There should be no doubt about the importance of recognition. Research from Bersin by Deloitte shows that companies with a ‘recognition-rich culture’ have 31% lower voluntary turnover rates. Yet getting employee recognition right, requires some very serious considerations.

Studies dating back to Herzberg in the sixties – and the data we analyse at Peakon today – show that exceptional work and sustained engagement comes from a good fit between jobs and intrinsic motivations. Introducing extrinsic factors – such as financial rewards – can be disruptive in these cases. Someone doing something great ‘just because they want to’ can find it off-putting when their actions are brought into a reward system external to their own motivation.

Another pitfall of rewards is creating a paternalistic culture. As Robert Leverling explains in his management classic A Great Place To Work, employees will quickly see paternalistic reward and gift giving as a control method and an affront to their dignity.

What’s needed then, is to reward achievements in a way that lets employees know their efforts are recognised, without spoiling the dynamics that lead to this effort, or creating an unhealthy relationship that belittles people. Thankfully, this is perhaps even easier to do without spending vast sums of money, than it is when rolling out bonus schemes.

Who, when, and what to reward

As they say about great comedy – it’s all about timing. In this regard, formalised reward programmes have a bad history. A glass award for something you did a whole business quarter ago, being delivered by internal mail rather than by your manager, shows that nobody really cares – other than perhaps the person in HR who’s been given the task of administering an award programme.

If great work has been done in the last week or so, then recognition should come from the team’s leader then and there. Praise and rewards should come with a clear explanation of why that work advances the team’s progress in an exceptional way. It’s more than likely the employee knows this already, but it helps to show that this recognition is based on a level of objectivity – helping meet predefined goals.

An entirely subjective award can lead to an air of paternalism, as mentioned above. If as a manager you consistently plan poorly, dump last-minute work on people’s desks, and then reward them for all their late nights to get it done, it will be very clear that the reward is an attempt to pacify the employee who’s had their evenings ruined. This sets the tone that work is being done for the manager, rather than the company as a whole – which is pretty much the fastest way to make an employee want to quit!

Peer-to-peer recognition is often even more effective at motivating employees, because those we work with on a day-to-day basis know what we consider to be a real achievement – something we’re proud of, that’s taken a lot of effort to accomplish.

Ideas for low-cost rewards that people actually want

By far the most essential reward is not really a reward at all – more like common manners that in fast-paced environments we sometimes forget – and that’s to regularly say a sincere “thank you” and “well done”. The Bersin research into ‘recognition-rich cultures’ (mentioned above), found they were not based on big bonus schemes, employees simply knew that their work was being noticed by their colleagues and managers.

The principle of all recognition is showing that you care, so it’s essential that any rewards given show that you care enough to know what someone would really like. We’ve all had Christmas gifts we don’t want and actually dislike because it seems the giver had no idea what we’d appreciate, they just knew they should give us something.

In that sense generalised advice – other than saying thank you – can be unhelpful, but here are a few thoughts that could spark your imagination:

• Does someone have a love for a particular wine, or a certain craft beer? Arriving at their desk on a Friday afternoon to say thanks with a good bottle of something you know they really like, is always better than a more expensive gift they won’t care for.
• Is someone’s favourite band or artist on tour? How about asking if they’d like a couple of tickets to see them as a way of saying thanks? Similarly, if there’s a hard-to-get-tickets-for conference coming up, you could ask if they’d like to go and tell them you’ll arrange it for them.
• Perhaps you’ve got an employee who’s a keen cook, or learning to play guitar. You could gift them lessons with an instructor to help them get more from their hobby.
• You could also take your team out for lunch and explain that this is in recognition for the employee’s outstanding achievement – and as a team, everyone should enjoy a good restuarant in return.

As you’ll notice, all of these suggestions require a level of closeness with your employees. Beyond any particular gesture, this is perhaps the best recognition of all – showing that you value them for their contribution, but also as people who you enjoy spending time with.