Related Posts Plugin for WordPress, Blogger...

Sunday, January 21, 2007

Performance Management Part 5: Rewarding and Recognizing Good Performance

Rewarding and Recognizing Good Performance

Ah, finally, the last of the series on this topic! I have been so attached to this topic for so many weeks, the thought that this is about to end, brings tears in my eyes. That is because I still can’t make up my mind what the next topic would be! J

As I have mentioned in previous issues, if this is your first time to view this article, I suggest that you also check out the four previous articles in order to make sense of some of the things I say here.

Having worked in HRD for a good number of years taught me a few lessons on the do’s and don’ts of rewarding and recognizing good performance. The first lesson is…

Reward and Recognize Good Performance!

It seems obvious and makes good business sense but I can bet that the number of companies here in the Philippines that appropriately reward and recognize good performance is a minority compared to those who don’t. I don’t know, maybe it’s the economy or something but some companies can’t seem to figure out a way to establish a decent rewards and recognition program. Please don’t get me wrong here. Rewards and recognition is not synonymous to salaries, although some companies give salary adjustments as a form of reward. I’d like to talk about that too but let me do it later. Companies who do not formulate a rewards and recognition scheme are missing out on the potentials of employees to perform beyond the expected. One excuse may be because they can’t afford it. I’d say that the reason why they can’t afford it is maybe because they don’t have a rewards and recognition program! A good rewards system encourages people to perform beyond expectation. If your program is properly designed, it should lead to better production, higher sales, higher satisfaction levels from clients, lower cost and hence, higher profitability! Aha! There’s your money!

I believe that the current economy in the Philippines has kept many of the workers at the lower rung of Maslow’s hierarchy of needs namely physical and security needs. Having said that, I also believe that the idea of additional income brought about by rewarding performance over and above expectation fulfills a great deal of these needs. I must also say however that money is not the sole source of motivation. Some of the Herzberg believers out there would even argue that money is not a motivator, but I am not in the mood to argue with that right now, so let me just go back to what I was saying. A good rewards and recognition program must also fulfill people’s higher needs like esteem and actualization. It must allow them to feel good about their accomplishments and see the potentials of a better career out of it. I’ll talk more about that in a little while.

Be Careful what you Reward and Recognize

Giving rewards or recognition for the wrong reason or focus is dangerous. Clear example: Give an incentive for punctuality but do not give reward for exceeding productivity targets and you’ll end up with employees who come to work early but do no work. Reward individual performance without considering the need of the team members to support or work with each other and you’ll end up with ugly competition where people stake claim for other people’s performance. In a sales company, a client called in looking for the agent who has been working on this account for some time. The agent is in the restroom so the other agent asked to assist the client. The client told the story and said that he is ready to avail of the service. The substitute agent closed the sale, but reported that it is his sale and not the other agent’s. On the other hand, rewarding team performance without considering individual contribution and you’ll end up rewarding freeloaders and frustrating the hard workers. Reward the effort and not the result and you’ll end up with having people getting rewarded for trying hard without delivering the results (and believe me, there’s just too many of this around).

The key to a successful rewards program is to ensure that it is focused enough. I have nothing against rewarding and recognizing efforts like punctuality and other behaviors that demonstrate dedication and professionalism. I think it’s a good idea. There is however a need to put more weight on delivering results because these bring food to the table. An employee came to me one day to complain about not getting a salary increase. She said that she’s been working very hard and have in fact spent more time at work than she’s supposed to. I asked her about how she performed against her targets. She said that she didn’t meet half of her objectives but it’s not for lack effort. I asked her, if she cooked some fried bananas and try to sell it for a whole day and end up selling nothing at the end of the day, would she have more money? The answer of course is no. Others would argue that, well since it is not their fault that result is poor, they shouldn’t be penalized for it. I would respond by saying it would be foolish to penalize the company for the failure of the individuals in the organization to deliver results.

Reward Fairly.

I apologize in advance if some people are offended by the bluntness of what I’m going to say next… Some owners of companies find it hard to part with their money that they give pittance and not reward. Employees are smart, they went to school too. They know when the reward for their performance is not fairly given. This is a motivational dumper. And some managers wonder why their rewards system doesn’t work.

Be Creative.

Rewarding and recognizing good performance do not have to be financial or expensive. A lot of times, you just need to be creative and aware of what will boost people’s morale. Here are some of the creative rewards and recognitions that I’ve seen and implemented in the past:
Public Recognition (Bulletin board, company news letter, etc)
Formal recognition (certificate or letter of commendation)
Free movie tickets
Group dinner (with or without an important company officer)
Getting a priority seat in a company sponsored training
Merit points that are convertible to some small house appliances.
6 months membership to a health club or gym

Speaking of creativity, I remember a company that gave rewards for best suggestions. At first people are excited to join the contest. They brought in so many suggestions, in time however, the number of suggestions declined. Why, is it because they ran out of ideas? No, its because they saw that none of the new ideas are being implemented, even the best ones. As I said, its not always about the money.

Salary Adjustment is the Most Frustrating form of Reward.

This is true. Human beings are the most inconsistent creature in this world. You put oil in a machine and you’ll see improvement in performance. For most things on earth, you do something and you can expect things to follow. For most things that is, but not for humans. You give salary adjustment and then hope that at least the performance level would be maintained but that is not always the case. So, what can I suggest? I suggest that you give salary adjustment not only for the sole reason of recognizing performance. Give salary adjustment because the person’s competency has improved and that the person’s market value has increased. The problem with this concept is that it entails reviewing your current performance management system and salary administration policy and making necessary adjustments to it. It’s a lot of work and will entail changing the tradition in pay adjustments in some companies. There will be some discomfort but I think making the adjustments will help make your performance management system more objective in giving of salary adjustments.

In the end I’d like to say that rewarding and recognizing performance should not be limited to the end of each appraisal season. There should be away to recognize and reward performance almost instantaneously and focused on specific performance criteria that are based on delivery of results like, more sales, more production, lower cost, repeat business etc. That doesn’t mean however that the company should ignore punctuality, helpfulness and other positive behaviors that contribute to team success. Rewarding and recognizing is a little bit trickier than just handing them out whenever you think appropriate. Serious consideration must be given regarding their appropriateness and fairness.

One other thing… I just noticed that this subject of performance management mostly interest HR practitioners. Line managers who are supposed to use this as a tool for managing employees performance see it as a chore that has to be done because HRD instructed them to do so or because some salaries need to be adjusted. They don’t seem to have a full appreciation of this tool. The reason I would guess is lack of familiarity. If you are interested in educating your managers on the subject of Performance Management and you need help, please don’t hesitate to give me a ring. (SMART: 639205044521, GLOBE: 639279717528)

I hope that the series of articles I shared regarding the subject of Performance Management helped you in taking a fresh look at your system and helped you made some decisions to make adjustments. I will only be too happy to hear if any of the things I said here helped you in anyway. Please do come back as I do not intend to stop speaking my mind out regarding the matters of HR.

See you next post!

No comments:

Post a Comment

If you have an opinion about this topic or a related experience you want to share, please feel free to leave a comment but please be respectful. No bad words please or I will be constrained to delete it.