I walked into my MD’s office, prepared and ready to discuss a recognition program that I wanted to put into place. I got through about two minutes of my presentation and they interrupted me to say - “Isn’t recognition the same as incentives? Why should I spend time and money on recognition if I’m already paying my people incentives?”
When I picked my jaw up off of the floor, surprised to hear this reaction, I calmly explained why they were not the same thing, and why we absolutely positively needed both.
I shared this story recently in a talk I gave about recognition, so thought I’d share it in this blog along with how I got my MD to change their mind and agree to put in place a recognition program. I hope you never find yourself in this situation. But should you, you may want to refer to this explanation of the four key differences to help you overcome these challenges.
1. Different expectations
The starting point is to explain the differences between the two regarding employee expectations. With incentives, which some people refer to as a carrot-and-stick approach, there are specific expectations. You dangle a carrot on a stick out to people to do something - sell a product, hit a milestone, etc. - and you get a reward in return. By doing this, you’re setting an expectation with your people - e.g., when I do x, I will receive a reward.
On the other hand, there are no real expectations when it comes to recognition as there is no carrot and stick. Yes, employees know that if they do a good job, they may be recognized, but it’s not expected - e.g. I do x, and I may or may not receive a reward.
2. Different motivations
Another difference concerns the motivations behind each. For example, how will they motivate my people to perform? For incentives, the motivation is extrinsic, as what motivates your people to perform is external, the reward.
The motivation to perform when it comes to recognition is very different, this time intrinsic. Employees are not motivated by what they could receive but by their internal motivation and drive to perform and succeed.
3. Different purposes
Next, there are differences in the purposes of each and what they ultimately reward. Incentives are used to reward employees for work that is done in a linear, one-dimensional, or straightforward way—e.g., you have a specific goal (carrot) to achieve in a very specific and defined way. Only then will you receive the reward.
On the other hand, recognition is used as a way to reward employees for both what they did and how they did it, often not aligned with a specified way to do so. For example, you recognize someone for taking the initiative to come up with a new idea for the company (recognizing the what), you recognize someone for living one of your values by supporting a colleague (recognizing the how), etc. In addition, when recognition is done well, it rewards employees at times when they may not have hit a specific goal. For example, you recognize a salesperson for going above and beyond to try to win a new sale they did not get because of reasons outside of their control. With incentives, this would not happen.
4. Different timelines
And finally, there are differences in the timelines and impacts associated with each. For incentives, as Daniel Pink says in his fantastic book Drive:
Incentives “can deliver a short-term boost - just as a jolt of caffeine can keep you cranking for a few more hours. But the effect wears off - and, worse, can reduce a person’s longer-term motivation to continue the project.”
Recognition often has a more long-term impact due to its nature. When someone recognizes you, you feel seen, valued, and appreciated, and the feeling lasts longer since it touches you in multiple and different ways. With incentives, yes, you feel great, but it’s for one thing: achieving a specific goal.
Here is a summary of the key differences shared in this blog:
Let me end by saying that both of these tools and programs can help you motivate and reward your people. The key, the magic, is to use them together in the most meaningful and effective way. All the best, go out there and motivate, appreciate, and reward your people for all the great things they’re doing and achieving!
Please contact me if you'd like to discuss how you can create innovative and effective reward and recognition programs at your company.
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