Big bonuses and skewed incentives paid to a tiny minority of elite money managers created huge pain and suffering for millions around the world in the past few years. Finally we’re seeing one of the main players, Goldman Sachs, being charged by the U.S. Security and Exchange Commission for their part in the fraud, deception, and massive Ponzi scheme that contributed to our global economic meltdown. Hopefully, this is the start of a trend and we’ll see more of these criminals prosecuted.
This is a highly visible example of common problems with reward and recognition programs and practices in many organizations. Too often a few elite or top performers are given big rewards while the majority of people feel like “human capital” (assets with skin) and get little appreciation for their key contributions to team or organizational success. This dangerously distorts the organization’s culture and defines leadership as a position or who we are rather than action or what we do. It also disengages most people.
Fortune magazine just published an article reporting on a Boston-based company, Globoforce, and a study showing that “the standard way of recognizing good performance – bonuses, new titles, high-priced quarterly giveaways to only the very top people – doesn’t motivate employees very effectively.” Entitled “Motivate Without Spending Millions”, the article reports that Globoforce found what really works “are the things you might dismiss as the stuff of kindergarten: small awards, all the time, to almost everyone.”
Promotions, bonuses, incentives, recognition programs, celebrations, and daily performance feedback – or lack of it – most clearly reflect a manager’s values. These often flow from organizational culture (“the way we do things around here.”)
Jim Rohn, personal development author and speaker, once pointed out “A rose on time is far more valuable than a thousand dollar gift that’s too late.” Here are a few keys to effective reward and recognition:
• Don’t allow recognition to focus only on the big successes or breakthroughs. Find lots of opportunities to celebrate and recognize the many small wins along the way.
• Make sure rewards and recognition are predictable and based on a solid outside-in feedback process. Individuals and teams should be assessed by the internal or external customers they are serving.
• Give everyone lots of information and feedback and make it as visual and visible as possible. You want to run a very transparent organization where it’s clear who is making the greatest contributions to continuous service/quality improvement.
• Involve those to be rewarded and recognized in deciding who should be rewarded and recognized for what activities and results and how this should be done.
• Ensure that senior managers are highly visible in the recognition process. They should be handing out the awards, giving the thank you speeches, and shaking lots of hands.
• Find alternatives to upward career ladders that reward high performers with promotions. This traditional process too often takes an outstanding individual contributor and makes them into a second-rate manager. In today’s organizations there are fewer opportunities for upward mobility. The higher income and prestige found in promotions needs to be built into horizontal opportunities for continuous job expansion and contributions to the team.
• Make recognition as immediate as possible. Otherwise the excitement or connection to why it was significant will be lost.
• Provide plenty of training, follow-up, encouragement, and personal examples for supervisors, managers, and executives to give personal one-on-one recognition and thanks.
CLICK HERE to peruse a series of short articles on Reward, Recognition, and Celebration.