How to Use Incentives

The Carrot Factor: Incentives won't work unless managers understand how to use them.

This article was reprinted with permission from Human Resource Executive magazine.

The ability to recognize the power of incentives and harness their value doesn't come naturally to everyone. Certainly not to managers, as Adrian Gostick (communications director for a.c. Tanner Recognition Co.) and Chester Elton write in their new book, The 24-Carrot Manager (Gibbs, Smith). In the following excerpt, the authors discuss the most common misconceptions managers have about incentives and rewards.

Giving your first carrot to an employee might make you feel at bit out of place. And actually, that's good. It means you're gaining ground.

The truth is, most managers are seriously out of practice in presenting employee rewards and recognition. And that's too bad, because managers are the only ones who can. Research shows that people accept praise and direction significantly better from their immediate supervisor than from a senior leader who they may see a couple of times a month. Unfortunately, few managers clear time on their plate for recognition. When we consult with an organization, we typically ask: "What percent of your managers would you say effectively recognize and reward their people?" No matter the industry, most clients answer: "Probably between 10 and 20 percent."

To effectively manage people, you must give a piece of yourself. You must truly listen, encourage and be an important part of your employee's work experience.

Why don't more managers recognize their people? We hear a lot of reasons. Here are the most common:

  • I don't want to get too familiar with my employees. Some managers worry that if they are too supportive, too warm and fuzzy, it'll be hard to dispense discipline when needed, or employees will lose respect for them. Our typical response is: "Are you kidding? You think your people will really work harder for someone who is distant and aloof?" Research shows that people work best for managers who seem to care about them and are attentive to their needs. Our question: "Why was that research even necessary?"
  • What's in it for me? Some managers still wonder about the payoffs of rewards and recognition. According to the largest study ever conducted on workplace satisfaction, recognition and rewards are the core essentials
  • I don't have time.We don't doubt that managers are busy. But recognition should not take an inordinate amount of your time. The authors of this book each manage teams of six or more people; but we take time out to recognize employees because it leads to higher productivity, better workplaces, and, as corny as it sounds, it really is the right thing to do.
  • I don't want to play favorites. Some managers are worried about creating "fairhaired boys" on their teams or leaving someone out. Some managers decide instead to "recognize everyone" as a group. This is misguided leadership. These managers not only end up alienating the stars who make a difference but reinforcing the behavior of their average and poor performers. Instead of serving up mass-produced, generic-label carrots to your work group, try this: Put together a chart of all your people and recognize one person in each weekly staff meeting until you have publicly recognized them all. Don't just recognize for "overall greatness" (we'll talk more about this later) but for specific behaviors that are important to your organization. When you start recognizing you'll be amazed at how easy it is and how nobody feels left out.
  • They'll be suspicious of my motives. Some leaders who have tried recognition complain that one or two of their people think they are insincere when they offer praise or rewards. Often we find that they way recognition is handled is a large part of the problem. We taught the managers to make recognition events more timely, and to add specific praise with stories, and remarkably, the problem evaporated. In fact, there are ways to correct most recognition difficulties with the general ideas we give in this book. Still, we admit that of work teams that have high employee productivity, great customer satisfaction and low turnover. In other words, recognition and rewards are not just about corporate niceties. It's just about impossible to get great results without consistent, meaningful recognition.
  • The activity will lose meaning. We often ask managers this question: "Do you tell your wife you love her (your husband you love him)? The usually answer in the positive. We then say, "And you probably say it just about every day." They nod again. We then ask, "Why?" The managers typically say: "Because she (he) wants to hear it." And before the words are out of the managers' mouths, the light goes on. As employees, most of us can never receive enough sincere recognition. It never seems to lose meaning. there is a small percentage of the human race who refuse to be satisfied, no matter how sunny their boss may be treating them. As harsh as it sounds, at some point you must determine if these people are harming your efforts as a manger and if they really fit in with your team's culture.
  • They'll take advantage of me. Oh, brother. Next objection.
  • They'll ask for more money. Actually, just the opposite. According to workplace studies, employees who are satisfied and appreciated are less likely to keep asking for more money.
  • They'll expect more recognition. Yes, they will. Employees eat up carrots. When recognition is provided regularly, people will stick around a company for seconds - and thirds - all the while turning out increasingly better results. And this is a problem? The old saying, "You reap what you sow," is truer today than ever before. Give employees the recognition they want - and they'll produce the results you need.