How many times have your team, colleagues, spouse, or kids complained to you that, they are not receiving enough appreciation? Have you ever received complains about receiving too much appreciation or recognition?

The Importance Of Rewards And Recognition Program

In fact, The Gallup Organization has surveyed more than 4 million employees worldwide on this topic. Gallup's latest analysis, which includes more than 10,000 business units and more than 30 industries, has found that individuals who receive regular recognition and praise:

• Increase their individual productivity
• Increase engagement among their colleagues
• Are more likely to stay with their organization
• Receive higher loyalty and satisfaction scores from customers
• Have better safety records and fewer accidents on the job

Per-person productivity = Talent multiplied by (Relationship + Right Expectation + Recognition/Reward)

According to the U.S. Department of Labor, the number-one reason people leave their jobs is that they "do not feel appreciated".

But every Manager's dilemma is "How much recognition"? Managers worry about loosing the value of their recognition if given very frequently and they wait for a big success or high impact achievement from employees. But the irony is, for employees to achieve something big they need to feel appreciated for their every step of small success.

The right answer to “how much recognition” is once every seven days and you can never give too much recognition if it is honest and deserved. Gallup’s data reveal that the key to effective recognition is that it is honest and based on outcomes that are measurable.

Once every seven days, all employees should be individually recognized or at least told that they have done a good job or that they have set a record. And you can never give too much recognition if it is honest and deserved.

Three Attributes Of Effective Recognition

1. AUTHENTIC - Recognition that feels genuine, real, and heartfelt
2. MEANINGFUL - Praise that highlights the value of the work and the person doing it
3. MOTIVATING - Recognition that taps into what matters most to the individual

The Danger Of Inequity

Let me ask you a question:

What do you prefer?

Several years ago a Business Week conducted a similar survey of about 2500 professionals in middle management. And what they found is that 59% of the respondents chose the smaller level of reward, as long as it was the largest in their team. 

Now it seems completely irrational. Why would you forego a high level of compensation? But this result gives great insight into human behavior. 

To understand human motivation, it's not sufficient to attend to the absolute level of rewards. We also need to consider the relative level of rewards.

Equity Theory

The concept of equity was first introduced in 1963 by John Stacey Adams. He suggested that we compare the ratio of inputs to rewards for ourselves, to those of our peers. By inputs I mean time, effort we put in our work. Rewards could be monetary rewards such as your pay, or non-monetary rewards such as public recognition. 

In the above picture,

Inputs = effort, time, performance, productivity, etc.

Rewards = Salary, promotion, rewards, recognition, etc.

For me to stay motivated, I like to see the sign "less than, or equal", between these two ratios. This makes me really happy because what happens here is that I put in less time, less effort per unit of reward than my peers, or a comparable amount of time and effort per unit of reward. The situation turns unsatisfactory to me if the sign is greater than. Because in this case, I have to work harder than my peers per unit of rewards. 

Reward-to-effort ratios are relative to peers not absolute.

Some of the consequences of Inequity if you don't take care of Inequity in your employee rewards and recognition program are:

• Negativity
• Dissatisfaction
• Stress
• Attrition
• Coronary heart disease
• Absenteeism

The Danger Of Misalignment Between Reward And Behavior

When an organization realizes the importance of rewards and recognition and decides to take serious action, they might end up committing the big sin of misalignment between rewards and behaviors. The organization can reward behaviors that are different from those that they're expecting. Worse yet, they can sometimes reward behaviors that they're actively trying to discourage. See some examples below.

So, rewards and recognition is important. But the rewards and recognition strategy that you create for your organisation has a big impact on its successful implementation.