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Read time13 mins

The most effective forms of employee recognition

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A group of people celebrating with a trophy to recognise employees.

Using the right kinds of employee recognition and rewards

What kinds of employee recognition are the most effective?

Discover the different forms that recognition can take, from formal programs to day-to-day acknowledgments, and discover why informal recognition packs a powerful punch for employee wellbeing.

Learn how to align recognition strategies with your organisation’s values and goals, and discover the impact of eudaimonic versus hedonic rewards on employee engagement.

And make sure you’re rewarding the right kinds of behaviours to ensure you create a fair and balanced culture of appreciation that fuels success.

The best ways to recognise your employees

Watch the video to understand the different forms that employee recognition can take and which ones are the most effective.

Step 4 - Effective recognition programs require good leadership

Step 2 - The benefits of employee recognition to your organisation

If you know of anyone who would benefit from this video, please share it with them.

Video transcript

Hi, Andrew from SACS and welcome to video number three in our five video series about optimum employee recognition.

This one is all about forms of recognition.

What forms of recognition do the job best in terms of employee wellbeing and productivity?

So we started off with the video about why people need recognition.

We then talked about recognition in terms of achieving the goals, which is all about how the organisation benefits from recognition.

Now we’re going to deal with forms of recognition and the final two videos are about leadership skills for recognition and building a recognition program using facilitative leadership.

Informal and formal recognition

So forms of recognition.

There are a range of different forms of recognition and they fall into two categories.

One is formal and the other is informal.

So formal recognition is the kind of thing where you have an employee of the month club, where you have some kind of process which is awarded by colleagues or the boss or whomever.

And informal is really the day-to-day stuff which we do in running in effect.

So that’s where somebody does a great job and we say to them, “”””Thank you very much, that’s a good job.”””” Now we’ll choose to do that either privately or publicly and depending on the personality of the person that will have a big impact on how effective it is in dealing with their wellbeing.

So introverts in general prefer quieter, less spectacular displays of gratitude whereas extroverts will be quite happy to be recognised more in terms of a group environment.

And I think one of the things that will suggest to you in building a recognition program, that’s why it’s really important to get people involved in the process of building it so you can understand their preferences and create a range of different options that will work for different people within your organisation.

Create a degree of flexibility if you want to put it that way.

So formal recognition is often a structured, company-wide recognition program with clear objectives and it could be plaques and those sorts of things.

And these things work but they don’t work as well as informal recognition.

I think one of the key benefits of informal recognition is that you don’t need a line item in your budget for informal recognition.

It’s really all about a psychosocial benefit.

Recognising people, thanking them, giving them an understanding that they’re appreciated.

That’s really powerful.

Proximal versus distal recognition

Now, you’ll see it at the bottom of this slide (refer to the video) the word proximal versus distal.

And proximal means things that are really close to me, distal means things that are far away from me.

So a golden rule of psychology is that proximal works better than distal.

And so proximal would be recognition from people who are close to me, my colleagues, my immediate leader.

Distal is where you get a recognition program that’s to do with the organisation recognising someone.

Now, that can be a good thing, but one of the things that we know is proximal recognition when it happens a lot, will result in significantly higher levels of wellbeing than let’s say a recognition program where somebody wins an employee of the year award.

You get a surge of wellbeing from that but basically very few other people get benefits from that.

And also it tends not to be so enduring as a day-to-day recognition process where people recognise people for doing a good job, in effect catching them doing something right.

So when you’ve decided on the form of recognition the question is recognition from whom?

Colleagues, their local leader, organisational leadership such as the big boss.

So the more proximal it is the better, the greater impact on engagement.

So why not a combination, say 80% local, 20% organisational.

So that kind of blended model can work very well for organisations where what you have is in effect a situation where you’d have a formal process but then what you have is at the local level an encouragement of, a training of, a development of local leaders to make sure that they’re giving individual local recognition, that psychosocial benefit that I mentioned earlier.

What should you recognise employees for?

And then there’s a question of what we should recognise them for.

Should we recognise them for job performance?

So that’s what I call the “”””what”””” of the job.

So you’d have a definition of that.

You might have measures.

And this really gets into the question always of objectivity.

To what degree can we objectively conclude that somebody is doing a good job?

And if there is that objectivity then that’s going to result in much more confidence in the fact that a certain person is awarded versus somebody else missing out.

And the question then is will other employees recognise this?

Because one of the big drivers of any of these schemes is a sense of justice, a sense of fairness.

If people perceive that it’s fair and just, then they’ll support it and then they will back it.

Recognising how people do their work

And then there’s the style and approach that people bring to their job.

So this is the “”””how”””” of the job, the what is do they achieve and the how is how do they go about delivering this?

So how do you do that?

Well, you can link it to some sort of mission vision, value structure.

You can link it to something else like a group generated behaviour protocol.

Colleagues recognising and congratulating people on interactions can work well.

So just to talk about mission, vision, values.

When people try to apply MVVs to recognition programs they often fail in the reason that many MVV programmes fail anyway, and that is that these things can be extremely vague and non-specific.

In other words, if we’ve got something that says, look, we’re going to act with integrity, which, by the way, is in something like 40 or 50% of companies in Australia, that’s in the mission vision value statement, we act with integrity.

Well, what exactly does that mean?

It’s extremely difficult to be specific about this.

Now, the alternative is a thing called a group generated behaviour protocol where you get a group of employees to agree and commit to certain behaviours and they can be very specific.

Now, that allows you to be a little bit more objective about whether people are fulfilling the responsibilities of their job and their responsibilities to colleagues by virtue of living out those behaviours.

That can be a superior approach, but once more what you need is a sense of justice, that people believe that this is working and they think it’s fair.

