Reward Madness - Recognition Intelligence

You’d think rewards would motivate team members to dizzying heights of performance. A few dinners, a cash bonus twice a year, maybe a once a year “Goals and Mission seminar” with guest speakers. You might even have a reward system where you can send points or gifts to your team members – if nothing else, a mug or two thrown in for good measure ought to fix the team right up. Get them juiced and raring to go!

Hmmmm … Why is it we just get the same ho hum, “yawn” when we talk about corporate or organizational challenges? How come the team can’t see what a difference they can make? and why is it our reward program doesn’t motivate them to achieve exponential change in solving the challenges we have?

Recent studies show that all the above only works for the team members just hired and then only if they came form a culture worse that yours. Almost all team members see all of the above as part of their expected wage treatment, which means all of the above is only the opening ante in the Rewards Madness struggle for leaders to be in the game.

To prove my point, lets take a look at a company that was in the news several years ago.

A large Insurance company (names removed to protect the “innocent”) suffered from a liquidity crisis when its credit ratings were downgraded below “AA” levels in September 2008. The United States Federal Reserve Bank on September 16, 2008, created an $85 billion – yes, that’s BILLION credit bailout to help this company with it’s creditors and finical obligations. Then this company paid out regular annual bonuses to their management team. Most of us would wonder why they would consider that their team earned a bonus. Did they achieve incredible or significant gains in their objectives? Are they the best in their field? Do other’s perceive they’ve added value to their industry and the world?

Thankfully saner minds prevailed.The US government deducted $165 million from the proposed bailout. This company has some significant problems, not the least of which is their “Reward Culture”

Simply put, I believe the company gave bonuses because it’s expected and part of their corporate culture. I’m sure they have a very detailed, complex and transparent rating system that proves each and every bonus was fairly allocated to the team member who received it. In addition, your rating/value system usually drives what you achieve … so if your objectives are to sell as much insurance to cover bank loans as possible with out consequence to your bottom line, then I suppose we could say their team members achieved brilliant success.

Lets get back to rewards and recognition. You probably realize now that rewards can often back fire in your organization and actually deliver a culture that is absolutely 180 degrees out of sync from what you’re trying to achieve.

I’m not saying rewards aren’t necessary. Remember that in my opening paragraph, I said that rewards are expected in most organizations. It’s like providing work gloves, chairs or pencils. Nothing gets done until the basics are met.

What’s absolutely critical is that rewards are tied directly to your organizations top 3 objectives. At least 90% of the weighting for ratings MUST be tied directly to your top 3 objectives. I mean this as a corporate objective…don’t be fooled by creating department or team objectives that allow small groups to pad their rewards by identifying their own objectives. The company either makes it and everyone partakes of the rewards., or NO ONE DOES.

Now something entirely separate from rewards, but even more crucial for ongoing success for organizations is their recognition program. Let me be crystal clear here. Reward and Recognition are NOT the same. Recognition needs to happen no matter how well your objectives are being achieved. In fact great leaders know that when the going gets tough – that’s the time to provide the highest levels of recognition.

Studies have proved that rewards seldom motivate people to great things and if there is any motivation from rewards, it lasts about as long as the blink of an eye. On the other hand an Intelligent Recognition process applied by an enlightened leader can cause incredible shifts for sustained periods across a large intact team.

More on Recognition Intelligence in future articles.