As a CEO, one of your most important roles is being the cultural champion (see my earlier blog titled, unsurprisingly, “Being the Cultural Champion”), which involves reinforcing behaviour that aligns with the culture you’re trying to create.
Two of the most useful tools you can use to do that are recognition and reward.
The Gallup Institute found that employees who feel adequately recognised for their contributions to the company are 2.7 times more likely to be highly engaged at work, which leads to a 21% increase in productivity and a 59% reduction in turnover. Research from the Harvard Business Review shows that companies with strong recognition programmes have 31% lower voluntary turnover, demonstrating that employees are more loyal to the company. McKinsey has discovered that non-financial incentives, including recognition and praise, are often more effective in motivating employees than financial rewards. That’s because they tap into emotional drivers and provide intrinsic motivation.
Effective recognition and reward programmes
There are some recognised best practices when it comes to recognition and reward. The first of which is peer-to-peer recognition programmes. Google, for example, has implemented a “gThanks” peer recognition system, where employees can send each other public kudos, acknowledging each other’s contributions that align with the company’s Values. This approach democratises recognition and helps build connection and good feeling within the team.
The power of manager recognition
Manager recognition is powerful too, because it shows the team that their efforts are visible to and appreciated by leadership, strengthening the relationship between executives and the wider team. Zappos’ managers famously handed out “Wow!” cards to people that they felt went above and beyond in living the company’s Values, which could be redeemed for rewards like trips and experiences.
Aligning recognition and reward with company values
This alignment of recognition and reward with Values is crucial and well-demonstrated by Salesforce, who build all of their recognition programmes around their core Values of trust, customer success, innovation, and equality. Employees are rewarded when they demonstrate these Values, creating a direct connection between individual behaviour and organisational culture. At Singular, we combine these two concepts with financial reward through a monthly “Values Champion” award for the person who best demonstrates one or more of our Values — this is voted for by the previous winner, announced in our monthly kickoff meeting, and rewarded with a £100 Amazon voucher.
Keep it timely
While non-financial incentives are powerful, companies can show their commitment to their staff by providing recognition and reward simultaneously. Timeliness is also powerful, and Microsoft’s “Spot Awards” harness both of these factors, giving employees immediate financial awards for actions that align with company goals and Values. More substantial recognition and reward can be combined with these immediate feedback mechanisms to further reinforce and bolster engagement. Deloitte’s “Applause” programme, where top-performing employees are publicly recognised at an annual meeting and rewarded with both substantial financial bonuses and professional development opportunities, is a great example of these more formal initiatives.
Adopt a creative approaches
The examples above highlight the basics — if you’re serious about creating a brilliant culture, you should consider how to implement a version of these as a minimum. There are more creative ways to recognise and reward your team, too. Some great examples include:
- Airbnb: Offers employees the chance to stay at any Airbnb listing around the world as part of its “Travel Experience” programme, given to those who embody the company’s commitment to global community building and cultural exchange. Experiences can create stronger, longer-lasting memories and a deeper connection to the company than financial rewards.
- HubSpot: Regularly uses public recognition on social media to highlight the achievements of their team members, acknowledging the individual and showcasing their culture to the world.
- Spotify: Introduces “Thank You Days,” which are additional PTO for people who go above and beyond on projects or in service of the company’s goals. This initiative also reinforces their commitment to work-life balance and flexibility.
- Dropbox: Utilizes personalisation in their reward schemes, tailoring rewards to employees’ interests. Someone who loves music may receive concert tickets, while a fitness enthusiast might be given a wellness package. This kind of individual reward feels more thoughtful and meaningful than a standardised scheme.
- Patagonia: Awards model team members with recognition cards that allow them to donate to a charity of their choice on behalf of the company, which ties perfectly into their core Value of environmental and social responsibility.
Elevating culture with recognition and reward
Most CEOs don’t put enough effort into reward and recognition, relying on faint, inconsistent praise. If used well, though, they can help you to elevate and reinforce your culture, boost performance, and drive greater levels of retention. Many don’t require any financial investment, just a little thought. What can you put in place to make sure your team feels seen, valued, and recognised?
