What’s the Big-Picture View of Employee Incentives?

Dear Gift:

Research and common sense tell you to pay fairly or your best people might leave. If your organization is paying less than your competitors, be concerned. Money alone will not keep people on your team. Research suggests challenge, growth opportunities, flexibility, meaningful work, a good boss and recognition are what keep your staff.

Two rules for rewards:

1. If a staff member expects it, it may not be seen as a reward. Company perks such as annual bonuses, company cars, stock plan and health insurance are commonplace. They may be expected as part of the employment package and seen as rewards.

2. Rewards need to match your staff’s needs and wants. How would your staff like to be recognized? It’s not a “one size fits all” situation. You need to ask staff what rewards and recognition they like and don’t like.

Too many managers wrongly assume that everyone likes or wants the same types of rewards and recognition. We asked dozens of people how they liked to be recognized. The following list represents some of what we heard. Notice the differences.

• An award, preferably given in front of my peers.
• A plaque to hang on my wall.
• A thank-you, in writing, from my boss.
• A note to my boss’ boss about my excellent performance.
• Frequent pats on the back.
• My boss actually implementing one of my ideas.
• A chance to be on a really exciting, cutting-edge project.
• A day off.
• Words of praise in front of my family.
• A chance to go to lunch with senior management.
• An opportunity to work with people from other parts of the company.
• A chance to be on the important steering committee.
• A promotion.
• A change in my title.
• A small memento or gift.
• Some flexibility in my schedule.
• More freedom or autonomy.
• A seminar or training class.

The following comments from managers we’ve interviewed illustrate myriad of examples of recognizing:

The Golden Genie: I got these great wind-up toys from McDonald’s — little genies that walk around. When someone deserves a pat on the back, I put the genie on their desk and let it walk around. Then I grant them any nonmonetary wish they have. I’m amazed; so far there has been nothing I have been unable to grant.

Personalize the Paychecks: I have a small unit reporting to me. I write a personal note every two-week period, and it goes with their paychecks. Every two weeks, it forces me to think about something I noticed and appreciated. I’ve gotten great feedback on that.

A Great Idea: I give out a light bulb filled with candy to anyone who comes up with a great idea and brings it to me. I generate excitement that says “keep those ideas coming.” I give out several a month. People actually try to save the candy because they like leaving the light bulb on their desks.

Be the Best: Once each quarter, I ask my team to submit someone else’s accomplishment that impressed them. I read over all the accomplishments and give a day off to the award winner. It gives me a chance to see accomplishments I never even knew about, and it gives everyone a chance to recognize their teammates.

Wall of Fame: I work in a customer service center, and I maintain our wall of fame. Every time any of my people gets a letter from a customer about their service, it gets framed and put up on the wall. I also give the employee a small gift certificate. I think, though, that their “framed” letter means more than the gift certificate. Visitors love to read the letters. It does great for our internal PR as well.

Out of the Chair: I try to remember that people — good, intelligent, capable people — may actually need day-to-day praise and thanks for the job they do. I try to remember to get up out of my chair, turn off my computer, go sit or stand next to them, and see what they’re doing. I ask about the challenges, find out if they need additional help, and offer that help when possible. Most of all, I tell them in all honesty that what they are doing is important, to me, to the company and to our customers.

Over and over, our research told us that money is not the major key to keeping good people. When employees answered the question, “Why do you stay with your organization?” few listed dollars among their top three reasons. People want recognition for work well done. The more managers find creative ways to show their appreciation, the more they can increase the odds of keeping their talent.

The one universal reward is praise. It works for everyone. In its 2012 report on Rewards & Recognition, Red Balloon looked at 4,000 businesses and found that three-fourths of employees are starved for recognition, receiving it from their managers only monthly, quarterly, or once a year. Some 11 percent received no praise at all. Giving praise that is specific, detailed and relevant can helps you retain top performers.

SOURCE: Beverly Kaye and Sharon Jordan-Evans (adapted with permission from Love ‘Em or Lose ‘Em:  Getting Good People to Stay), Dec. 17, 2014.