What is the Difference Between Rewards and Recognition?

Feb 27, 2020

 

Oftentimes, I will hear about “rewards and recognition” programs. This would be perfectly okay if it weren’t for the fact that often when I dig into these programs, it’s often almost entirely rewards, perks and incentives based. 

This may seem like semantics, but trust me it’s not, and I’m not the only one who is worried about this. Here’s the challenge of using these terms interchangeably: we aren’t doing well enough to retain our top people in our current talent shortage because we’re not clear, strategic or intentional enough about either.

Don’t just take my word for it. Research backs this up:

• Year over year, data shows we put more emphasis on rewards than recognition (and the ways we’re rewarding is not what employees say they want or need the most)
• We often assume people are motivated by money when in fact research shows the association is very weak
• We often assume rewards are something for “others” to give out (external provider, HR, the CEO)
• If people do not feel valued and appreciated, you cannot throw money, swag or a new corporate program to fix the human connection issue

Here is another consideration. When economic times are tough – whether it’s the commodity you sell falls in value, you lose your biggest client, you cannot deliver on time because you cannot get enough talent in the door or you’re a not-for-profit without the luxury of a big perks budget – one of the first things to go is the rewards and compensation perks programs (in the cast of government-funded programs it’s sometimes legislatively cut). Believe me, I’ve done enough recognition program rebuilds to know the fallout of once valued programs that are now viewed bitterly (e.g., “we used to get 10% of all cost savings for a good idea and last year they pulled that so why bother?”) Not only that, a recession is inevitable; if people feel valued, heard and appreciated, they are more likely to ride the wave of uncertainty with you and understand if perks have to be cut back, but they won’t if perks are the only way they are shown they matter.

Now, this is not all doom and gloom! You know that’s not my style! What can you do about it? Here are a few evidence-based ideas:

1. Recognition First and Reward Second

Unless you have someone in the minority who says they want to be rewarded over being specifically and personally acknowledged (which you can learn by having people complete a Recognition Assessment), it’s best to recognize the person and their specific contribution in a personalized, timely and meaningful way first and foremost. When I deliver a recognition keynote and ask my audience members how they most want to be appreciated, 9 times out of 10 the first thing they say is “a thank-you”. As the old saying goes, the best things in life are free.

2. Make it Personal

Even if you are giving a reward, don’t make it about the reward, make it about the person and what earned the acknowledgement. Tell them why they are receiving the reward. Ideally, provide it in a timely fashion. And, make sure they care about the reward! For example, if you are giving a gift certificate, make sure they would use it. I had a boss only give out Starbucks gift cards, but half the staff worked in a town with no Starbucks (at the time…there’s probably one on every corner by now). They have a wallet full of gift cards they couldn’t use. A colleague of mine loved Kelsey’s but hadn’t been since her kids were born, so the team bought a card, called up her mom to arrange a sitter, booked the reservation, and announced Friday before she left for work, “Go get cleaned up your hubby is waiting to take you out and it’s on us.” She cried. Ugly beautiful prolific tears. It wasn’t about the gift card; it was about her peers knowing what she liked, knew she needed a night out, and making it easy for her to go (versus her saying she was too busy or tired and it sitting in a drawer until the kids left for college). 

3. Consider Your Audience

In addition to knowing your staff and colleagues’ preferences, if you give rewards, match it to the situation. Research shows in Canada that as long as you’re making $50,000 or more, a small reward like a Tim Horton’s gift card matters less as it doesn’t have as big an impact (someone making six figures doesn’t have to think twice about ordering that coffee but take off one zero and it’s very likely they may not be able to afford it.) Similarly, I did a recognition program rebuild for a global commodities organization and the folks in very isolated parts of the world loved their points program where they could order hard to acquire company swag, whereas someone working downtown Toronto could get a new water bottle in a few hours of ordering it from Amazon. 

When you think about some of these things in this article, how does your organization fair? Do you lean more toward the rewards and perks side or more toward to meaningful, authentic recognition side? What is working and what could be improved to boost engagement, retention and willingness to contribute improvements, ideas and discretionary effort? 

Want to talk this through a little further? Here is a link to jump into my calendar for a quick 15-minute strategy session. Always happy to help motivated passionate people-first leaders like you.

Want to check out more resources about how you can recognize other’s greatness? Check out these articles:

• How Do I Give Recognition That’s Sincere?
• Why We Don’t Recognize in Organizations (and how to change that!)
• 80+ Ways to Recognize Self and Others