How You Recognize Employees Influences Performance

“Recognition is a simple acknowledgement, verbally or through some deed for a job well done that shows genuine appreciation for a specific behavior,” states Bob Romano, President of Romano & Sanfilippo (Escondido, CA). “The most basic human need is to feel valued and appreciated. When you can do this for employees both morale and productivity can be improved, all other things being equal such as the right job fit, paying market wage, etc.”

When conducting Sales and Service Culture Climate Surveys, Romano & Sanfilippo consistently find that the top two greatest reasons for dissatisfaction are: 1) lack of communication; and 2) lack of recognition and appreciation. The latter is usually number one. “Employees consistently say that no one appreciates what I do. They’re looking for that verbal feedback or some sort of acknowledge-ment,” says Barbara Sanfilippo, Execu-tive Vice President.

Money Doesn’t Always Motivate

Cash incentives and recognition are not the same things. A cash incentive is given in a check. The check is merely a reminder that you performed in a certain manner. “Unless someone actually ac-knowledges the employee in a way that shows genuine appreciation for the be-havior that prompted the cash incentive, it’s not recognition. It’s just a check,” Romano says. “People like money but they still need to feel appreciated. It’s like parents who don’t spend time with their children and think they can buy their love with lavish gifts. The kids know better and employees do, too.”

Cash incentives won’t compensate for a lousy recognition program. For exam-ple, Romano & Sanfilippo was contacted by an organization faced with poor re-sults from its incentives program. Prior to contacting the firm, the bank had imple-mented a program that paid employees cash on a monthly basis for mortgage loan referrals. For about four to six months the numbers went up. Initially the bank made a big deal out of the incen-tives. They issued special checks for the incentives and publicized recipients’ names in the employee newsletter. Then management decided to just include the incentive pay with the regular paychecks.

“The incentive pay became a regular part of the employees’ income. All the hoopla stopped like mentioning it in front of other employees,” Sanfilippo contin-ues. “Referral numbers went way down, even though the bank was paying extra cash. The recognition stopped and the payments became routine – not special.”

Create a Memorable Experience

A study conducted by the Society of Incentives and Travel Executives re-vealed that tangible incentives dramati-cally increased work performance by an average of 22%. “The keyword is tangi-ble,” emphasizes Sanfilippo. “Large companies know they can’t just recognize people by throwing cash their way. Many are using more tangible rewards that give employees an experience.”
While cash is short lived and often lumped in with other earnings to pay bills, giving employees a “memorable experience” can be highly motivating. “A memorable experience is something you typically do not treated yourself to,” San-filippo explains. “It’s something that touches you emotionally. You can recall it with pleasant memories long after the experience.” Examples are dinner at an elegant restaurant or a night at a Bed & Breakfast for two.

“If you give me the money, I might feel guilty using it for an incredible ex-perience,” Sanfilippo says. “When you give me an awesome experience, I feel good about the company. It allows me to do something in my life I wouldn’t nor-mally do.” Because people are so in-volved and busy, personal services are big right now. Giving an employee a memorable experience, for example, may be a service such as house cleaning, car-pet cleaning, or detailing the car.

Formal Recognition

To sustain an effective formal recog-nition program, Romano and Sanfilippo recommends:

* Establish objective criteria. Formal recognition is usually tied to achieving performance that will enable the company to realize its corporate goals. The company establishes criteria for getting the recognition. Employees know what they need to do in order to be recognized.

* Create symbols of achievement. These can include plaques and framed certificates and other items that are unique to your firm’s culture. When em-ployees see them, they immediately rec-ognize that the person receiving the symbol is a high achiever.

* Eliminate the chance factor. Avoid nominations and sweepstakes. Employees need to know that if they meet specific criteria, they get the recog-nition and don’t have to rely on some-body nominating them. It also means everyone meeting the criteria will get the recognition. “Sometimes management puts everyone’s name in a drawing who meets the criteria. That’s the sweepstakes mentality. The employee feels My recog-nition is left to chance. That can work for little prizes but not major rewards,” says Romano.

* Link recognition programs to major plans. Recognition programs should generally meet this test: If we do this recognition, will it impact the strate-gic initiative? Let’s say you want to in-crease sales. This is a measurable process that affects your company goals.

* Recognize exceeding expecta-tions. Don’t use recognition programs to reward people for what should be normal performance. Make sure you establish the right criteria for job expectations. For example, a sales rep is making $75,000 a year. You should expect that person to bring in $xxx annually in business. Rec-ognition should be reserved for going above that expectation.

* Make the recognition well worth the effort you’re asking employ-ees to put forth. “If you set goals prop-erly, your organization will make a handsome return on its investment in an
achievement club and the dollars spent to create an event to remember,” Romano says. “Conduct a memorable event that represents the highest standard of excel-lence. Make it exclusive for employees who have met the criteria.”

* Be consistent throughout the organization. Get the entire involved in a formal recognition program, such as a President’s Club.

* Recognize employees at regu-larly scheduled times such as monthly quarterly. This way, employees know whoever meets the criteria will be as-sured of getting recognized throughout the year. Always try to present recogni-tion in front of peers.

* Give individual and team awards. Create a balanced program that recognizes both individuals and teams. “If you overdo the individual awards, you can destroy the team cohesiveness. But if you only have team awards and no indi-vidual recognition, people who are the stars feel like you’re not recognizing them,” explains Sanfilippo. A client San-filippo worked with gave team awards based on the following criteria: sales goals, customer service scores, product knowledge testing scores, and meeting budget. The entire team got to spend two nights at a local resort.

* Recognize support departments. If you’re getting great service from areas like accounting or IT, have a way of thanking those people. “Make sure sup-port areas get rewarded for giving great service. That helps encourage a cohesive spirit of we all work together for the cus-tomer’s benefit,” says Sanfilippo.

* Have credible ways to measure if people met the criteria. Even though the criteria may be totally objective, if employees don’t have trust in your sales tracking software, your recognition pro-gram will suffer from a credibility gap.

Informal Recognition

Unlike formal recognition, informal doesn’t have specific criteria. You catch people doing things right and provide immediate, on-the-spot recognition. “Employees don’t expect informal recog-nition. It’s spontaneous and provides immediate results for a job done well,” says Romano.
Don’t give lavish gifts when you rec-ognize people informally. The idea is to demonstrate that people are appreciated. Give tokens of appreciation such as a coupon for yogurt, handwritten thank you note, or a piece of chocolate wrapped beautifully. Surveys consistently show that what people value most is genuine praise and thank you’s. Romano & San-filippo have a “kudos board” in their
office. It’s a white board that says “ku-dos”. Anytime someone feels that anyone deserves recognition, they write the per-son’s name on the board and highlight why.

Terrific opportunities for giving in-formal recognition include:

* going above and beyond the call of duty on a project, for a customer/member, or co-worker

* effectively handling complaints by an unhappy customer/member

* improved or continued excellent work performance

* identifying and/or implementing ideas that improve productivity, efficiency or revenue for a depart-ment or the entire organization