Our esteemed Compensation Café editor, Ann Bares, published a very good post last week on discretionary rewards. The article focused primarily on the unintended consequences of leaving these discretionary reward budgets solely in the hands of the manager – to which I say, “Hear, hear!”
Ann used a couple of illustrations to highlight the challenges of such programs, which boil down to:
- The length of time between action deserving of recognition and reward and the actual receipt of that reward (because such programs most often take the form of annual bonuses).
- The memory of a single person (the manager) over time to appropriately reward someone.
- The unintended reinforcement of the manager and his or her concerns as the primary focus of employees.
Ann wisely titled her post “Discretion and Disempowerment.” If our goal instead is to empower all employees to delight each other, the customer and the manager, then it is necessary to also empower all employees to recognize and reward each other for demonstrating behaviors and achieving goals aligned with the company’s core values and strategic objectives.
How does empowering all employees impact the challenges referenced by Ann and enumerated above?
1. In-the-moment recognition reinforces much more strongly the actions, behaviors and results you need to see to achieve success metrics. Many employees try their best every day at their jobs. Sometimes, we are exceptional. Think of the lost opportunities if “Joe” did something exceptionally well in January but was not recognized for it until the annual bonus is distributed in December. Joe may not realize just how exceptional that effort was or that delivering that kind of effort more regularly is desired. If he’d been recognized in the moment, he would know beyond a doubt how much that exceptional effort is appreciated by others and the impact it had on success. Now he’s far more motivated and likely to repeat those behaviors and efforts again and again.
2. Even the best manager cannot see everything good happening every day or remember all those instances of excellence over many months. That’s why empowering all employees to recognize and reward each other is so powerful. Now you not only have exponentially more “eyes” looking to “catch someone doing something good,” but you are also reinforcing what “good” looks like for those doing the recognizing as well as receiving the recognition itself. In her post, Ann used the example of a basketball game in which there is no scoreboard and no one is permitted to tell players the score during the game. Only the coach knows. That scenario is just as ridiculous as attending a basketball game where all players are silent. I’ve certainly never seen a sporting event in which the players themselves weren’t encouraging each other constantly.
3. When all employees are empowered to recognize each other for certain actions, behaviors and results in line with core values and key objectives, then the priorities of the organization become first and foremost. Demonstrating those values and contributing to those objectives become the guiding principles for employees. Now, the needs of the customer, the colleague and the company have as much priority as the needs of the manager in terms of how employees are recognized and rewarded.
Who controls the distribution of discretionary recognition and rewards in your organization? Just managers/leaders or all employees?
As Globoforce’s Head of Strategic Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. His articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin, Montreal and Boston. Follow Derek on Twitter at @DerekIrvine.