Maximizing Motivation: Why Well-Intentioned Incentive Programs Don’t Work and How to Improve Them

Author: 
Rick Garlick and Bob Nelson

Several years ago, a company came up with a creative way to recognize its top performing employees. Through a nomination process, a select group of high achievers would be given a couple of days off from their normal jobs, flown to a nice venue, and asked to participate in a series of “think tank” exercises with senior management on how the company could operate more effectively. In the evenings, they’d be treated to nice dinners and other activities to give senior leaders a chance to personally interact and thank these top performers.

While on the surface, this incentive strategy had some validity, the results were not what the company predicted, or wanted. High-performing employees were frantically making calls, begging not to be nominated for this award.  Some may have even tanked their performance just to be taken out of contention. The reasons were several. First, this trip sounded like work, not fun, and just because they were gone for a few days did not mean their real work wouldn’t pile up and be waiting for them upon their return. Second, many of these performers were married and the idea of travel, even incentive travel, meant their families would be on their own for a few days. Last, and certainly the reason most painful to senior leaders, was that the employees had no desire to have social interaction with their company’s officers. They felt they had nothing really to talk about, got nervous, and were afraid they might get too loose during the social interactions and get themselves into trouble with their bosses.

Unfortunately, the previous scenario is not uncommon in companies today. Everyone recognizes the importance of rewarding and recognizing high performers for their work. Employers rightly believe that simply providing a paycheck is not enough to keep people striving to do their best.

Yet, even among companies that generally have positive work cultures, satisfaction with recognition is almost always among the lowest-rated items on the annual employee opinion survey. It almost seems like no matter how hard companies try to recognize employees, and regardless of the financial investment in employee recognition awards, these recognition programs achieve their intended effect. This usually leads to a couple of different scenarios. Either employees become indifferent toward employee recognition, or companies, seeing that these investments aren’t paying off, simply do away with their programs over time. A third scenario is that employers constantly seek to make their programs more meaningful, which is usually a quixotic quest.

To make recognition programs more meaningful, you first must step back and understand why these programs aren’t working. The reasons are usually straightforward.

  1. The people in charge of creating recognition programs design programs that would be meaningful to them.  In the previous example, the company’s leaders assumed their high performers would be as engaged in the company’s operational effectiveness as were they. They also presumed everyone would like to get away for a few days, and of course, who wouldn’t want to spend quality personal time with their company’s leaders?
  2. There is a prevailing belief that all people like to be recognized the same way. Closely related to the previous point is that everyone likes the same things. For example, of course people like programs where you can accumulate points that can later be redeemed for merchandise or other types of tangible rewards. While many people do find the accumulation of reward points to be an appealing incentive, there are some who accumulate thousands of points, never to redeem them. Not everyone likes to be put on a stage and publicly recognized. Others prefer to simply be thanked by a co-worker than receive a note from the boss. A common way of recognizing good workers is for the boss to take the employee to lunch, when the employee would find lunch with their family to be much more rewarding.
  3. There is often an almost exclusive focus on tangible rewards.  If you ask most employees how they would like to be recognized for good work, you will most frequently hear, “pay me more money.” While there are few workers who wouldn’t want to be paid more, simply giving people more money becomes part of compensation and no longer holds any trophy value for the recipient. In fact, cash bonuses almost become an expectation. When you don’t make your bonus, it feels like a pay cut rather than a performance reward if you do. Points, often become equated with dollars, and therefore, also start to feel like currency rather than something that has intrinsic meaning for the recipient. There are many employees who find a simple thank-you or a note from a supervisor or co-worker to be meaningful. Beyond that, giving people the opportunity to have flexible work hours, or work from home, is for many, one of the best ways to recognize that you trust your people. Similarly, giving people the opportunity to attend a conference or learn something new can be a nice way to recognize high performers. Some companies would be surprised to learn there is a portion of their workforce for whom the most satisfying recognition would be to give them more responsibility on the job. Still others might welcome the opportunity to have a forum to hear their ideas heard in an accepting way. There are many ways to recognize high performers that don’t involve giving them something tangible.
  4. Programs lack creativity. After a while, recognition programs can get boring. The same people get recognized every year, the award is the same, etc. To address the monotony, think about new ways to recognize high performers. Perhaps it’s flying in a long-lost family member. It could be providing them a chance to eat in a restaurant they’ve always wanted to try; or perhaps attend a taping of their favorite television show. The possibilities are limitless.

