Recognition is Reward

When I wrote "The Seven C's of Employee Engagement," I included Compensation among the "C's".  Here's the reference:

Compensation ... employees must associate recognition and reward with accomplishment.  If genuine accomplishment requires "above and beyond" effort, then it is not hard to see that a company will need to recognize and reward such effort in order to sustain it.  Sustained "above and beyond" effort is employee engagement. 

I promised to write more about this later.  It's been a while, admittedly, but here it is. My first and most critical observation: the words "recognition" and "reward" are not synonyms.  They have, in fact, very different meanings.  In my experience, companies make their most consequential mistake, an act of omission that impacts employee engagement negatively, when they inadvertently treat recognition and reward as the same thing.  Think of it like this: the road to reward passes through recognition. Let me explain.

RECOGNITION

Webster's dictionary defines recognition simply as "the act of acknowledging." Recognition can be positive:

Mary, I appreciate that you used our new software tools to solve the customer's problem. I thought that we would need to send people to the customer's office. By thinking creatively, you spared us the need to deploy onsite support and in so doing saved us and the customer money.

or it can be negative:

Michael, I have to tell you that I am disappointed that you appeared to stop listening to our client this morning.  I know that this client can be demanding and difficult.  And his approach can feel demeaning. That said, you ended the meeting today without the information we need to move forward.

Rewards granted without "the act of acknowledging" are perceived by employees, even those receiving the rewards, less favorably as they signify a leader's failure to connect performance and reward. How can a leader represent to an employee that a reward is deserved if she or he has been too far removed from the work to understand what a successful outcome demanded?  Predictable connection of performance and reward is critical to employee engagement.

Here's the best example of "recognition" I can think of, derived from my own work experience:

I was working for a Lockheed Martin (now Bechtel) contract in upstate New York called KAPL, which is an acronym for Knolls Atomic Power Laboratory.  At a high level, employees working on this contract engineer systems to propel marine vessels. The task in front of me was to work with the leadership of the Lab to craft a salary structure and salary increase program that had the labor market as its basis.  Today, this sounds rather benign; everyone practices market-based pay. But back then, the employees on the contract had a strong General Electric heritage, as GE was the former contract holder, and with that heritage had grown quite comfortable with the old GE Salary Card structure, which would lay-out one's salary progression for years into the future (somewhat like a government employee wage scale).  They never gave it up, even though GE did.  Moving from the almost guaranteed progression offered by a salary card to something called "market based pay," with guarantees of nothing more than a market competitive pay model, was not trivial. In fact, it was so frightening to some that there were strong hints of attempts by outsiders to organize the professional workforce.  Now to management, that was frightening.

The leader for whom I worked during this effort exemplified what it means to "recognize" an employee.  He started by explaining the task in front of us and setting expectations for me in terms of cost, timing, quality, and end product features.  He was composed but resolved that we would succeed.  He scheduled daily check point meetings to assure that I had access to whatever resources I needed to complete the work.  He engaged with me in necessary debates over work progression and decisions underlying various aspects of the work to assure that he was giving me the very best of his knowledge and experience.  He supported me throughout the effort, both in terms of cost and provision of additional resources.  In fact, he went so far as to assign an honest-to-goodness Nuclear Physicist to mentor me through the complicated mathematics underlying the effort.  He was aware of the progress of the work and could represent it to higher level audiences asking for status. And, perhaps most importantly, he defended me when things got tough and the leadership team started to consider various forms of concession and retreat.

Mind you, he did not do the work; that was what he was paying me for.  But he remained engaged to such an extent that we had a chance of successful adoption of the design we constructed.  His engagement was the ultimate "act of acknowledging."  When leaders miss this, there is no reward big enough to recover the employees sustained commitment as they interpret rewards to be political or a monetary or tangible "apology" for their manager's abdication of responsibility to manage.

RECOGNITION SYSTEMS

Please consider that in the entire description of my leader's engagement with me at KAPL, I never mentioned the word "reward." And in this reality lies the leadership lesson:  there is no reward without the act of acknowledging the work that gave rise to it.  

Prior to innovating the most cost effective and impactful rewards model in your industry, enabled with the most state-of-the-art IT solution, you need to first assure that you have mechanisms in place to accommodate the "act of acknowledging."  Ask yourself questions like these:

1. Does our organization really hold managers accountable for managing their people? Really? We have all heard of "catching someone doing something well."  Are our managers expected to catch their people doing something well?  Do we ask them about this?  Are there stories told about it?

