Presents:

1
Presents
The Psychology of Reward Behavior

• System requirements
• Google Chrome
• Firefox
• Safari
• Internet Explorer2

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What is Employee Recognition?

• Employee Recognition is
• the timely acknowledgement of a person's
  behavior, effort, or business result that
  supports the organization's goals and values,
  that has clearly exceeded normal expectations.

3
The Big Wave Effect
Appreciation is a fundamental human need.

• When companies establish and maintain recognition
  programs, it has a significant value to all
  employees. Even those who may not be recognized
  in a given campaign are most likely motivated to
  better their individual performance, thus raising
  the fortunes of the company.

4
Employees Want
and Need Recognition

• 79 of employees who quit their jobs cite a lack
  of appreciation as a reason for leaving1
• Establishes the employees value is understood
• Gives the employee's work meaning
• Boosts employees self esteem
• Gives "behind the scenes" workers a chance to
  shine
• Prevents psychological distress
• Provides a sense of belonging within the company
• Serves as motivation!

Study by Georgia Institute of Technology corporat
e award winners had 37 more sales growth and 44
higher stock price return2
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Freud and McGregor on Motivation

• Sigmund Freud's Theory X
• Assumes people
• Are lazy and lack ambition
• Avoid work at all costs
• Put forth minimum effort in all situations
• Douglas McGregor's Theory Y
• Assumes people
• Have the best motives
• Are internally motivated
• Work for themselves
• Not for reward or punishment (carrot or stick)

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Motivating Employees

• Abraham Moslow's Hierarchy of Needs
• Defines basic human needs in order of importance

These needs must be met in order from the bottom
upwards
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Recognition Is a Win/Win Situation!

• Companies also benefit when they recognize their
  employees!

Individual Performance
Loyalty toward Company
Belief in Company Values
Recognition
Increased Satisfaction
Increased Productivity
Reduced Turnover
Increased Company Value
COMPANY WIN
CUSTOMER WIN
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Employee Recognition Approaches

• Ethical - Acknowledgment is a question of
  dignity and social justice
• Recognition ceremony for employee leaving job
• Psychodynamic - Rewards symbolize acknowledgement
  of the work produced, effort put forth and
  gratitude
• Award given to maintenance employee for 15 years
  of service
• Humanistic - Approval of employees character and
  existence
• Award given at annual recognition ceremony for
  best team leader
• Behavioral - Rewards control behavior, especially
  when results are the subject of recognition
• Yearly Exceptional Sales Achievement Award given
  for employee with highest sales

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Employee
Recognition Interaction

• Employees can be recognized in 5 ways
• Organizational - Programs and Policies
• Awards for working efficiently as a team
• Vertical - Manager to Employee, Employee to
  Manager
• Publicly thanking/awarding employees
• Horizontal - Peer to Peer
• Employees purchasing award to commemorate a
  career milestone
• External - Client to Employee
• Client provides employee with other possible
  clients
• Social - Company to Community, Community to
  Company
• Company dedicates new recreation center to small
  community

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• Walt Disney World Resorts established an employee
  recognition program that resulted in a 15
  increase in staff satisfaction as measured by
  their day to day interaction with their immediate
  supervisors. these results correlated directly
  with high guest satisfaction scores, which showed
  a strong intent to return to the resort and
  therefore directly related to increased company
  profits.3

Sears determined that for every 5 increase in
employee attitude tests, they were able to
measure a 1-3 increase in customer satisfaction
and a .5 increase in revenue.4
The US Department of Labor estimates that the
cost of extremely negative or 'actively
disengaged' workers costs the US about 10 of
annual GDP.5
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Why Cash Doesn't Work

• Created by the RSA (Royal Society for the
  encouragement of Arts, Manufactures and Commerce)
• via YouTube6

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Cash Is Invisible

• "Extrinsic motivators in the workplace are not
  only
• ineffective but often positively
  counterproductive.
• Extrinsic factors eat away at intrinsic
  motivation. The
• more closely we tie compensation to
  performance the
• more damage we do."7
• examples of intrinsic motivators in the workplace
  are achievement, recognition, responsibility and
  advancement
• If a company pays competitively, cash rewards
• become irrelevant.
• Anything short of 1000 raise is easily
  forgotten.1
• Salary increases are private while awards are
  public.
• Cash is an expected right, awards are unexpected
  gifts.
• Awards can be seen daily by the awardee and their
  coworkers.

