Don’t Judge Strategic Recognition Programs by Attendance Award Results

As long-time readers of this blog know, I like to stay on top of the latest research and news in the employee recognition, rewards, engagement and motivation industries (and there is quite a good bit of it).

And I’m glad I do, because research like this out of Harvard Business School proves the point of a narrow focus being used to paint results much too broadly.

The research working paper is titled The Dirty Laundry of Employee Award Programs: Evidence from the Field. Here’s the abstract:

Many scholars and practitioners have recently argued that corporate awards are a “free” way to motivate employees. We use field data from an attendance award program implemented at one of five industrial laundry plants to show that awards can carry significant spillover costs and may be less effective at motivating employees than the literature suggests.

Our quasi-experimental setting shows that two types of unintended consequences limit gains from the reward program. First, employees strategically game the program, improving timeliness only when eligible for the award, and call in sick to retain eligibility. Second, employees with perfect pre-program attendance or high productivity suffered a 6-8 percent productivity decrease after program introduction, suggesting they were demotivated by awards for good behavior they already exhibited.

Overall, our results suggest the award program decreased plant productivity by 1.4 percent, and that positive effects from awards are accompanied by more complex employee responses that limit program effectiveness.”

Why attendance award programs should die

So what’s the problem? One attendance award program at one laundry plant does not a proof case on employee recognition make.

I’m already on record in agreement with this paper on why attendance award programs are bad. At the very least, you’re merely encouraging “presenteeism” with sick workers spreading their germs among colleagues. Can we all just agree that perfect attendance programs deserve to die an ignoble death?

A bigger challenge in the report is the idea that employees were demotivated by awards for good behavior they already exhibited. In the (extremely) limited example of how this research was implemented, this is a reasonable conclusion. In the case of a truly strategic recognition program, however, such a conclusion cannot be drawn. Why?

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Strategic recognition is not at all about a contest or recognizing a few “winners” out of the many who exhibit desired behaviors. No, strategic recognition is designed such that all people who demonstrate desired actions, behaviors and results are recognized and appropriately rewarded for doing so – by their peers and managers alike. There is no reason to game the system as the system itself is designed appropriately for recognition, not incentives.

Again, my caution to you when reading research is to thoroughly understand the parameters of what the research studied before taking any results at face value.

You can find more from Derek Irvine on his Recognize This! blog.

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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