Improving the Quality of Employee Recognition

There are some simple and related steps to reigniting the impact of employee recognition programs.

  1. Recognize everyone is an individual. Put simply, one size does not fit all.  Our preferences are all unique to us. The very thing one person likes might be a complete turn off to another. It is critical to begin with an assumption that not everything is going to have an equal impact.
  2. Take the time to learn what’s meaningful to each person. This may be as simple as a manager sitting down with his or her employees and asking them what form of recognition would be most appreciated. Give people the freedom to be honest. It may hurt to hear they’d rather be recognized by peers than managers, or that some of the things you’ve been doing miss the mark entirely, but if an effective program is the goal, this is a necessary step.
  3. Mix tangible and intangible rewards. People may tell you they’d most appreciate a day off from work or a chance to move up the ladder to another group. Give people the chance to earn what’s most meaningful, not just get some tangible reward, which may be nice but not have much inherent value.
  4. Have both annual and ongoing recognition. Sometimes, its assumed that your paycheck is your reward and recognition. If you aren’t hearing any complaints, assume you are doing a good job. Giving an annual award to top performers may be part of a company’s traditions.  However, remember everyone needs an occasional pat on the back. Catch people doing things right and recognize them in meaningful ways. You always want to make sure recognition is meaningful and special, and not something toward which employees grow indifferent.
  5. Be creative.  There are literally over 1,000 ways to recognize employees. Try news of keeping your recognition program fresh.

A Satisfying Conclusion

Let’s return to the company who started with the misdirected recognition program. After feedback filtered back that employees found the company’s top-performer program completely off-putting, the firm humbly took a step back. It took inventory and tested the appeal of a wide range of both tangible and intangible rewards. The first significant finding was that no single recognition approach appealed to more than 40 percent of its workforce.

The second discovery was that certain non-tangible rewards were more motivating than an incentive trip, award points, or even cash. For example, people loved to be recognized with a couple extra days off.

Third, through conducting its internal research, it found that they weren’t going to please 100 percent of their employees with recognition efforts. With the money they had to spend, they constructed a recognition program combining reward points, days off, lunches with the employees’ families, and flexible work hours that appealed to about three-fourths of their employees. While this revamped program still may not have had universal appeal, each manager sat down with his or her employees to gather feedback about the recognition they’d most like to receive for good work. They were able to put something together that had much broader appeal than the original idea which turned out to be a total demotivator, even for the people receiving the award.

Magid Associates, along with Nelson Motivation has combined the science and art of optimizing reward and recognition programs to maximize motivation and effectiveness.  Using segmentation principles and solid employee research, we can put together simulators to show how effectively companies are spending their money and linking back effective employee recognition to outcome indicators of high performance.  It is our collective mission to make sure employees and employers find their companies motivation programs to inspire high performance, not send their employees into a state where they are begging not to be recognized, which has to be most employers’ nightmare. It’s time to turn the tables on poorly rated recognition strategies once and for all.

Rick Garlick is vice president and strategy consultant at Magid, a consumer-centered business strategy company. Bob Nelson is president of Nelson Motivation Inc., and the author of “1501 Ways to Reward Employees.”

Nelson is presenting a free webinar for Sales & Marketing Management entitled, “Creative Ways to Recognize Your Employees at Year’s End,” on Wednesday, Dec. 12 at 11 a.m. Pacific time. Learn more and register to attend here.

Nelson and Garlick will present a free webinar, "Why Recognition and Incentive Programs Don't Work and How To Fix Them" on Jan. 22, 2019. More information and registration for that webinar is available here.