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Wagering on Employee Recognition Programs

Employees must find the rewards offered in an employee recognition program personally meaningful or their behavior won’t change, and employee engagement won’t improve.

June 9, 2011
Related Topics: Employee Engagement, Performance Management
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Keeping front-line employees motivated and engaged is critical to retain customers and encourage repeat business, particularly in today’s competitive landscape, but motivation is a highly individual process. Employees must find the rewards offered in an employee recognition program personally meaningful or their behavior won’t change, and employee engagement won’t improve.

For many companies, providing exceptional customer service is at the core of the business plan. When a one-size-fits-all approach is used to inspire employees, they are taking a risk on achieving true engagement because meaningful and motivating experiences are connected to performance. If the risk fails, business outcomes can suffer.

Further, popular cash-only recognition programs often fall short in the engagement stakes. When companies use cash as the reward for incentive and recognition initiatives, employee programs can become confused with regular compensation, which creates a less effective and less flexible reward system.

A 2010 study conducted by Maritz polled 1,000 full-time employees who received some type of reward or recognition in a program. Overall, the survey found employees were less likely to share their success with others — by talking about their rewards, for instance — if they earned cash. Further, two of every five survey participants said they used cash rewards to pay bills or for other necessities such as gas and groceries.

Instead of providing a memorable, rewarding experience for a high-performing employee, cash can become an add-on to an existing salary. By restructuring an internal recognition program to a noncash reward system, companies can empower employees and motivate them to perform more effectively.

Caesars Entertainment Corp., one of the world’s largest gaming companies, embraced this approach. For nearly a decade, its employee recognition program had focused on a cash-based reward system. Over time, employees began to see the cash-only program as more of an entitlement and less of a reward. The connection to employee performance — and ultimately customer service — was fading.

To keep front-line employees engaged and motivated to provide excellent customer service to casino and hotel guests, Caesars redesigned its recognition system and wrapped corporate goals, property goals and employee desires into one unified rewards program.

Caesars’ revamped employee recognition program gives managers the ability to recognize desired behaviors that support excellent customer service at every touch point. In the months following the April 2009 program kickoff, the company’s customer service rankings improved 4.7 percent and continue to trend upward.

Now, while Caesars’ 70,000 employees work to improve the customer experience, they earn credits in a variety of ways. Instead of using cash incentives to pay a credit card bill or buy groceries, employees are using program points to purchase items with more significance.

Caesars’ vision was to create a new way to connect achievement at work with each individual’s passions and life pursuits. The approach, which was folded into the company’s employee recognition program, has been successful because it hits on four biological drives that influence behavior — the drive to acquire stuff and status, the drive to bond, the drive to create and the drive to defend. This four-drive model, developed by Paul Lawrence and Nitin Nohria of the Harvard Business School, essentially taps into things that make people tick.

By leveraging this knowledge of what motivates individuals to perform, organizations can optimize the effectiveness of their employee recognition programs. Better yet, they can make an impact on both people and profits.

Paula Godar is brand communication director at Maritz Motivation. She can be reached at editor@talentmgt.com.
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