan to make changes to their annual short-term incentive (STI) plan, commonly known as "the bonus." One-year bonus guarantees are used less than in 2009, with 57% of organizations having limited or eliminated multi-year bonus guarantees.”

I’m glad to see that base salaries are rising. That is necessary to counter what the CIPD reported on two years ago:

“Bonuses have become a recruitment and retention tool rather than a reward for good performance. There are so many corporate governance issues around permanent salaries that the only ‘wriggle room’ has been bonuses. That’s why in recent times there have been sums that have been seen as excessive, and the phenomenon of people asking for guaranteed bonuses – degrading the principle of paying for performance.”

It’s the comment in the second paragraph of the Mercer results I quote above that really gets to me, though – “bonus guarantees.” I’m also glad to see these continuing to fall, counteracting (I hope) what Bloomberg also reported on:

“More Wall Street employees received bonuses for 2008 than were expecting to, though many remained unhappy with them. … What this shows is the bonus culture is very deep set in the securities industry. There’s an entitlement culture amongst a number of people in the industry, which I think in the current industry is very misplaced.”

That’s why I argue so passionately against cash-based bonuses. They quickly become an expectation and an entitlement. Pay employees a fair wage. Recognize them with “After/That” appreciation and rewards, which are a surprise for work well done in alignment with your values and never an expectation. But stop playing around with the oxymoron of “bonus guarantees.”

“The Way We’ve Always Done It”

Last month, Laura Schroeder wrote a great post on Compensation Café on tailored rewards and the realization that one size doesn’t fit all. As Laura points out: “Various research shows that people are motivated by different things at different times, depending on a variety of personal and demographic factors.”

Pop over and read Laura’s full post. She offers five solid tips for moving towards tailored rewards. It’s her last statement of the post that got me laughing, however:

“I also don’t recommend tie pins.”

I laugh because I’ve heard that more than a few times from companies we consult with: “But we’ve ALWAYS given tie/lapel pins. It’s a critical part of our program!” As I’ve written about before, ask just about any employee who ever received one, and they’ll fumble to remember which junk drawer the pin ended up in.

But the important lesson here is that any discussion of total rewards is irrelevant if you don't also discuss the meaningfulness of those rewards. "The way we've always done it" may mean something to the 30-year employee in Marketing, but absolutely nothing to the 1-year GenY rockstar in R&D. And vice versa. BOTH perspectives are equally important, and even that is vastly simplifying -- it's not easy to juggle the "perceived motivators" of a 10 person small business, much less in a 30,000 employee multi-national corporation.

And that's why the discussion must come down to (and thanks to Dan Pink and others is beginning to) true motivators of autonomy, mastery and purpose. Every employee is motivated by managers who remove obstacles from their paths at work, who listen to them, and help them achieve what is meaningful for them in the workplace.

One final thought. When I made similar comments to Laura’s original post, she asked, “What if these three simple criteria were added to or even replaced the manager evaluation form at every company?”

What if, indeed.

Winning with a Culture of Recognition * Order Your Copy Today!

I am quite excited to announce the coming availability of Winning with a Culture of Recognition: Recognition Strategies at the World’s Most Admired Companies, a new book co-authored by Eric Mosley, Globoforce’s CEO, and me.

In Winning with a Culture of Recognition, Eric and I look at why only 25% of employees choose to truly engage in their work – because most managers fail to recognize high performance and connect it with company culture. For the first time, employee appreciation emerges as a sound management method that moves recognition from anecdotal morale-booster to data-driven business discipline.

In today’s economic environment, compensation is only part of the employment contract. Employees need to know their efforts are valuable and that they are contributing to achieving the company’s changing strategic objectives. And they want to know their company actually lives the values displayed on the plaque on the wall. Seeing these values come alive in their own work and the work of their colleagues, then being able to recognize and appreciate peers for demonstrating these values, is critical for increased performance and productivity.

Strategic recognition programs are the key for employers who need to create a culture of appreciation, recognition, and reward, giving executives the tools to create and manage a culture of appreciation for competitive advantage.

In Part I of Winning with a Culture of Recognition, we dissect the powerful link between recognition and culture, how you can use recognition to manipulate your company culture, and the difference between strategic recognition efforts and the more common tactical recognition and incentive efforts many companies still use today.

In Part II, we give you the practical steps to build a strategic recognition practice and ensure program success.

Check out a review of our book in SHRM's HR Magazine (subscription required).

Winning with a Culture of Recognition is available for pre-order today. Stay tuned during the next several weeks for a few key excerpts from the book.

I look forward to hearing your feedback!

Removing Obstacles, Progress & Recognition

Two questions for you today:
1) When you’re down, when you’re at the end of your energy, what keeps you going?
2) More importantly, who keeps you going? Do they know that?

