Recognition & rewards: Why it pays to space them out over time

If you’re a forward-thinking organization, you’re probably already persuaded of the value of recognizing and rewarding meritorious employees. Demonstrated links exist between recognition/reward and employee engagement, which of course you want to foster and enhance.

There are some relatively easy ways to recognize and reward employees, and you’ve probably thought about some of them — annual awards, holiday bonuses, 10-, 20- and 30-year tenure awards (congratulations if you’ve got very many of the latter employees!), etc.

Trouble is, these easy ways aren’t necessarily the best ways. In fact, according to research cited by behavioral economist Dan Ariely in his book “The Upside of Irrationality,” they tend to fail for a very specific psychological reason.

From dreamy to old hat
That reason has a fancy scientific name — “hedonic adaptation.” What it means, in layman’s language, is that while people get a kick out of new and pleasant developments, they get used to the status quo relatively fast, and what seemed delightful for a short time becomes old hat. You’ve probably experienced this phenomenon after buying a new car or a new TV, or after you’ve revisited a dreamy vacation spot three or four times.

What does this have to do with employee recognition and rewards? It’s not hard to see that if you reward people only once a year — or even less frequently — the “shine” wears off and they’re back to attitudinal Square One long before you get around to recognizing them again. This means that a lot of the added motivation and engagement is likely to wear off, too.

So it’s pretty obvious that for recognition and reward to work effectively, you need to attend to them frequently. (You may already have heard that frequent recognition is a good thing, but the “hedonic adaptation” idea gives that suggestion more behavioral oomph.)

A new timetable
Instead of holding big annual recognition events, consider finding ways to recognize those who deserve it every month, or even every week. You don’t have to spend a lot of money doing this; sometimes just a hand-written “Thanks for doing a good job with X task” will work. And instead of, or in addition to, Christmas bonuses, you might consider monthly bonuses for those who meet specific performance criteria.

And don’t let yourself be lulled into thinking you’re pushing the recognition button frequently if, in employees’ eyes, you aren’t. Research from Bersin by Deloitte shows that the farther up the org chart you are, the more likely you are to delude yourself on this point.

According to Bersin, nearly 80% of senior leaders believe employees are recognized at least monthly, and 43% of such leaders believe they’re recognized at least weekly. By contrast, just 40% of the managers surveyed by Bersin believed employees were recognized at least monthly. And only 22% of employees said they and their peers were recognized this frequently.

One last point: You don’t have to go crazy with employee recognition and rewards. According to the Corporate Leadership Council study that we referenced at the beginning of this post, recognition/rewards is only one of several engagement levers a manager can pull. You might want to try to find out how long employees remember specific recognition/reward items — you could do a survey on the topic — and gauge your timing from that.