Recognizing vs. Incentivizing

By Malcolm Fleschner

Talk about an uncomfortable silence. At a recent event designed to recognize stellar employees at a large tele- communications firm, a top executive stood in front of the assembled crowd calling out names of individuals to join him on stage. After announcing one name, however, no one responded until finally, from the back of the room, a voice chimed up, “He died two weeks ago.”

Admittedly, this scenario represents an extreme version of the common disconnect between senior managers and the front-line employees they’re supposed to motivate. But as Potentials Magazine points out, companies should not ignore such problems with recognition and incentive programs. With a reported one in five American workers planning on leaving their jobs in the next year because of dissatisfaction, companies looking to reduce turnover need to address this key motivational issue.

Potentials suggests the following tips for navigating the troubled waters surrounding recognition and incentives.

1. Know the difference
If you’re giving out high-end electronics to longtime employees and a congratulatory plaque to the top sales rep, you may be confusing recognition and incentives. An incentive establishes goals for the future as a means to change behavior. Recognition, by contrast, acknowledges and expresses appreciation after the fact for an employee’s accomplishments, whether that means tenure, achieving sales goals or contributing good ideas.

2. Be spurred by the moment
Incentive programs have set rules that give salespeople a specific roadmap to follow – do this and you’ll receive this. Recognition, however, should be more frequent and spontaneous, even if it only consists of a pat on the back. But don’t wait until employees hit milestones – like the 15 or 20-year mark – to recognize them because they might not stick around that long.

3. The prize is right
How you select the item or prize to give out also depends on whether you’re trying to incentivize or recognize. When honoring long term service, a so-called “heirloom” item should be given out, such as a watch, piece of jewelry, purse, artwork or crystal. How to tell the difference: think items sold at estate sales, not garage sales. For an incentive, consider items like electronics, power tools, sporting goods, travel and spa getaways.

4. Cash out
Whether you’re establishing an incentive or doling out recognition for stellar performance, avoid just handing out a check. Recipients of cash bonuses tend to spend the money on standard expenses and a few months later probably won’t be able to tell you what they did with it.