Today’s post is commentary on the posts of two bloggers I greatly respect, Wally Bock from Three Star Leadership and Kris Dunn, the HR Capitalist.

In Learning from Master Banks, Wally tells the simple story of his baby grandson learning to turn over.

“He tries and tries and tries. He gets half-way over and falls back. He grins and tries again. He only stops when he runs out of energy. …

“We didn't wait for Banks to make the perfect roll before we praised him. We applauded his effort. We encouraged him. We cheered the slightest improvement.

“Maybe, just maybe, if we treated our people more like we treat Banks, they'll act with energy and purpose, more like he does.”

Who encourages you as you try again and again? Who do you encourage to keep on trying themselves? Are you recognizing progress and not just results?

In I Cried Like a Little Baby This Weekend…Here’s Why…, Kris speaks to a story of recognition from the world of sports.

“Then Emmitt Smith proceeded to do something I least expected. He made me cry with his eloquence and grace. Not to mention his understanding of the world of recognition.

“Then, he saves what he clearly considers to be the most important "thank you" for a teammate he didn't have to thank - former fullback Daryl Johnston, who is so important in the big scheme of things that he's sitting out in general admission seats with guys sporting mullets and hats enabling easier beer drinking.

“Emmitt's clearly moved by having the opportunity to thank Johnston - so much so that he's crying like a baby. …

“Recognition 101 - thank the people who cleared the obstacles in front of you in some type of public way. Do it often and make sure it's genuine.”

While I don’t claim to be any kind of an expert on American football, I understand exactly the point Kris is making. Who has cleared the obstacles for you, perhaps by fighting the big fights up the chain of command or perhaps by taking care of the more mundane tasks to free you for the more high profile projects? Are you recognizing those who cleared the obstacles for you?

Aligning Company & Personal Values for Greatest Success

What are your personal values? What rules do you try to live your life by? As the thoughts swirl in your head, try to distill them down to 5-7. Mine are honesty, kindness, selflessness, caring, and integrity. These all interplay with others. For example, I do believe honesty is the best policy, but if my sister asks me if her dress makes her look fat, I may temper my answer with kindness and caring: “No, but I’ve seen you wear more flattering dresses.”

Just as my personal values naturally surface in my interactions and decisions outside of work, they influence my decisions at work as well. The same is true, I am sure, for those I work with, and likely for you as well. The research supports this as well. In findings Bret Simmons recently blogged about:

“One of the things this new research suggests enhances engagement is value congruence. Value congruence is the extent to which the individual can behave at work consistent with their own self-image. It’s very difficult to experience meaningfulness in our work if we are expected to behave in ways that are inconsistent with the highest values we espouse to ourselves and others.

“‘When individuals find that their role expectations pull for behaviors that they feel are inappropriate for their preferred self-images, they feel devalued, taken advantage of, and less willing to give themselves to their work roles. (Rich, et al., 2010, p. 621).’

“This is where leadership integrity comes in. Leaders with integrity in the eyes of their employees speak and act in ways consistent with what employees value. The leader’s personal behavior reflects values congruent with employee values.”

Value congruence. This is an even stronger reason for making your company values come alive for and in your workforce. If you’re promoting company values in any way, but then not acknowledging those values in the work (or ignoring violation of those values), then you’re setting yourself up to lose integrity in the eyes of your employees. And if your employees don’t trust you, don’t believe in what you as their boss are doing and working toward, then they will not work as hard or with as much purpose.

What are you doing to ensure your company values (and how they are recognized) are in alignment with employee personal values?

How to Get Engagement * You Can’t

That’s right. You can’t “get” engagement from employees. They can’t “give” you engagement, either. That’s because “engagement” isn’t a thing to be had. It’s a state of being that you can only foster. Or, as Dov Seidman recently put it in a terrific post in Bloomberg Businessweek:

“The majority of engagement-improvement initiatives continue to treat employee engagement as an end goal. Employee engagement is a condition – manifested by the inspiration an employee unleashes in his or her work when he or she is deeply connected to a mission, purpose, and the values that connect us. …

“We cannot "motivate" engagement (or innovation, growth, or succession for that matter); instead, we must inspire the kind of outcomes we want by rooting ourselves in a set of values, being in the grip of an idea worthy of dedication and commitment, connecting around a meaningful and shared purpose, and aligning around a common, deep, and sustainable set of human, societal, and environmental values.”

I couldn’t agree more. The challenge for HR pros and company leaders is building the construct in which engagement is possible – establishing meaningful values, launching an inspiring idea, creating a shared purpose. And that’s certainly not easy in the workplace. But it is possible.

How do I know? Because I’ve seen several great companies achieve just that. But it’s not something you can impose from above. You can outline the values, but if you (meaning all employees, at every level) aren’t willing to live those values, praise those values when demonstrated by others, and call people out for violating those values with real consequences, then your values are meaningless.

