Rewards

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This article can be a little Machiavellian; cunning , deceitful and callously manipulative.  You thought this was going to be the pleasant article- when we talk about being nice to people, which is true, but we are being nice to people to achieve our ends.  Most of the time our interests will align with their interests, and we how to give people want they value, but remember-we are also serving our own purposes.

See here for one example on how perception is a big part of the value of money.

What are rewards?

A reward is a gift given in recognition of action(s), something (tangible or intangible) of value given after the action of the recipient, that the bestower was not obliged to give.  The idea of a reward is a very old one, it’s been around for a long time; it’s honours and titles to knights, it’s medals for bravery, modern knighthoods for community service. 

There are some important attributes when we consider rewards.  First, they are not obliged, or even expected, to be given; if they are, then that is akin to remuneration- the price to be paid for the agreed service.  Second, they have value to the recipient, which includes money but not exclusively; I used the examples of titles and medals specifically to demonstrate that rewards can have no financial value, but can be valued. 

Thirdly, they are given with the intention to promote cultural values, to perpetuate a narrative we collectively believe is important.  Militaries give medals to promote behaviours of bravery and loyalty, which are critical values for the military to succeed.  Modern governments bestow civic honours for community service to encourage and support the idea of dedication and service to your community.

What is a reward that doesn’t reinforce a cultural value? A lottery.

See here for more on why some employees end up with more than others.

Rewards & positive behaviour

Let’s discuss some very basic psychology- many of you will know this, but let’s touch on some core principles of how animals (including humans) work.  If a behaviour is punished (i.e. there is a negative consequence of that behaviour) then it is less likely to be repeated.  If a behaviour is rewarded (i.e. a positive consequence) then it is more likely to be repeated. 

This is basic stuff, but here’s the important part.  You can’t get good behaviour with punishment; punishment will stop undesirable behaviour, actions or decisions, but it doesn’t encourage desirable behaviour.  If you want to encourage desirable behaviour, you need to reward it.

Non-financial rewards

Let’s keep this insight going by talking about non-financial rewards.  By this I mean anything given that has no significant monetary benefit or cost. 

We know humans derive more from their work from just the contractual reimbursements for their labour.   This is a large topic that we don’t have time to get into here, but all we need to recognize is that humans get other benefits that they from their job;  prestige, pride in their work, sense of purpose, opportunities to do good for their community, power, respect from others- the list is long, but nor is it universal.  Everyone has different motivations, so there is no ‘one rewards fits well’ or at least there is variance in the efficacy of universal rewards between individuals.

Examples of non-financial rewards include employee of the month, certificates of achievement, national awards based on company values, shout-outs in internal newsletters.  All of these have two important attributes;  a form of behaviour the organisation wants to encourage, and public promotion of the employee’s importance, which is something most people value.

Thanks and praise

One reward often forgotten but always worth discussion and the consideration, is thanks and praise.  Thanking someone for their effort is a very small reward.  Almost everyone values appreciation of their effort, and admiration of their work.  They are not the only form of rewards a company or a manager can give, but they are easily given and always valued. 

Structured rewards (employee of the month, company values awards, etc) are the domain of HR.  Thanks and praise is a the domain of line management, but as I’ve discussed elsewhere, much of what HR is trying to achieve is achieved through line managers.  We can’t make line managers give thanks and praise, but we can coach and educate them on the ideas, and help them refine their own management style to consciously include them.

One discussion I like to facilitate when coaching line managers is the question, ‘how much is too much, and much is too little’ when thanking employees, and complimenting their work.  Everyone agrees that too much and too little exists, but what is right for them is dependent on their personality and philosophy.

Financial rewards

So thanks, well dones, and certificates have their place, and shouldn’t be forgotten, but you want to go a bit further.   Rewards can be money, but also can be things with monetary value, and in fact these are often more common.  Examples include team dinners or events for success project completion, paid time off for extra effort and results, or gift cards. 

Monetary benefits are done, and vary from culture to culture in frequency.  It is necessary to note that monetary rewards can blur into expected remuneration, so let’s talk about them in their most common form, the bonus.

Bonuses are sometimes contractual, in which case, they aren’t rewards, they are a form of contingent pay (this is discussed elsewhere).  Alternatively there are bonus systems, where bonuses are not contractually required, paid at the discretion of the organisation, but based on successful achievement of individual and/or organisation targets.  Whether these are  rewards as discussed above, or elements of remuneration, is debated, and often varies due to individual perceptions, and company and national culture.  To keep this simple, if you are reviewing your HR practices to consider whether you are encouraging positive behaviour through rewards, you need to look beyond any bonus system you may have.

My chocolate fish policy

This a policy of my own design, freely shared here.  It’s not rocket science or revolutionary, so it does cover some of the core elements.  In New Zealand there is a chocolate bar called a chocolate fish; it’s small, cheap with little real value, but there is a tradition that its given to children as a reward (that bit I’m not claiming credit for).  My policy is that HR would give a chocolate fish to any employee that their manager recommends them for. Others can suggest to their managers that they are deserving, but it has to be the manager, and has to be done now. 

This simple little system provides praise, an actual physical reward, recognition by their boss, and an opportunity for others to recommend deservingness of praise to their boss.  It creates a higher step on the ladder than ‘thanks’ or ‘well done’ but nothing large, cumbersome, or (to some) cringeworthy.

Listen here for more about positive fish.

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