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Rewards, Resentment and Embarrassment

Use Rewards and Incentives Carefully

A team celebrating the achievements of an individual member

All employees are 'rewarded' for the work they do in the form of a salary. There are very few jobs in the world where a person would happily do it for nothing, and even if they would, they still need to be earning money in order to pay bills and purchase goods. They therefore require paying for giving up their free time, coming into work, and performing a function which contributes to the success of the company.

In most cases though, after an initial burst of enthusiasm and productivity when they first start and are trying hard to impress their new employer, most employees with soon settle into a comfortable level of working. They could do more if they really tried, and similarly, they could do less if they decided to, but instead there is a level reached at which both managers and the employee themselves feel is a calm yet acceptable level of production.

For most businesses though, the need for effort and completing tasks will not be uniform and consistent. There will be quiet periods, in which managers are likely to be more lenient towards workers taking things a bit easier if there is not much for them to be doing, and there will be busy periods when things are frantic and management require maximum effort in order to meet deadlines. In this busy time, additional rewards and incentives can be offered.

Rewards and incentives can be used to significant effect in motivating workers and employees to raise their performance levels. They can be a powerful factor when there is a requirement for improved output, for example to fulfil a large order by a certain deadline. However, as with anything of great power, they need to be used carefully.

Different Types of Rewards

Businessman gift reward concept

There are many different types of rewards available to managers to use. The most obvious, and by far the most common, is a financial incentive in the form of a bonus. Typically used in conjunction with targets, the monetary bonus is awarded if the set goal is reached or exceeded. This is ideal when the target goal is easily measured and defined, and the success or failure to accomplish it can definitely be decided e.g. “produce 300 finished units by 12th July”. There is little room for ambiguity in this; either the target was reached or it was not.

Other companies, however, may not have such clear cut targets. A prime example are those operating in the services sector rather than manufacturing, where output is not so easily measured as it is for a business that makes physical products.

For these companies, employee performance in areas such as customer service may be the focus for rewards. As well as a monetary bonus, there are also other options available, including:

  • Non-monetary items such as gift hampers, alcohol, flowers, gift certificates... The list is endless. Make sure it is actually something the person will like though. It is no use rewarding someone with a nice bottle of wine if they don’t drink alcohol!

  • Positive Feedback. This costs nothing, so will not create a financial burden for the company (see “The Financial Costs of Rewards” section further down). It is surprising how powerful this "free" reward is in terms of motivating an employee. If they feel they are slogging away and nobody cares they quickly become demotivated, whereas knowing that a manager recognises their efforts and appreciates their contribution can inspire them to work harder in the future. Positive feedback will allow the manager to explain exactly why they are so pleased with the employee, and be specific about what was done well, which can also be useful going forward, as the employee should carry on doing it.

  • Public Recognition. This is quite similar to the method above, but whereas positive feedback explains specific points, public recognition generally just confers praise upon a person in front of everyone else. The most common examples is an employee of the month award, or an end of year awards ceremony. Managers need to be careful though that the person receiving public recognition doesn’t feel embarrassed, and that everyone who should be is recognised. (See "How Will the Employee React to Public Recognition?" section below)

Of course, this is not to say that a manufacturing company cannot use any of the other rewards listed above along with production bonuses! A key management skill is being able to know which bonuses to use at what time, and what type would motivate an individual person the most.

How Will the Employee React to Public Recognition?

A female worker embarrased in a group

Managers also need to keep in mind when dispensing with rewards that workers are individuals and each will react differently to recognition which may be extremely different to how the manager would if they were in their employee's shoes.

Just like some people do not like a fuss made when it is their birthday, there will be some employees who will suffer embarrassment and hate the attention that comes with being praised in public and would much prefer to be quietly praised in private with the manager, such as a business coaching session where the achievements of the employee are discussed.

Conversely, there will be others who will be much more motivated to achieve great things if it leads to a great show of public recognition and the metaphorical spotlight being shone on them.

Does More Than One Person Need to be Rewarded?

Two employees sharing a bonus gift from their company

Rewarding and praising an employee can also lead to resentment from the other members of staff, especially if they feel like they helped to achieve the successful outcome and are not being given any credit for it.

A classic example is an account manager receiving credit for the successful gaining or retention of a major client when people in other departments such as administration put in a lot of time and efforts which helped everything progress in an organised and efficient manner which impressed the client and was a key part of winning the business.

A failure to recognise everyone involved can create resentment and divisions amongst departments or individuals which can seriously affect the future performance of the business entity as a whole.

The Financial Costs of Rewards

A surprised and happy company employee

Not only can rewards be financially expensive in terms of the cost of paying out bonuses or buying non-financial rewards for staff such as food/drink or flowers, but workers can become greedy and expect to receive a bonus every time they are asked to do a task. This can either become extremely expensive for the company if they do pay out each time, or if they do not, workers may become extremely de-motivated and wonder what they did wrong.

Managers must therefore use bonuses and rewards sparingly, only using them for truly exceptional performance or in times when meeting a deadline is critical. The more they are used, the lower their power in motivating employees, and the more dependent/expecting employees will be on receiving them.

When used sparingly and correctly, rewards can provide tremendous short-term benefits. But if overused or mismanaged they can soon cause expensive headaches for the company, reducing profits significantly and proving ineffectual in the future when they may be needed the most. The rewards also need to be meaningful if they are to have the desired impact.

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