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Why Cash Doesn't Work

• Created by the RSA (Royal Society for the
  encouragement of Arts, Manufactures and Commerce)
• via YouTube6

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Cash Is Invisible

• Studies show recognition of results through
• monetary items has little effect on employees
• performance in the medium and long terms.8
• After 3 months 1 in 5 employees will not know how
  much their cash incentive was.1
• Salary increases are private while awards are
  public.
• Cash is an expected right, awards are unexpected
  gifts.
• Awards can be seen daily by the recipient and
  their coworkers.

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Why Cash Doesn't Work

• Created by the RSA (Royal Society for the
  encouragement of Arts, Manufactures and Commerce)
• via YouTube6

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Where The Money Goes

• 300 Employees
• Planned Salary Increase
• .50 per hour
• Add Mandated Costs
• .065 per hour
• 4.52 per day per employee
• 22.60 per week per employee
• 1175.20 per year employee per
• 352,560.00 total expense per year

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Where Rewards Begin

• 352,560.00 total expense per year
• Average award cost 100.00
• Recognize 25 of total workforce
• Awards per quarter 7500.00
• Total annual awards expense 30,000.00
• Total savings 322,560.00
• If your key employees are not
• Recognized appreciated, they
• will be
• YOUR COMPETITORS
• KEY EMPLOYEES.

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Cost Benefit Analysis of Award Programs

• Benefits
• increased productivitygreater employee
  satisfaction means more time focusing on job and
  less time complaining
• higher loyalty
• lower employee turnover
• reduction in absenteeism and work related stress
• reduction in work related accidents
• better safety records

• Costs
• award cost
• cost to create program
• cost to implement program

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Examples of Awards

• Retirement Recognition
• Quota Achievement
• Budget Performance Awards
• Service Awards
• Distributor and Supplier Recognition
• Appreciation Awards
• Promotion Recognition
• Completion of Training Awards

• Management Recognition
• Monthly Awards
• Years of Service Recognition
• Sponsor Recognition
• Memorial Awards
• Contribution Recognition
• Performance Awards
• Productivity and Quality Recognition

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References

1. Gostick, Adrian Robert., and Chester Elton. The
   Carrot Principle How the Best Managers Use
   Recognition to Engage Their People, Retain
   Talent, and Accelerate Performance. New York, NY
   Free, 2009. Print.
2. Zahorsky, Darrell. "The Strategic Value of
   Corporate Awards." The American Business Awards
   The Value of Corporate Awards. American Business
   Awards. Web. 25 May 2012. lthttp//www.stevieawards
   .com/pubs/general/72_194_8831.cfmgt.
3. "The Power of Recognition." The George Washington
   University. The George Washington University.
   Web. 25 May 2012. lthttp//www.gwu.edu/hr/images/do
   cuments/Recognition_training.pdfgt.
4. Harrison, Kim. "Why Employee Recognition Is so
   Important." CuttingEdgePR.com. Cutting Edge PR.
   Web. 25 May 2012. lthttp//www.cuttingedgepr.com/ar
   ticles/emprecog_so_important.aspgt.
5. Rath, Tom, and Donald O. Clifton. How Full Is
   Your Bucket? Positive Strategies for Work and
   Life. New York Gallup, 2004. Print.
6. "RSA Animate - Drive." YouTube. (RSA) Royal
   Society for the Encouragement of Arts,
   Manufactures and Commerce, 01 Apr. 2010. Web. 25
   May 2012. lthttp//www.youtube.com/watch?vu6XAPnuF
   jJcgt.
7. Behn, Robert D. "Motivating Without Rewards A
   Challenge to Public Managers." Governing May
   1994 86. LexisNexis Academic. Web. 25 May 2012.
8. Brun, Jean-Pierre, and Ninon Dugas. "An Analysis
   of Employee Recognition Perspectives on Human
   Resources Practices." International Journal of
   Human Resource Management 19.4 (2008) 716-30.
   Business Source Complete. Web. 25 May 2012.

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