The Organization’s Formal Reward System Paper

The Organization’s Formal Reward System Paper

Instructions/Descriptions

The Organization’s Formal Reward System Paper

It’s tough to remember much about what you did when the feedback follows many months later.

While it is true that money may get people to do a job, it doesn’t get them to do particularly outstanding work. 21 Your options are also quite limited if you rely exclusively on the organization’s formal reward system. The truth is that people respond to all kinds of informal recognition and rewards, which is the beauty of being creative and personalizing them.

We’ve seen people give out stuffed giraffes, rainbow-striped zebra posters, mugs with team photos, crystal apples, classic car rides, and hundreds of other imaginative expressions of appreciation. We’ve seen recognition done verbally and nonverbally, elaborately and modestly. There are no limits to kindness and consideration.22

It’s important to understand that genuine recognition does not have to include anything tangible. Exemplary leaders make extensive use of intrinsic rewards– built into the work itself, including such factors as a sense of accomplishment, a chance to be creative, and the challenge of the work–all directly tied to an individual’s effort. These rewards are far more important than salary and fringe benefits in improving job satisfaction, commitment, retention, and performance.23

It’s all about being considerate. The techniques that you use are less important than your genuine expression of caring. People appreciate knowing that you have their best interests at heart, and they are more caring about what they are doing as a result. When you genuinely care, even the smallest of gestures reap huge rewards.

Just Say “Thank You” Not enough people make sufficient use of the most powerful but inexpensive two-word reward: “thank you.” That is, in fact, precisely what they found at Sullivan and Cromwell, one of the oldest and most respected law firms in the United States. For years, they noticed that they were routinely losing high-value first-year associates recruited from the top law schools, so they conducted a survey to find out why. What they found was a shock: it wasn’t because of the money, the hours, or the work. It was because the young lawyers didn’t feel appreciated by the partners.

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Consequently, the firm instituted a very simple policy: Every partner was required to say, “Please” and “Thank you” whenever he or she made a request. In one year, attrition was reversed, and Sullivan and Cromwell was voted the best law firm to work for by American Lawyer magazine.24 Surveys reveal that the clear majority of people (81 percent) indicate that they’d be more willing to work harder if they had an appreciative manager, and 70 percent report they would feel better about themselves and their efforts if their manager thanked them more regularly.25

At TFE Hotels, a leading accommodation provider across Australia, New Zealand, and Europe, CEO Rachel Argaman is quite adamant in saying that “people want to be part of an encouraging workplace, where what they do makes a difference and is recognized.”26 Leaders, she believes, must make sure that people see the difference they make, and one way, she says, is just to tell them: “Thanking people lets them know what leaders feel are the core triggers that drive performance.”

For example, Rachel writes a personal note on each person’s annual bonus letter, a task that takes her over four full days. For each employee, she references a particular event, action, or behavior through which they made a difference, and then writes, “I’m saying thank you.” In describing what kept her going through a particularly difficult situation, one TFE associate said it was “the little handwritten personal notes” she received from Rachel that helped her carry on. “Those handwritten notes are what kept me here.”

There are few basic needs more important than to be noticed, recognized, and appreciated for one’s efforts. Personal congratulations rank at the top of the most powerful nonfinancial motivators identified by employees.27 Extraordinary achievements bloom more readily in climates marked with a high volume of appreciative comments. Research shows that performance recognition significantly impacts employee engagement at a rate of more than two to one. The same research finds that employees who receive strong recognition are more innovative, generating two times the number of ideas per month compared to those who receive weak recognition.28

In our studies, those direct reports who rated their leaders above average on the leadership behavior “praises people for a job well done” were significantly prouder, more motivated, and more committed to the organizations success than the direct reports whose leaders are rated below average on this behavior.

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Researchers have found that members of top-performing teams provide at least three, and as many as six, times the number of positive comments for every negative one they make. Medium-performing teams average about twice as many positive comments to negatives ones, but the average for the low-performing teams is almost three negative comments for every positive one.29

It is always worth the time to recognize someone’s hard work and contributions. All too often, people forget to extend a hand, a smile, or a simple “thank you.” People naturally feel a little frustrated and unappreciated when their manager or a colleague takes them for granted. Sometimes they overlook this because people are under the pressure of deadlines, and the mandate to deliver on time overtakes expressing gratitude. However, it’s critical that you stick around for that extra minute to say thanks. Olivia Lai recalled that when managing the customer service team at Kimberly-Clark, it genuinely mattered to her constituents that she said “Thank you” and “I really appreciate your help.”

“You should see the smile that it generates,” she says. “It gives them a warm feeling knowing that their work was welcomed and recognized by others.” Olivia understands that for leaders, it’s not just about achieving financial results and delivering on annual objectives. It’s also about creating a winning team through trust and a personal connection. It includes extending a simple pat on the back, a handshake, a smile, and a “Thank you for your hard work.”

Expressing your thanks also has another, more personal benefit. Robert Emmons, professor of psychology at the University of California, Davis, finds that people who practice gratitude, compared to those who do not, are healthier, more optimistic, more positive, and better able to cope with stress.

They are also more alert, more energized, more resilient, more willing to offer support to others, more generous, and more likely to make progress toward important goals. 30 From a similar perspective, David Novak, as co-founder and former chief executive officer of Yum! Brands, observed that the path to success wasn’t about tasty food, excellent service, innovative menus, and value; it was in the power of recognition. “The important thing to understand about recognition,” he maintains, “is that it’s simply good for people–all people–no matter who they are, what they do, or where they come from.”31

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The wonderful thing about expressing gratitude and providing recognition is that they aren’t hard to do, and you don’t need to be in a hierarchical perch to dispense them. They cost you next to nothing, and yet pay daily dividends. You can’t ask for a better investment than that.

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Recognize Contributions

Exemplary leaders have positive expectations of themselves and their constituents. They expect the best of people and create self-fulfilling prophecies about how ordinary people can produce extraordinary actions and results. Exemplary leaders’ goals and standards are unambiguous, helping people focus on what needs doing. They provide clear feedback and reinforcement. By maintaining a positive outlook and providing motivating feedback, they stimulate, rekindle, and focus people’s energies and drive.

Exemplary leaders recognize and reward what individuals do to contribute to the vision and values. They express their appreciation far beyond the limits of the organization’s formal systems. They enjoy being spontaneous and creative in saying thank you. Personalizing recognition requires knowing what’s appropriate individually and culturally. Although recognizing someone’s efforts may be uncomfortable or embarrassing at first, it begins by making a personal connection with each person. Learn from many small and often casual acts of appreciation what works for each of your constituents and how best to personalize recognition.]

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[To Encourage the Heart, you must recognize contributions by showing appreciation for individual excellence.

This means you must:

1. Maintain high expectations about what individuals and teams can accomplish.
2. Communicate your positive expectations clearly and regularly.
3. Create an environment that makes it comfortable to receive and give feedback.
4. Find out the types of encouragement that make the most difference. Don’t assume you know. Ask. Take the time to inquire and observe.
5. Be creative when it comes to recognition. Be spontaneous. Have fun.
6. Make saying “thank you” a natural part of your everyday behavior.

The Organization’s Formal Reward System Paper

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