Recognizing Employees Take a Lot More Than Just a Paycheck

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In all the news and research feeds I follow, occasionally the author of an article or post will phrase his comments in a way that leaves me thinking, “I wish I’d written that myself.”

One such statement comes from Jay Forte on the Human Capitalist blog:

You don’t pay your employees to do a job. You pay them to think about and deliver the best, most efficient and most profitable response in each moment. The better aligned they are to jobs that fit their abilities — roles that let them do what they do best — the better their decisions and the greater their performance. Job fit, or the right talent for the right job, drives success. Talent makes or breaks an organization.”

Jay drives home why a favored phrase of lazy managers – “I don’t need to recognize employees; That’s what I pay them for” – is so wrong.

1. Assessing job fit

This belief of lazy managers ignores the importance of job fit. The question remains – How do you make sure you have the right talent in the right job? How do you know for sure employees are truly delivering their best?

Sure, the obvious answer is the performance review, but I think we’d all agree the way in which the annual review is usually implemented is flawed at best. Besides, you need employees “deliver[ing] the best, most efficient and most profitable response in each moment” – this moment, right now.

That’s what makes social recognition the most powerful tool in the HR tool kit to assess job fit in real time.

In an environment where all employees are empowered and encouraged to recognize others for exceptional work in the moment, managers and HR leadership have exponentially more data points to better infer which employees are in roles where they are having a differentiating impact on their colleagues, the team, the customers or the company.

At the very least, HR has more information on a more regular basis to start to ask important questions.

2. Valuing employees with more than a paycheck

Critically, if all you’re doing is paying employees to do a job (and relying on standard merit increases as a primary reward mechanism or doing so), you’re not really valuing your employees at all.

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Looking at recent data, 2 percent and 3 percent are the most common budgeted pay raises this year in the UK. In November, SHRM projected that U.S. salary increase budgets for 2014 would remain at 3 percent, too.

Yet, the rate of inflation in the UK is hovering between 1.6 percent and 2 percent. And, the rate of inflation in the U.S. is holding steady around 2 percent as well. Merit increases today barely keep up with the cost of living.

Talent needs to be recognized – and rewarded

If we do, indeed, believe that “talent makes or breaks an organization” (and I certainly do), then talent needs to be recognized and rewarded for the great work they do beyond their pay check alone.

Great work deserves great acknowledgment – from everyone and available to everyone.

What do you pay your employees to do?

This was originally published at the Compensation Café blog, where you can find a daily dose of caffeinated conversation on everything compensation.

Derek Irvine is one of the world’s foremost experts on employee recognition and engagement, helping business leaders set a higher vision and ambition for their company culture. As the Vice President of Client Strategy and Consulting at Globoforce, Derek helps clients — including some of world’s most admired companies such as Proctor and Gamble, Intuit, KPMG, and Thomson Reuters — leverage recognition strategies and best practices to better manage company culture, elevate employee engagement, increase retention, and improve the bottom line. He's also a renowned speaker and co-author of Winning with a Culture of Recognition. Contact him at irvine@globoforce.com.

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2 Comments on “Recognizing Employees Take a Lot More Than Just a Paycheck

  1. Derek – I like this article a lot! It is simple and gets to the point that most employees want more then a paycheck to get out of bed every morning. I worked for a company where some of the leadership team made comments similar to “Why should I recognize employees for doing their jobs” and this is an example of the problem. We need to pay our employees fairly, which will allow them to like their jobs. But, just by providing recognition for a job well done (which is typically free) can vastly improve their work life and overall employee retention.

  2. A paycheck will get most people out of bed, but it won’t get them to stay late, come in early, or tackle extra projects outside of their normal scope. When someone does go above and beyond be sure to recognize that as soon as you see it! That helps encourage positive behaviors

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