If the idea (mission, goal, strategic objective) is engaging for you alone, and not something that everyone in the organization is excited to contribute to – because they know their work IS contributing to that idea – then you’ve failed at launching a mission everyone can get behind.

If you want to “increase your engagement scores,” I can’t help you. But if you want to help your employees engage with you in your mission, your strategic objectives, your company values, then you need to create culture in which employees want to engage. And that I can help you with – by creating a culture of appreciation.

GenY: So “Different” They’re the Same

I’m overwhelmed by the generalities about Generation Y in the HR-related press and blogs. They’re entitled. They expect to start at the top. They need a gold star every two minutes to know they’re doing good work.

What do I see in GenY? A group of young employees who want the same things from work and behave in very much the way I did when I was their age. And if you’re honest with yourself, you’ll likely admit the same. Sure they want to be at the top. That’s where the action is. They know they have to work hard to get there, though. But if you’re not giving them the “gold stars” – meaningful feedback on their work and praise when they do it well – how will they know they’re doing the right thing? But their drive does create one big challenge for business today – creating opportunities for them to grow into greater responsibility and contribution quickly, and remaining true to the company values at the same time.

That’s right – company values are very important to GenY. In fact, recent BlessingWhite research showed the top 5 characteristics recent grads want from their employers (quoting):

1. Company values, mission and culture
2. Recreation (gym facilities, non-work related outings, etc.)
3. Non-financial benefits (medical/dental/vision, paid time off, etc.)
4. Social interaction/work-life blending
5. Financial benefits and salary

Before all else, company values, mission and culture are what’s important to GenY. They want to make a difference, and they want to work in a company that they think is making a difference, too.

But notice where compensation falls – dead last. So what are you doing to make “living the values” something every employee instinctively does? How do you take your values off the wall and bring them to life? How do you show employees that the values are being lived and breathed in daily work? The best way is with behavior-based employee recognition the specifically acknowledges and appreciates employees who demonstrate those values in their work – and does so frequently and in the moment. And, critically, shares these successes in a way that others can chime in with their agreement as well.

Rank and File * Not a Motivational Tool

A practical question for you: “What should employers do to make their employees work harder when financial incentives [aren’t effective] anymore?”

What do you think? Let’s take a best case scenario – all of your employees are paid properly, fairly and well for their level of work, experience, contribution and cost of living needs. You’ve seen the negative fall-out from financial incentives (cash bonuses) and are looking for other methods of motivation. What are the options you would legitimately consider? Behavior-based employee recognition? Efforts to change the company culture to create a workplace employees want to engage in? Something as simple as a team lunch?

Would you consider implementing stacked ranking – as a method of motivation, I mean? A management professor at Wharton considered this, “… looking at rank as its own reward. I wanted to find out whether workers truly want to know how they rank against their peers and … if they knew how they ranked, did it cause them to adjust their effort?”

Paul Hebert over at i2i raised some interesting issues with the research and how it was constructed, not least of which the pool of workers used (recruited from Mechanical Turk, meaning they work individually on self-selected projects with no known relation to each other).

As for me, I just don’t see how the professors findings could be put to practical use.

“A good employer knows its employees very well and should have a good idea how they will respond to the prospect of being ranked. The key is to devote more time to thinking about whether to give feedback, and how each individual will respond to it. If, as the employer, you think a worker will respond positively to a ranking and feel inspired to work harder, then by all means do it. But it’s imperative to think about it on an individual level.”

On the surface, that sounds good. I couldn’t agree more that employers/managers should know their teams well and should give them feedback in the way they prefer. But… How do you implement a ranking system in which some employees participate and some don’t? It’s like being only a little pregnant.

Every employee should be ranked against him or herself. Full stop. Did they grow, learn and improve? And yes, you must give them feedback, positive and negative. Research shows the worst thing you can do is give no feedback at all.

GloboBlog Moves!

Welcome to our new blog home!

We are moving our blog this week to have our blog on strategic employee recognition co-located with our company website. While the focus of the blog will not change – I’ll keep bringing you the latest news and research in the employee recognition, incentives, and performance and talent management industry – this relocation also brings you a much better search capability to find the topics and research you care about most.

If you’re not already, be sure to subscribe today! Links for email and RSS subscription options are available in the left column. You can also follow us on Twitter and Facebook or through our group on LinkedIn.

As always, I look forward to continuing the conversation with you as we work to improve the employee recognition experience!

You can also follow me at Compensation Café, a strong group of HR pros from around the world writing on all things, compensation and recognition.

If you missed it, be sure to catch up on my latest post: Combat Fear with Appreciation * 9 Signs You Work in an Appreciative Workplace.