Book review: Rewarding the right way

Do you know who works for you? Their passions, their interests, their lives? If you don’t know what makes them tick, how can you expect to motivate them?

Such is the kernel of truth in “The Carrot Principle” by Adrian Gostick and Chester Elton, executives from the corporate recognition firm O.C. Tanner Company.

“The Carrot Principle” is a fascinating account of the secret ingredient that sets seemingly similar companies apart — recognition.

At times, the book does seem like a subtle infomercial for other “Carrot” products (including the all-too-perky and pervasive orange color), but if nothing else, the depth and breadth of the authors’ research does stand for something.

Gostick and Elton interviewed 200,000 people over 10 years, from companies with fewer than 200 employees to multinational firms with more than 2,000, and found in the vast majority of the time,

one-time monetary bonuses have little lasting value as far as motivating employees to greater productivity.

Meaningful rewards that support the company’s values require managers to really get to know their workers, say Gostick and Elton. That means finding out their likes and dislikes, their hobbies, even learning their personal motivators for doing a job well.

The best reward “is always personal and tailored to employee interests and lifestyle, given by a manager who cares enough to find out what motivates each individual,” write the authors. “The funny thing is, managers who invest in choosing relevant awards sudden find themselves becoming much more relevant as well.”

The authors say that recognition also should be immediate and appropriate.

For example, for an employee who stays an hour late to finish up an important project, bringing in coffee and donuts the next morning with a personal, heartfelt thanks in front of the rest of the team is a great way to recognize that person’s contribution — perfectly immediate and appropriate.

Putting donuts in the break room three weeks later with no recognition — perfectly wrong.

The size of the reward, write Gostick and Elton, also must match the effort as well.

An employee who’s the steady hand of your team and always gets the report in on time deserves a gift certificate to her favorite restaurant or movie tickets. Perfectly appropriate.

Now let’s say that same employee has redesigned a manufacturing process saving the company $1 million a year or walked the firm through a two-

year certification process leading to a multi-year contract with an up-chain supplier. You give a certificate to Applebee’s. Perfectly inappropriate.

The authors cite many reasons managers fail to recognize employees — it will create jealousy, it will becoming meaningless, it takes too much time — and show how these misconceptions do far more harm than good if they prevent proper recognition.

Gostick and Elton say the fear of creating jealousy among employees, named as the number one reason managers fail to reward, can be easily overcome by making sure everybody gets some recognition. They suggest just a simple weekly thank you — verbal, by note card or e-mail — for working hard or some other day-to-day quality will strengthen performance and motivate the rest of the team to work harder.

“As we have visited teams where recognition is frequent and is aligned with core values to avoid favoritism, employees do not complain of jealousy,” the authors write.

Another mistake often made in recognition programs is a reward for reward’s sake or a reward with a “but” (as in, thanks for staying late to finish that report, but if you started sooner you wouldn’t have had to) are worse than no reward at all, according to Gostick and Elton.

While the authors give a ballpark figure of $1,000 per employee per year for a reward budget figure, evidence from their research partners The Jackson Organization found that “from every angle, every financial metric, every way of looking at it, investing in recognizing excellence is strongly associated with the best financial performance.”