Reward and Recognition Pathways and Pitfalls
By: Jim Clemmer
Jim Clemmer is an international keynote speaker, workshop leader, author, and president of The CLEMMER Group, a North American network of organization, team, and personal improvement consultants based in Kitchener, Ontario, Canada. His other bestsellers include Firing on All Cylinders: The Service/Quality System for High-Powered Corporate Performance, and his most recent book, Growing the Distance: Timeless Principles for Personal, Career, and Family Success. His web site is http://www.clemmer.net/
"No one is apathetic except those in pursuit of someone else's objectives."
ó Henry Ford, early 20th century American automobile pioneer
- Don't use money to try and shape behavior or boost performance. It rarely
works. If you think it has in the past, what happened when you took the
carrot away? No doubt, performance slipped and you were left with stimulus-dependent
people looking for progressively bigger carrots. Unless people feel compensation
and bonus systems are a major block, leave them alone.
When you do need to review or adjust your financial rewards, get the people
you're compensating involved. They should give you feedback on your current
approach and improvement ideas. Ideally, they would design and own the
- Keep reward programs simple and direct. Everyone should easily understand
them. They should also see a direct connection between what they or their
team does to serve customers or partners and their compensation. That argues
for shared or self-managed teams operating in a decentralized structure.
We've found that simple three tiered compensation systems work well: (1)
personal, (2) team, division, or plant, and (3) corporate profit sharing.
Base the rewards on an open-ended percentage of earnings, not performance
to a budget or projections (that just invites game-playing at budget time).
- Whose needs are your recognition and reward systems designed to serve?
What are the goals? Are they to manipulate, control, and "motivate."
Or do they build an atmosphere of helpfulness, appreciation, and high energy.
How do you know? As with beauty, quality, or customer service, reward and
recognition are in the eyes of the holder.
So get all your partners involved in designing meaningful reward and recognition
systems and practices for each other. Involvement can happen through combinations
of gap analysis, focus groups, teams that study and recommend, or teams
that design and implement the reward system.
- Get clear about want is to be rewarded and recognized and by whom. Move
management out of the role of deciding who gets rewarded and recognized
for what behaviors. Work with your partners to blend customer/partner input
with your team or organization's vision, values, purpose, strategic imperatives,
and improvement goals. Set up systems, programs, training, and provide
a personal leadership example that gets customers and partners involved
in giving frequent recognition and appreciation to each other.
- Make sure there's a good balance between rewarding and recognizing both
current performance and improvements. People who do well today but aren't
improving won't help your team or organization get better. Anyone who's
not continually improving will become a liability.
- Don't set up competitions for limited rewards ó unless teamwork isn't important
to you. Fear of failure and losing doesn't create energy. Find ways to
meaningfully recognize and energize as many people as possible.
- Avoid suggestion systems. They reward people for lobbing ideas at others
to implement. They work best in a paternalistic culture where they reinforce
traditional management control rather than shared or self-management.
- Donít use promotions as a reward. People should only be put into larger
leadership roles because they have demonstrated the capacity, vision, values,
skills and so on for ever higher levels of leadership. Using promotions
as rewards puts an unhealthy focus (and competition) on position, rank,
and titles as a means of measuring worth. It also sets the promotee up
for resentment and failure in his or her new position.
- Traditional performance appraisals are dangerous and detrimental to performance.
They rarely work. Thatís why organizations are constantly changing them.
Why are you doing them? If it's to manipulate and control behavior, you're
paying a big performance price to indulge this fiendish. If it's to develop
people, replace appraisals with frequent performance discussions and coaching
based on 360 degree feedback.
- Separate compensation and performance discussions. They serve two different
(and often opposing) purposes. Over 85 percent of the factors affecting
individual performance are in the system, process, or structure of the
- Build jobs around people. Align good people with what they like to do and
what needs doing. Helping people to grow, expand, and move to new challenges
and opportunities are some of the best ways to show sincere recognition
and genuine appreciation for their improvement efforts.
- Keep measurements, improvement progress, and recognition highly visible.
Use scoreboards, bulletin boards, voice mail, electronic or printed announcements
and the like.
- Recognize and reward both individuals and teams.
- Use wide variety of constantly changing ways to recognize and appreciate