2. Do we provide systems - policies, processes, enabling technology, training - that enable our managers to manage a physically proximate and virtual workforce?  Are we leveraging instant messaging, video phones, and other forms of virtual technology to engage our remote workforce?  Are our managers expected to spend a dedicated portion of their day just managing their people?  For example, do we ask that they hold team stand-up meetings or manage by walking around? Do we have adaptations of these forms of engagement for our virtual team members?  Do they know this?  Are there stories told about it?

3. Are we mindful of span of control and layers to assure that our people don't fly under our own radar?  In my experience, companies ask their managers to make too much of an individual contribution and not enough of a leadership contribution.  I believe that if we truly expected managers to lead, they could manage larger teams.  What limits span of control tends to be our expectations for the individual contribution of our managers.  The lost individual contribution should, over time, be recovered with heightened organization capability (i.e., better equipped people).

4. When rewards are granted, can we tell the story of the work that gave rise to the reward?  Do we ask our managers to tell that story: "We were asked to resolve a critical customer outage overnight and with just the two technicians who were on-call.  I called them, we outlined the game-plan, I checked in on them as they went to work, and we closed an hour ahead of commitment." 

5. Do we enable our managers by giving them the means to grant on-the-spot rewards for acts they've acknowledged without unnecessary levels of approval and associated delay? Over the course of my experience, I have heard so many debates about whether rewards should be managed centrally or decentrally.  What gets lost in centralized models is the disablement of our managers as they are left with no resource to reward their people on-the-spot for doing something well. I think people are seeing this, and decentralization is winning.  However, I have observed in a number of settings that more senior leaders are pooling the on-the-spot reward budget at their level to assure distribution fairness among their managers. Noble ideal, but such decisions defeat the very design of an on-the-spot program.

Perhaps the most important question:  Do we have a recognition system?

With appropriate mechanisms in place to accommodate the "act of acknowledging,"  our discussion can turn to rewards.  I won't spend too much time here, as this territory is so well covered in the literature.  I will, however, emphasize rewards that are intrinsic in nature.

REWARDS

Intrinsic rewards are expressions of praise and appreciation offered by managers to their employees for successful work outcomes and/or behaviors they'd like to reinforce.  Now, I am going to risk sounding like a broken record - absent mechanisms in place to accommodate the "act of acknowledging" - there is no such thing as a valuable intrinsic reward.  The road to reward passes through recognition  

Here's a story:

I was working for IBM Chicago, helping the VP Sales for the Central US Region turn-around sales performance in the region.  He believed that one of the most important things we could do to elevate the region's performance was to create a local "jobs database" as a means to communicate to the 16,000 people working in the region that there were opportunities for them with IBM that would not require relocation. Moreover, my experience taught that people from Cleveland, Green Bay, Lincoln, and Minneapolis, etc. had deep, generational ties to their communities and wanted to raise their families there. They also wanted a career, but managing the two became a problem since there simply were not that many promotional opportunities in a place like Topeka.

With the advent of technology and new found means to work virtually, there were many more opportunities available to our people than they knew.  My job was to make sure that they became aware of them.  I white-boarded a few ideas with my VP, gained his support of a design, and put into production a homegrown, labor intensive, inefficient solution that would suffice only to get quickly to market but not survive over the course of time and heightened access.  

A more elaborate solution would come later.  After about a month into production we found that my VP's instinct was dead-on. Our people loved their little jobs database and clamored for greater functionality. One day, I arrived at work to find a card on my desk asking me to meet my VP at a local restaurant for lunch.  When I arrived he was already there, sitting at the table and waiting to treat me to lunch.  When I asked what was up, his answer was that this was his way of thanking me for making the jobs database a reality.

He was a part of the concept, design and deployment.  So, he solved for the act of acknowledging. When he married his involvement with his willingness to join me for lunch, a form of intrinsic reward, he bought my discretionary effort (i.e., engagement) forever.  Now that is a productive use of a reward.  

The leadership lesson:  A well-managed recognition system that marries systematic "acts of acknowledging" with thoughtful intrinsic rewards may, in and of itself, be sufficient to motivate employees to offer their discretionary effort.  Meaning, extrinsic rewards may really be "icing on the cake."  Just don't let them be an "apology."

Paul E. DuCharme. August 2013