We often shut people out of the real discussions in our business – whether it’s conversations around employee benefits and compensation, shift patterns, staffing levels or even how to plan social activities WE make the decisions that matter most to our workforce and then we tell them what conclusion we’ve reached. We don’t even tell them why. Is it any wonder people get resentful?

In a perfect world, the ideal scenario is to find ways to involve our workforce in finding solutions to problems we’re encountering.

Exercises like Edward de Bono’s 6 Thinking Hats are a great tool for encouraging parallel thinking about a problem, getting everyone to critique the situation from all perspectives and then come up with solutions.

Traditional managers often feel that a paycheque and employment is in itself enough recognition and reward for an employee to be satisfied at work. “Because they’re paid to” is often the response when managers of this ilk are asked why people would be motivated to help the company achieve its objectives.

Let’s not forget, though, we’re not just trying to achieve staff satisfaction, we’re aiming for engagement; not the same thing. People can be happy in a job where they're able to fly under the radar without actually doing much. This is called presenteeism and is said to cost a business more money each year than absenteeism. Engagement requires the employee to be committed to helping the company achieve its goals. For that reward and recognition are key.

Then when we are under pressure and have a need to motivate people for a challenge or a deadline we lose the impact of incentives because people are de-sensitised to them; therein lies the problem with Transactional Leadership. If incentive schemes are ever-present they lose their impact.

The approach is flawed and we become schemers trying to motivate people with our own solutions. The problem here is that motivation comes from within and is based on a variety of personal circumstances including wants, needs, past experiences, relationships, beliefs and current circumstances. What we the schemers decide to impose on people as rewards to motivate them are actually what we ourselves find rewarding based on our own values, beliefs and circumstances; other people may not feel the same.

It’s also been proven that financial incentives like commissions actually serve as a distraction and only work in a very small set of circumstances. When the task being completed is one of a menial ‘tick-box’ nature requiring very little thought people can focus on the incentive and work quickly to acquire it. But when skills like creativity or problem solving are required and the solution is not obvious, time after time results from groups studied have demonstrated that the incentivised group’s results are inferior.

People can and will be both intrinsically and extrinsically motivated and the balance of each will change depending on their circumstances, who they’re working with and what they’re working on.

Extrinsic motivation is effectively what logical/ rational/ tangible things can happen to us externally that validate our efforts. Gamification is a good example of a system based on the principles of extrinsic motivation whereby workplaces use game-like dynamics to create friendly competition within the workplace and chart progress with scores and prizes.

Intrinsic motivation, on the other hand, is more about our emotions and how we feel within; that sense of a job well done, being really good at something or working on a meaningful project can stir feelings of self-value and encourage us to do our best.

The interesting part comes when we’re already intrinsically motivated by something and someone tries to apply extrinsic rewards to it. Studies have shown that the extrinsic rewards become a distraction and damage the individual’s drive and effort because something they already found great value, purpose and potentially joy in has now been turned into something more like work that they’re being made to do.

This could help to explain why incentivised groups’ work is often inferior.

Work that Matters

People want to do work that matters and they themselves want to matter to the company they work for and the people they work with. Those are the circumstances people find most rewarding and it comes down to the great sacrifices they make for their employers for what can feel like meaningless duties.

It’s said that we dedicate over 100,000 hours of our lives to our employers and since so many of us do that without ever seeing the bank balance change significantly (at least not in our favour…) and missing out on our dreams and families lives it’s easy to understand why people feel resentful.

Changing the deep-rooted problems within our Capitalist society may be a challenge too far for today, but the conundrum we can tackle is how we can show people the value of their work and make them feel like they matter to us. Unfortunately, this requires both creative thinking and two-way communication; two things the traditional manager following orders and enforcing rules isn’t so good at.

By asking questions and equally importantly paying attention to the answers we learn a lot about people; instead of just introducing soulless reward/ bonus schemes.

The best way to reward or recognise people is to get to know them, understand their wants and needs, care about them and strive to help them achieve their own objectives too.

Peoples’ objectives will change person to person as much as they will generation to generation. Objectives are based on circumstance so while it’s easy to get carried away with boxing people off as Millennials, Xers or Baby Boomers it’s far better to ask than to assume what will make employees happy.

Too often the flaw in the plan is the one size fits all solution where we assume the same thing motivates everybody. That’s simply not true, an extra day off or the option of flexible working may mean more to a new parent than the financial incentive that may whet the appetite of someone saving for a holiday. Having said that the new parent may need the money the financial incentive brings and the person saving for the holiday may want more time off for it! In addition, any of us can get to the point where we’re bored in our job and want to learn something new and challenge ourselves. Maybe at one stage, it didn’t suit us to work our way up the career ladder but as our circumstances change so do our wants and needs.

There’s no mystery behind it all, though, we simply need to have strong relationships throughout the company with managers who understand and care about their teams. That has to be a culture that runs right throughout the organisation and if we want our team managers to care about their people they need to have felt the same care themselves; otherwise why would they bother?

Maslow & the Impact on Engagement

On that point of understanding people, it’s appropriate to take a look at Abraham Maslow’s Hierarchy of Needs. Maslow was a researcher and pioneer in the field of psychology in the 50s and his hierarchy was the result of his efforts to synthesise a large amount of information concerning research on human motivation. In other words, the hierarchy was Maslow’s way of making sense of what motivates people to do the things they do or behave the way they do.

The hierarchy says that we each have a series of levels of needs that must be met and will determine where our focus is and thus how we behave. A fundamental premise of the hierarchy is that the lower level needs must be achieved before we can focus on the next; our primary concerns will naturally command our attention.

The ultimate position in the hierarchy ‘Self-Actualisation’ is a level that we may reach at times in our lives but there are many factors that influence our ability to stay there and how long for. Self-Actualisation is finding an inner purpose; what really drives and motivates us and allows us to fulfil our potential. Self-Actualisation is not what we do as a result of our need to cope or survive but what we do because of passion.

Most of us working in HR or L&D have seen Maslow’s Hierarchy many times but how often do we actually take the time to consider the ramifications our actions and decisions as employers have on our employees’ lives and in turn their engagement with the company?

Reward vs Recognition

Not only are we subconsciously choosing between gaining pleasure or avoiding pain, we’re choosing between what we’re going to be confronted with right now and what we can put off.

How Much Should We Spend?

Last but not least, how much should all of this cost anyway? The average industry spend on Reward and Recognition programmes is 1 – 2% of payroll. What you should spend is entirely up to your own circumstances and objectives.

The following should be taken into consideration:

• What are your objectives?
• If achieved what savings will likely be associated?
• Are you likely to generate more revenue as a result of the programme? If so what is your forecast?

When you calculate the above, trying to be as conservative as possible, it gives you an idea of what additional funds you’re likely to have available to play with. Decide how much you’re prepared to put behind the project and trial it. Make sure that you take stock of the relevant metrics in advance (e.g. productivity, attendance, staff turnover, recruitment costs) so you can measure progress.

For a couple of final tips:

1. Involve your people in the creation of your new Reward & Recognition strategy; solicit their feedback and ideas. When people are part of creating the solution they’re much more likely to buy into it, support it, defend it and understand the limitations.
2. Communicate your intentions and if necessary run workshops so everyone understands what’s available to them. Uncertainty breeds doubt and resentment.
3. Have open, honest and frank conversations. What is a company beyond the systems and the processes but a collection of people? These people want to be treated like adults and would much prefer to be trusted and informed of any limitations rather than the typical management approach of pretending the issues don’t exist and not talking about them.