Cash v Non-Cash Rewards * Why Does This Debate Keep Dragging On?!

“Just show me the money.” vs. “Nobody notices or appreciates the work I do. Why should I bother?”

Just another way of saying cash vs. non-cash rewards. Let me make this really simple. Cash does not motivate, it does not recognize, it does not appreciate. Cash compensates. Pure and simple.

And that’s not a bad thing. The media spin on recent research from Mercer tries to make it seem that way with headlines that scream: “Forget non-cash compensation: employees say ‘show me the money.’” If you read more deeply into the article you see this: “Leading reward elements perceived to have the strongest impact on employee retention and engagement for 2010 are base salary increases (41%)…”

This isn’t surprising. Quite a few companies need to increase base salary to return employees to level they were earning in 2008, much less give them a raise. That’s the realities of recovering from the actions taken in the recession when salary cuts and wage freezes seemed the norm.

But that doesn’t mean non-cash employee recognition and rewards will fall off in the coming months. As I said in my post on Compensation Café on Wednesday, you must build a solid foundation with appropriate, fair and livable base compensation. But once that’s done, you must then add the polish with recognition programs.

Another recent study from the Boston Consulting Group and the World Federation of People Management Associations showed that executives believe these areas are especially weak at their companies:
• Structured career management that rewards appropriate behaviors
• Recognition beyond compensation

The executives are right, buy why should they (or you) care? Another “SmartPulse” survey conducted by SmartBrief on Leadership released just two weeks ago asked: “What’s the most satisfying reward you can receive for a job well done?”

Cash seemed to win out at 30%. But when you add together 30% for “Praise and expressions of thanks from my team and customers,” 28% for “A handwritten thank you note from an executive/leader I respect,” and another 8% for “Public accolades and awards at a company awards ceremony,” that 66% craving appreciation in some form is more than double those who vote for just cash.

If you think just a couple percentage point raise is going to convey to your employees any level of appreciation, respect and desire to keep them (and their talent) loyal to your firm, think again.

What Goes Around * Stop Incenting Bad Behavior

As a blogger, you meet many interesting people and make several acquaintances through the blogosphere that you might not otherwise. One such relationship for me is with Doug Shaw, founder of What Goes Around Limited. Note the link when you visit his site – Stop doing dumb things to customers. That’s Doug’s attitude. We all know what we SHOULD be doing… so just step up and do it already! I like that attitude. It reminds me of a word I learned from an American colleague recently – it shows some “moxie.”

In a post last week, Doug went on a tear after hearing about a plan to restore short term financial incentives (bonuses) after all the mess they caused in this recession. Doug says it better than I can:

“OK, so having seen first-hand the value destroying, anti-collaborative behaviour that short term financial incentives drive, we’re gonna do it all over again. With a twist. We’ll let these sweet bonus carrots dangle a little further away. That way folks will have to focus even harder on the carrot, and from there I put it to you a stronger focus on the value destroying behaviour necessary to bag the carrot will emerge. Not happy? Furious more like!

“The case to ban financial incentives was one I first became really active on back in December 2008. We ran a workshop with some bright enthusiastic minds in and around BT. The purpose of coming together was to uncover the most effective ideas needed to improve customer service. Banning financial incentives was an idea agreed on by all in attendance. There were other exciting ideas around clearer dialogue and communication but it was the “don’t incentivise me, just pay me” discussion that flared. Since then I’ve looked in all kinds of corners (University of Miami, Harvard, the studies of Dan Pink to name a few), and discussed with all kinds of folk. And I find lots of useful practical examples of why these bonuses don’t work. I’ve pulled this journey together into a white paper (not a white riot) which you are welcome to take, read, argue with, whatever you like. As well as examples, it cites behavioural references which you may find useful.

“So how the hell am I gonna calm down now? Well I kept on reading and looking and I found two further interesting conversations. The first, called “You’re Getting a Bonus so Why Aren’t You Motivated?” was started on the Harvard Business Review by Eric Mosley, CEO and co-founder of Globoforce.”

