Christopher L. Williams, CLWill.com - Scale Your Organization

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Are employee awards a good idea?

Employee Award

When the discussion of how to compensate and reward employees comes up, almost invariably someone comes up with the idea of the “employee of the month” award.  Sometimes the name of the award is less tired, maybe it’s outstanding associate of the year.  Or the top achiever of the quarter.  It doesn’t matter what you call them, these kind of awards are a bad idea.

Every time I tell people not to fall for this easy trap in the employee compensation world, they object.  They complain that I’m harping on them all the time to think of ways to reward employees that don’t involve money.  They say: “here’s a great way to reward people for good performance, it’s cheap, what more could you want?”  And there are hundreds of companies that proclaim to make “tools to motivate employees” who push this junk (here’s a link to one).

For the first clue as to what’s wrong with these kind of awards, walk into your local fast-food joint, distribution company, or supermarket.  There, over in the corner, you’ll see it.  The dusty brown frame with little brass name plates, and maybe faded photos taken from employee badges.  The employee of the month award plaque.  Look carefully.  What’s the most recent date?  If you’re lucky it will only be six months ago.  I’ve seen some as old as three years, with not an update since.  I don’t think I’ve ever seen one with more than ten months on it.

It’s hard to keep up the momentum with these things.

The first and most obvious problem is that it’s hard to keep up the momentum with these things.  With all the things you have to do to run a business every month, this inevitably falls to the bottom of the list.  So for a couple of months you wrestle with it to get it done at the last minute, then you find yourself a month or two behind, finally it just falls by the wayside.  What a message this sends to the employees: you can’t even find time for this simple little form of recognition.

Employee of the Month
Employee of the Month

Another problem is also obvious.  Look closely at that plaque.  See any patterns?  Yes, you see the same couple of employees over and over again.  And why is that?  Because you really only have two choices when awarding these things: 1) be honest and give it to the best employees, or 2) rotate it around and give it to everyone once.  In the first case, the same few employees will consistently rise to the top.  In the other case, the award becomes a joke to the employees.  Which is why it’s always done the first way.  And the pattern is inevitable.  What a wonderful message it sends to your employees, that only a handful of them are worth recognition.

Which brings us around to the effect of these awards on the employees.  Does it really reward the winner?  Or do they feel awkward for being singled out in this beauty contest that really doesn’t mean anything?  They know there is no money in it, they know the choice wasn’t really objective (more on that later), and they know you’re not recognizing them because you want to, but because it’s the end of the month and someone has to get the silly thing.  They also know they are either going to get a lot of grief from their friends for winning it, or a bunch of resentment from others who didn’t.  So they sheepishly accept it, and the flaccid applause of the folks gathered in the lunch room, and go back to work.

More often than not, they feel like…  losers.

What do the non-winners (the other 99% of the employees) think about it?  More often than not, they feel like…  losers.  To make themselves feel less like losers, they badmouth the award, and tell everyone that only idiots and suckups get it.  And they probably give the winner a hard time for winning it.  They certainly don’t say to themselves: “gee how do I get one of those?”

Which brings me around to the final point: how do you make this decision?  If the choice is truly objective (top sales, lowest complaints, etc.) you need to resign yourself to the fact that you have no control over the award.  And constant repeat winners are inevitable.  And the losers, who already know they are losers, certainly don’t need this award to rub their noses into it.

Or, you can make the award be more subjective: “most eager”, “best team player”, or maybe “best overall”.  This puts you back in control, but then it introduces a number of problems.  Like accusations of favoritism.  Or having it seem arbitrary.  Or second-guessing from all corners about why you chose who you did that make a baseball argument look like a picnic.  Ugh…

The more you think about employee awards, the less you’ll think they are a good idea.  I have a number of thoughts on better ways to reward and recognize your employees.  Stay tuned to CLWill.com for more.

Posted in HR Policy | Last updated September 11, 2006.

Actions Speak Louder than Signs

Macy's Logo

I found that I had to buy a mattress today.  What fun.  After a wonderful shopping experience at a number of discount places that didn’t have what I wanted, but whose employees sure had plenty of attitude, I ended up back where I started: Macy*s — part of the Federated stores.

Buying a mattress is not a difficult task, but apparently selling me one is.  Especially if you want one right away.

