The Carrot or the Stick: How to Reward and Recognise Your Performers

There aren’t too many people who don’t enjoy being rewarded for a job well done. In today’s business world, Reward and Recognition (R&R) come in all shapes and sizes and is increasingly a tool used to not simply reward top talent but to attract new talent into organisations.

Most HR professionals will agree that values-based recognition programs help make their employees more engaged and happier. Why is this so? Why do employees need these programs to feel fulfilled and engaged? It all comes down to basic psychology – as humans we need to feel as though we belong, and we desire the approval of our colleagues and Managers. The statistics back this psychology up – 79% of employees who leave an organisation cite ‘lack of appreciation’ as a reason and 69% of employees admit that they’d work harder if they felt better appreciated. Modern office culture can be extremely competitive which drives the top talent pool into challenging one another for the top spot. If they achieve their goal, however diverse this may be: launching a product well, increasing customer satisfaction or saving the company money, even if they don’t voice it, they expect some kind of recognition.

It’s important to recognise the difference between reward and recognition. Rewards are usually transactional – tangible assets such as bonuses or all expenses paid achiever trips for example. Organisations frequently use the age-old method of dangling a metaphorical carrot on a stick for rewards – ‘If we achieve this customer satisfaction score, you’ll get this bonus,’ contrasted to recognition, which is a different form of reward. Recognition is much more of an experience, a warm, fuzzy feeling which evokes positive memories and makes the recipient feel good. It could arrive in the simplest, unexpected form of your Executive letting you know you did a great job (even better if it’s said in front of the team!) or a card on an employees desk to say thank you. This type of recognition serves to boost morale, to motivate that employee and helps to increase loyalty to both the giver and the company. To keep talented employees motivated, the key is to finding the balance between reward and recognition. The reality is that most employees, however talented and motivated, work for money and tangible reward, which means that forward-thinking organisations need to have a robust R&R formal policy in place to address this.

There are countless ways in which organisations can structure an R&R program, but a good one always combines the same ingredients. Firstly, it is all-encompassing and becomes a part of the culture. There’s little point in creating an innovative program which nobody uses, or which leadership teams aren’t confident to interpret. Secondly, and importantly it needs to be kept simple to assist employees to understand what they need to achieve, in order to gain reward. Thirdly, it needs to be inclusive. Many a reward program has fallen apart when its very structure and contents are too challenging to make it an innate part of a culture. You want your leadership teams and your employees to buy into an R&R program, to advocate appreciation for top performance and use it as a foundation for robust staff engagement. Most importantly, is integrating the human recognition side to the program, to help build team culture and reflect the values of the company, and which can also be used for instantaneous, impactful recognition by Managers and peers.

Investing in a robust R&R program, or refreshing your existing one, is critical in our complex, post COVID environment. Organisations which shine spotlights on their employees through reward and recognition are the companies who will win the race in retaining existing talent and attracting top performers from those who fail to act.