You can also build this around things like 360 degree feedback and they certainly work far better on the “”””how”””” than the “”””what””””.

And 360 degree feedback is of itself a recognition program.

Clearly, if I go through 360 degree feedback and I get all this wonderful feedback and it makes me feel good about myself then that is an enduring psychosocial benefit.

And a leader can draw on that from time to time.

Of course, 360 degree feedback can also be very powerful to help people overcome behavioural difficulties or relationship difficulties.

And that’s the other side of the coin.

So recognition and redirection.

What do you want to achieve from your recognition program?

But I think that the final statement here is a really important one.

It all depends on what you want to achieve strategically.

There’s a range of different consequences that can come from recognition programs.

So one of them is purely and simply warm feelings.

I get recognition, so I believe that I’m being supported by my colleagues.

Others will have programs where you have formal structures where you get money.

Charity donations where there will be a donation to your favourite charity.

Time off.

So if you have a formal structure that allows people to award points to other people, and many of the recognition programs around the world are like this where every employee has a budget of points that they can allocate to somebody else.

Then what can happen under those circumstances is you can give them those points and at the end of a quarter or a year or something people could convert those points into maybe time off or maybe even physical goods.

Maybe even dollars could be used for something like a red balloon voucher, for instance.

But those formal recognition programs that provide this opportunity can create a situation where people can have a range of options that are available too.

Now, ethically and strategically, you’ll have to make up your own mind about whether this is a good idea.

Some organisations are perfectly comfortable with the idea that people can vote points to another employee so they get anything from a toaster to time away or something like that.

But other organisations don’t feel comfortable with that.

You’ll have to decide in your own corporate culture what’s acceptable and not acceptable from that point of view.

Other things that could be provided are things like learning and development options but it’s crucial to ensure that the offer matches your organisation’s value proposition or the reward may be counterproductive.

Make sure you reward the right behaviours

You see the words there for the Dutch kindergartens effect.

Let me explain that.

The Dutch kindergartens effect was something that was undertaken in kindergartens in Holland.

And what had happened is that there’d been a number of parents who were late in picking their kids up.

So this wasn’t to do with reward this was to do with in effect, a form of punishment.

So what happened is that the Dutch kindergartens introduced a penalty.

If you didn’t pick your kids up on time then what would happen is that you’d be fined a certain amount of money.

Wasn’t a staggering amount of money, but still, it was money.

And what the Dutch authorities expected to have happen under those circumstances is they expected people to turn up on time more.

But in fact what happened is the non-compliance actually got worse.

And what happened is that people felt that they were paying for the service of being able to pick their kids up late.

So they did it more.

So you’ve just got to be very careful with rewards and penalties that they sponsor the kind of behaviour that you’re after.

Hedonic versus eudaimonic rewards

Now, recognition.

If recognition is recognising the wrong things then of course what can happen is you’ll end up with a situation where behaviours that you don’t want to see like maybe negative competitiveness will actually increase rather than decrease.

And most people when they’re working with recognition programs what they really want is greater levels of cohesion, cooperation, and collaboration.

So rewards, there are two types of rewards and this goes back to ancient Greece.

Type number one is hedonic rewards.

So that’s pleasurable experiences.

So you can imagine if you’ve got a formal scheme and somebody gets a certain number of points they get to take their partner out for a meal or something like that, or maybe they get to go whitewater rafting or something of that nature.

You get a hedonic and enjoyable benefit.

Now, the alternative is eudaimonic and eudaimonic is an ancient Greek word which means to do with meaning and purpose.

So a eudaimonic award might be something like I get to learn something.

A eudaimonic award might be something like I get an opportunity to contribute to a charity.

A eudaimonic award might be that I get a chance to participate in new duties which will give me an opportunity to build my skills and confidence.

They’re all eudaimonic awards.

Now, hedonic awards work, but they tend to be short term.

Eudaimonic awards tend to be much more enduring.

When people get eudaimonic awards the sense of motivation that comes from that tends to be more enduring and therefore it’s a more powerful and long lasting form of award.

But there’s room for both in any recognition program.

Should everyone get a reward?

Now, a question that everybody needs to resolve in terms of a recognition program is should every child get a prize?

I mean, this is something that’s discussed a lot in the world of education.

When people have sports days or whatever should every child get a ribbon?

Personally, I don’t support that because one of the things that I find is that if people are getting an award for something that’s really not an achievement, one of the negatives of that is that it tends to reduce people’s sense of resilience.

Resilience is one of the most powerful gifts you can give anyone.

And when people are resilient, they tend to be able to cope with adverse or challenging circumstances.

So if every child gets a prize, that’s fine.

Until that child leaves the world of school and goes to the world of work, they apply for their first job they don’t get the job, they don’t get a prize.

Therefore, they’re not used to the fact that life can give you victories and it can give you defeats.

So I’m not an advocate of every child gets a prize but in the work world, there is research evidence that it can be a negative, which is to say recognition can significantly increase performance.

But recognition to three performers in a group in this particular study from Bradler et al, demonstrated that what happened is that the productivity was better than if recognition was given only to one person.

So it’s the question of being exclusive but not too exclusive.

So should every child get a prize?

No, but maybe more than one child should get a prize.

So here’s the agenda again, and what we’ll be doing in the next presentation is we’ll be dealing with leadership skills for recognition and letting you know what kinds of leadership works best for being effective in recognition.

Create an effective employee recognition program

Step 4 - Effective recognition programs require good leadership

Step 2 - The benefits of employee recognition to your organisation

If you’d like some help with creating an effective employee recognition program, based on your workplace and staff, contact us about our Employee Engagement and Wellbeing surveys.

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