Doug’s white paper is an excellent collection of examples on how poorly structured incentive programs simply drive bad behavior. I suggest giving it a read along with Eric’s Harvard Business Review article. Then come back and tell me: Are cash incentives worthwhile?

Top Tens of Employee Engagement * Actionable Advice from Industry Leaders

David Zinger just published his latest e-book collection: The Top Tens of Employee Engagement. A collection of advice on engagement from members of the Employee Engagement Network, The Top Tens is a solid handbook of ideas for engagement along a broad spectrum of needs.

While I’m thrilled to have been included with my “10 Steps to Realizing Strategic Engagement,” I was particularly impressed with how well the advice from so many contributors aligned with each other.

For example, Jennifer Schulte of Mars offered “Strategies to Impact Engagement across an Organization.” Her recommendations to Start at the Top, Focus on a Bold Goal, and Celebrate and Replicate Those Who Can Engage are an excellent compliment to my advice to Secure Executive Sponsorship, Define Clear Goals for Your Corporate Culture, and Frequently Recognize Contributors in a Timely Way.

Considering the importance of employee recognition – telling employees specifically how their efforts contributed to company success and how greatly they are valued in the organization – to creating a workplace environment in which employees want to engage, I was also quite pleased to see the number of people who mentioned recognition in one way or another. In no particular order (and not an exhaustive list):

Wally Bock: “Praise effort and highlight superior performance”

Sanna Wolsteholme: “Praise. Catch people doing things right.”

Terrence Seamon: “Appreciate the people that you have. … Give kudos to your people as often as you can. … Say thank you.”

Kelly Eskridge: “Give thanks. … When you thank people for something, there’s a much better chance they’ll do it again.”

David Marklew: “Show some appreciation, do it often, let it flow freely.”

And the final word from David Zinger himself, his seventh tip on engagement:

“Employees are responsible for their own engagement, we are all accountable for everyone’s engagement. No one has a bigger role in engagement than the individual themselves – if engagement is to be, it is up to me. We are accountable for other people’s engagement and we can influence their engagement – if engagement is to be, it is up to we.”

With that in mind, what are you doing to influence the engagement of those around you? Are you saying thanks? Are you actively looking for ways you can express appreciation to your colleagues? It’s certainly a solid start on the road to engagement.

Successful Recognition * What Not to Do

I am often asked and I lead frequent workshops on how to create successful strategic employee recognition programs. Programs that deliver the bottom-line results the CEO expects, the appreciation and acknowledgment the employees deserve, and the simplicity of use managers need. Our formula is proven and successful at any number of Fortune 500 multinational companies. While I don’t have any plans to change it, I’m always on the lookout for how to make it better.

I recently found excellent advice in, of all places, an article on gender diversity and inclusion in the workplace. The author offers this list of the best ways to derail gender inclusion:

1. Decide not to do an assessment, build a plan, set goals, or establish benchmarks.
2. Task a small group of committed, passionate people with designing and implementing a change initiative—and expect them to succeed without a clear mandate, significant resources, intelligent guidance, or visible support from above.
3. Start implementation without the support of key people.
4. Refuse to assign supervisors specific responsibilities; fail to reward those who follow through.
5. Keep quiet about the initiative, allowing it to be perceived as low-priority or to be ignored altogether.
6. Let negative talk or obstructive behaviors pass without comment or notice.
7. Assume that efforts that are well received in one part of the organization (a mentorship program, employee resource group, or set of educational workshops) will translate seamlessly to other parts of the organization.
8. Do the same things again and again, although they haven’t resulted in the hoped-for outcomes.

If you want to derail a successful strategic employee recognition program, that’s the list you want to follow, too. If you’re putting out an RFP for recognition, but you decide to stick with catalog merchandise because that’s what you’ve always done, you won’t see any change; you won’t achieve your hoped for outcomes.

So what should you do? What’s the best way launch a strategic recognition program? Or restart efforts you may have slowed or stopped during the recession? We recently published the results of research on how companies changed their employee recognition approach in response to the recession and how they are now adapting their recognition programs during the economic recovery. The paper also offers seven recommendations to properly calibrate your program for the recovery. To find out the details, download “Restarting Recognition: Tap into the Power of Recognition during the Recovery.”