Cash Just Isn't Enough!:
How to get more from your employees
By John Schaefer
When surveyed, employees consistently will ask for cash, but
research shows that it is the least effective form of recognition –
How come? Steve is a loyal employee who enjoys his work, is
productive and reliable – the model employee. He was surprised when
his 10-year service award package offered him cash as an option. It
wasn’t like he couldn’t use a few extra bucks, but the fact that his
employer was able to put a price tag on ten years of his life, left
him feeling a little cold and confused.
Why is it that when the company offered the very thing that
employee’s seemed to want, that it fell short of carrying the
important message – “we care about you and are glad you’re on our
team”? Maybe it has something to do with the question? Asking
employees what they want tends to imply that you don’t know and
really don’t care all that much. The moment they think that you are
using recognition more out of obligation than desire, they will
emotionally disengage, feel a bit insulted, and give you the answer
they think you want to hear – “ . . . Aw, what the heck, just give
me a gift card!”
It actually has
to do a lot more with perception than logic. Employees want so much
to be genuinely appreciated, that the minute you give them the
smallest hint that you’re attempting to manipulate them with carrots
and sticks, you lose.
It’s really just
about doing a few very basic things right and in the correct order.
This requires training supervisors to understand some
straightforward principles, realize that it’s to their personal
benefit to make recognition a powerful management tool (appeal to
their natural self interests – in a good way!) and communicate more
effectively, so their people believe they mean it.
emotional engagement is achieved, you’ll be amazed at how quickly
financial incentives can take you and your firm to another level of
measurable, bankable ROI that will have everybody wanting more.
It’s an educational challenge that too many companies ignore, but
are paying for over and over again.
No one disagrees that cash is important.
The reality is, however, you owe it to yourself and your
stockholders to do what’s best with the company’s money. The data
overwhelmingly supports the fact that well-designed incentives will
out-perform cash by more than 2 to 1, as well as carry far lower tax
consequences. Supervisors will embrace these tools when they
understand their value, see what’s in it for them, and have a clean,
well-defined path to run on. You can give a gift valued at 1% of an
employee’s salary, and if done enthusiastically, they’ll feel the
love. But, give them a 1% bonus or raise and they’re looking at the
classifieds. Same dollars, totally different result . . . it’s all
Most companies use
a variety of disjointed programs to recognize and reward their people. Even if the programs
are working, it’s impossible to determine the level of participation
and financial return. Imagine if you orchestrated all of the tools
used to communicate with employees, so they could be properly
measured, kept relevant to company goals and you could easily teach
your supervisors the proper way to implement them. This is called
an Umbrella Recognition Strategy and the benefits are numerous.
However, there can be potential challenges involved in transitioning
your organization to this approach. Here are the three steps you
should be willing to take to consider implementing an Umbrella
You need to
have upper management support. Only then will you be able to
get all of the program owners to open up and provide the
information needed to analyze the current situation and begin to
see opportunities for improvement.
Your team has
to be open to new ideas and be willing to brainstorm all viable
options. One of the few positives to this current economic
downturn is that things are on the table today that would
probably not be open to discussion during more robust financial
The goal of
your team needs to focus on developing the greatest ROI on your
recognition investments, not protectionism or departmental
isolationism. A macro view of the situation, where everyone is
considering program initiatives from a broad perspective based
on company culture, mission and long term objectives is the
secret to getting the best overall program and the ROI you
As you begin to
evaluate your current recognition programs, you’ll be surprised at both the amount of money
leaking out of the organization in various ways and why there may be
inherent confusion from the employees’ perspective. We recommend a
Four Cornerstones approach:
People need to see where they fit in the overall
scheme of things. Every employee wants to know the direction of
the organization and the plan to get there. Communication
addresses the “what to do” and provides a professional,
Managers need to know how to give recognition rather than
just presenting awards. Training focuses on the “how to do” and
is an important element to Performance Improvement. Effective
training avoids your best intentions being seen as nothing more
than “throwing ‘em a bone”.
Recognition is not an event, it’s a process. Employees need to
“want to”, but how do we achieve this emotional engagement?
It’s done by validating. Employees must feel important and
appreciated when they go the extra mile.
Things that are measured tend to improve. Measurements address
the “how are we doing”. With the vision and strategy in place,
the objectives and responsibilities of each employee to support
the strategy must be determined. This is the most overlooked
part of performance improvement programs, because it requires
responsibility and can often be uncomfortable. Outstanding
employees want to be measured and ineffective employees want to
No one disagrees
that cash is important. The reality, however, is that as a company,
you owe it to yourself and your stockholders to do what’s best with
the company’s money.
There’s a lot more
to this than just handing out awards and gifts, but therein lies the
opportunity to turn accepted expenses into significant profits.
Companies that take on the challenge of embracing this new view of
employee engagement are seeing impressive improvements in
productivity, profitability, morale and teamwork along with
significant reductions in the turnover, recruiting and safety
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