Yes, I really want it today.  I’m driving a truck, and I need the mattress now, so, yes, I want one that’s in stock, and yes, I’ll drive to wherever your warehouse is to get it.  I know that’s not what you normally do, but I’m sure it’s a reasonable request.

You’re going to charge me $20 to pick it up?  Please, I understand delivery charges, but I have to pay you to let me drive to the middle of nowhere, deal with your surly warehouse person, and load it into my own truck while he stands and watches?  Oh…  my…  god…

But that’s not really the point.  As I went to buy the mattress, I needed to use the restroom, which is conveniently next to the employee break room.  I love these places.  There is no better place to understand a company’s culture than the break room.  Not only do you get to see employees when they are not “on stage”, but you also get to see all the silly things companies post for their employees’ eyes only.  Some day I’m going to do a book of photo essays on break rooms…

There is no better place to understand a company’s culture than the break room.

Macy*s break room did not disappoint.  Like many big company break rooms there is a bulletin board with all kinds of things posted: the obligatory EEOC and other government notices, tired handwritten signs about not leaving food around, and notices about company meetings that happened two months ago.  There were also very high quality signs from HR that advertised 800-numbers to call for issues or questions, and a number of employee signs selling various household items.  Nothing special here.

Best of all, however, were two huge (1′ by 3′) signs high on the walls, in bright Macy*s red and black.  One said “TEAM WINS”, a sentiment that I found later was plastered all over the warehouse as well.  I’m not sure if that means “let’s rack up some wins as a team” or “being a team is a winning strategy”.  I’m sure someone knows, but not many care.

The other huge sign said “YOU COUNT”.  Beyond the wishful thinking of the HR person who created that sign, I’m not sure at all what this one meant.  Yes, I know what it means: you are valuable, you make a difference.  But I’m not sure if that means anything to anyone at Macy*s.  The employees surely decide whether they count more by the company’s actions than by a big sign in the break room.

The employees surely decide whether they count.

I went back to finalize the purchase, and found two people huddled around a computer terminal, trying in vain to get the system to complete the sale.  My zip code was recently changed, and the system kept telling them “cannot deliver to that zip code”.  But remember, I was picking it up, no delivery was involved.  Doesn’t matter…  the system wouldn’t complete the sale with that zip code.  And it wouldn’t accept my old zip code, because that didn’t match the city anymore.  After 15 minutes, and two more people offering advice, they finally ended up moving me to the address of the warehouse, and were able to complete the sale.  Let’s just hope the mattress doesn’t get recalled and they send the notice to their warehouse.

I’m sure the employees struggling with the ancient computer system would much rather have had the company focus on new computers than on signs for the break room.  And I know that, as the team of them struggled to conquer the lame system, not one of them felt like they “counted” to Federated.  I’m confident they were frustrated and dreaming of greener pastures elsewhere.  So much for fancy signs in the break room…

Posted in Org. Culture | Comments Off

Going Postal

USPS Logo

I needed some stamps and stopped into the post office today.  Miracle of miracles, there was no line.  At the counter she tells me “these new stamps have the ‘39 cents’ on them now.”  OK, I admit, I’m not strong enough to let that one pass: “well that ought to be good for a few weeks,” I said.  Those were the last words I got out in the next five minutes.

She gave me a history of stamp price increases in the last five years, a diatribe on GWBush’s stance on postal pensions, and a prediction on the future of the postal service’s finances.  The line behind me began to form; I simply wanted to buy two rolls of stamps.  It became increasingly uncomfortable.

Most companies don’t think enough about the messages their people are giving to their customers.

Of course, the post office is where the term “going postal” originated, and like most stereotypes, it’s based in some elements of truth.  No, I didn’t expect her to whip out an uzi and start sawing us down, but it got me thinking about the messages all team members send to the outside world.

Most companies don’t think enough about the subtle (or even blatant, as above) messages their front-line people are giving to their customers.  Do the people touching their customers understand the vision for the company?  Do they agree with it?  Do they actively support it and work toward it?

Five uncomfortable minutes in the post office had me wondering what life was like well behind the counter, and in the lunch room.  From this quick encounter, I know I wouldn’t want to work there, and if given the choice, I wouldn’t shop there.  Are your people having the same effect?

Posted in Org. Culture | Comments Off