A question I occasionally hear is: “Why should employee recognition be included in a total rewards program? Compensation and benefits are how we reward employees for the work they do.”
A recent interview in The New York Times “Corner Office” column (a favorite of mine) offers an instructive answer from Exelon Corporation CEO John W. Rowe.
1) Recognition and reward reinforce desired messages more frequently and more clearly.
Mr. Rowe makes it clear that giving orders is far less effective across a large number of employees than setting a direction.
“It turns out that you can give orders far more easily if they’re very detailed and precise. But telling people that this direction is really important takes a whole lot of work to get people to follow it and implement it. And so I’ve learned the importance of conveying a clear direction and the need to reinforce it, day in and day out, in what you do, whom you promote, whom you give bonuses to, what’s rewarded.”
Ordering employees to achieve company strategic objectives and goals will never be as effective as explaining to them what those objectives are, how every employee can contribute to achieving them, and recognizing employees every time they do so. There’s no better way of making those often abstract objectives very real in the day-to-day tasks of each employee.
2) Specific recognition based on company values – encouraged and sponsored by the CEO – extends the CEO’s ability to influence thousands of individuals.
It’s just as important to reinforce the company’s values as it is the strategic objectives.
“It’s important to explain to employees that these principles [company vision statement/creed] really do impact how we function in our business. … Because you can’t actually influence 17,000 to 18,000 people on a personal basis, day to day. So that’s one thing I try to do. I can look at people and say, ‘Here’s how each one of these lines affects something we do in our business.’”
If you focus solely on achieving strategic objectives and not on the manner in which those objectives are achieved, you’ll end up with another Enron situation. It’s not enough to just state your values on a plaque on the wall or on a card for employees to carry. You must also make these values real in employee’s daily work.
Therefore, just as in point one above, it’s important to recognize employees every time they demonstrate a company value in contribution to achieving a strategic objective. This ensures employees understand, for example, meeting financial expectations will not be rewarded if doing so cut corners or violated the company value of “protecting the environment.”
3) Regular reinforcement of key values through recognition is more effective than waiting to do so through a promotion.
Promotion of employees who demonstrate your values is certainly a powerful method of recognition and reward as Mr. Rowe describes.
“We really do promote people based on what’s in here [company vision statement/creed]. So trying to convince people that the creed has meaning is part of what I do that affects a lot of people.”
But it cannot be your only – or even primary – method. Promotion occurs too rarely in most organizations to reinforce your values and objectives as frequently as necessary. Rather, recognize and appropriately reward employees regularly – and encourage people at all levels to do so as well – to see the most profound impact on your company culture.
Do you include strategic employee recognition as part of your total rewards package today? What shape does it take in your organization?
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 and Boston. Follow Derek on Twitter at @DerekIrvine.
Essentially, reinforcements for vital priorities should occur more frequently than once a year. Cash and fringe benefits are awkward communications media. Those reward elements are also totally inappropriate for universal highly public celebration, difficult to apply with a specific focus and relatively useless for timely immediate feedback and reinforcement applications.
Posted by: E. James (Jim) Brennan | 07/20/2011 at 02:42 PM
I have one more: Unlike other types of rewards, recognition doesn't six levels of approvals!
Posted by: Laura Schroeder | 07/23/2011 at 06:10 AM
Couldn't agree more, Jim. Thanks for adding the validation.
And Laura - that is critical. One client of ours completely eliminated all approvals - even on recognition associated with rewards with a high value. Why? They didn't want to slow down the positive feedback process.
Posted by: Derek Irvine, Globoforce | 07/25/2011 at 08:10 AM