- Blog post
Employee recognition: Nonmonetary rewards are powerful but complicated
I recently heard an economist on the radio talking about gift-giving, which he called an “inefficient” practice. People constantly buy gifts that have “low utility” for recipients. Conclusion: The most efficient solution is to just give money.
My wife would see that as a total cop-out, proof that I don’t care enough to find her a meaningful gift. Spousal gift-giving clearly isn’t about efficiency.
But what about employee recognition? Surely you can’t go wrong giving employees money for a job well done, right? Actually, if your goal is to motivate your people, most employee recognition experts agree that the high-efficiency reward of cash is not the best way. You’ll get more mileage from nonmonetary rewards.
So if you’re a manager and you want to motivate an employee, you face pretty much the same problem I have with my wife. If I get exactly the right gift, I’m golden. But if I get the wrong gift, I’m worse off than if I’d given nothing at all.
Managers can’t take the easy route and reward employees with one-size-fits-all rewards like tickets to sporting events. Sure, the tickets will delight employees who love sports. But they’ll lay an egg with those who don’t. Even worse, they send exactly the wrong message. The non-sports lover thinks, “My boss just doesn’t get me.”
The good news is that there’s a way to increase the impact of non-monetary rewards. It’s as simple as listening to your employees. Knowing what that high performing employee values will let you pick just the right reward. It’s more work. You have to pay close attention to understand what motivates each of your employees.
But that’s not such a bad thing, is it?
photo credit: Nic’s events