Decoupling Reward and RecognitionInsights

Decoupling Reward and Recognition

4 min read, by Merlin Mason

A lot of initial conversations we have with customers are around how they can boost recognition in their organisation. We learn a lot from our customers and they’re always making us reconsider what we know and how to approach the complexities of employee engagement. We wanted to share this simple but effective tip that’s helped our customers deliver great results. Just so we’re all on the same page, let’s clarify our terminology…

What is reward?

Reward in this context is giving an unexpected gift to an employee. It’s unrelated to contractually bound bonus schemes and it’s also not employee benefits available to all employees.

What is recognition?

Recognition is the act of noticing and drawing attention to the desirable behaviour of an individual or a group of employees. The result is the recipients feeling like their efforts are noticed and valued. The end goal here is encouraging the desired behaviours through positive feedback.

Sounds great, right?

Yeah, this is great! There’s countless studies showing how reward and recognition drive desired behaviour. But… For a lot of companies these two things are intrinsically tied together, reward is the action, recognition is the outcome. This isn’t necessarily bad, but we do believe it’s limiting. Allow us to elaborate.

Who can give recognition

By tying recognition to reward, it forces us to think of it in terms of company hierarchy, for example a team leader can rewarding a team member. This is a huge restriction on recognition! Not only are there less team leads than team members, but more often than not, team leaders have less visibility of the daily nuances of life in that team. The behaviours of any given team member affects everyone in that team, not just the leader. By allowing recognition to be given on a peer to peer basis, we can shift the focus from keeping the boss happy, to making the team productive.

"By tying recognition to reward, it forces us to think of it in terms of company hierarchy"

According to the SHRM/Globoforce Employee Recognition Survey, 2012 report, Another surprising benefit of peer recognition that it’s is 35.7% more likely to have a positive impact on financial results than manager-only recognition.

Frequency of recognition

By tying recognition to reward, it forces us to budget it and make it finite. Even with the most generous of reward budgets this still becomes limiting. This becomes even more problematic if rewards themselves are only issued in a time based way, for example the classic employee of the month. If we allow reward to be decoupled from recognition, we can give recognition infinitely.

Monetary value can give the wrong message

If the only way to give recognition is through reward, managers are limited to the reward options provided to them. This can be problematic when an employee really goes above and beyond expectations… If the only option for a manager is to issue a £5 voucher this could feel somewhat underwhelming. For a lot of people, a heartfelt message and visibility of their contribution is more important than a small amount of money.

Hang on a minute!

The astute among you may be asking the following question “if reward is no longer tied to behaviour, how does it drive the right outcomes?”. Good question! At Mo we believe we’ve come up with a solution that’s the best of both worlds… We allow all employees to recognise their peers, subordinates and superiors without any limitations or restrictions. These recognition messages can be sent directly, shared with the recipients manager or with the whole organisation. This in turns gives managers a much wider visibility, and they can choose to issue rewards from any of the messages.

Results of this approach

We’ve seen customers massively increase the amount of recognition in their organisation. This leads to employees not only feeling more recognised but also feeling empowered to recognise their colleagues. In addition to this, due to increased manager visibility employees feel like reward is more democratic and managers feel like rewarding the rights things becomes an easier task.

"Peer recognition that is 35.7% more likely to have a positive impact on financial results"

We’ve also helped customers develop the non-monetary side of their reward programs with things likehaving your birthday off work,extra long lunch break,free lunchorcompany discounts or treats. This helps deliver a wide ranging set of rewards while keeping budgets under control.