2 Reasons Why a Pay Check Isn’t Recognition

In all the news and research feeds I follow, occasionally the author of an article or post will phrase his comments in a way that leaves me thinking, “I wish I’d written that myself.”

One such statement comes from Jay Forte in the Human Capitalist blog:

“You don’t pay your employees to do a job. You pay them to think about and deliver the best, most efficient and most profitable response in each moment. The better aligned they are to jobs that fit their abilities — roles that let them do what they do best — the better their decisions and the greater their performance. Job fit, or the right talent for the right job, drives success. Talent makes or breaks an organization.”

Jay drives home why a favored phrase of lazy managers – “I don’t need to recognize employees. That’s what I pay them for.” – is so wrong.

1) Assessing Job Fit

This belief of lazy managers ignores the importance of job fit. The question remains – How do you make sure you have the right talent in the right job? How do you know for sure employees are truly delivering their best? Sure, the obvious answer is the performance review, but I think we’d all agree the way in which the annual review is usually implemented is flawed at best. Besides, you need employees “deliver[ing] the best, most efficient and most profitable response in each moment” – this moment, right now.

That’s what makes social recognition the most powerful tool in the HR toolkit to assess job fit in real time. In an environment where all employees are empowered and encouraged to recognize others for exceptional work in the moment, managers and HR leadership have exponentially more data points to better infer which employees are in roles where they are having a differentiating impact on their colleagues, the team, the customers or the company. At the very least, HR has more information on a more regular basis to start to ask important questions.

2) Valuing Employees through More than a Paycheck

Critically, if all you’re doing is paying employees to do a job (and relying on standard merit increases as a primary reward mechanism or doing so), you’re not really valuing your employees at all. Looking at recent data, 2% and 3% are the most common budgeted pay rises for 2014 in the UK. In November, SHRM projected US salary increase budgets for 2014 would remain at 3%, too. Yet, the rate of inflation in the UK is hovering between 1.6% and 2%. The rate of inflation in the US is holding steady around 2% as well. Merit increases today barely keep up with the cost of living.

If we do, indeed, believe that “talent makes or breaks an organization” (and I certainly do), then talent needs to be recognized and rewarded for the great work they do beyond their pay check alone. Great work deserves great acknowledgment – from everyone and available to everyone.

What do you pay your employees to do?

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.

Comments

[Tony Bergmann-Porter]

Permit me to suggest that job fit is in itself a powerful reward. I can't think of anything more motivating or engaging than being paid to do what (and only what) I would do for free if I weren't required to make a living.

[E. James (Jim) Brennan]

Even when the performance review process is well founded, constant and continual, with perhaps one end-year overall summary appraisal being the mutually understood conclusion, that still might not constitute "recognition." The specific psychic reinforcement conferred by that special element of the total reward package called "recognition" is not a single score nor a periodic check, but it frequently has more value than either.

[Shawn Miller]

I'm reading this just after Jacque's interview with Rosemary from Adobe regarding the way that organization has done away with traditional performance reviews.

Pay is important - it allows us to meet the needs at the bottom of the 'needs' pyramid. But “I don’t need to recognize employees. That’s what I pay them for.” is so very short-sighted.

We need to move up the hierarchy of needs: Ongoing feedback (and lack thereof) has been a recognized motivational tool -- both positive and negative. Acknowledging and discussing the current state -- either good or not-so-good -- helps us learn and where necessary, improve our actions/decision-making.

We all yearn for acknowledgement and to make a positive difference. We want to be part of a group, to achieve, to 'matter.'

Tony suggests that job fit can be a powerful reward in itself. So true! When individuals find the right place, doing their personal 'right thing' with the right people, it turns into magic.