What is A Reward

More importantly, What Rewards Do You Control

When you first become a manager, you will find yourself in situations where you have to determine whether to use the carrot or the stick. This happens subtly, sometimes you aren’t even aware it happened. You just know your job is to get individuals to perform and those are the 2 known methods.

So which should you decide? The answer is: it depends on the individual and the situation. However, you will find that rewards tend to work better over the long term.

The challenge: there are a lot of myths and misconceptions about rewards that lead you down the wrong path.

What is a Reward

The basic definition of an incentive to promote a positive behavior or show appreciation. A reward is something that is earned by the individual. Notice that rewards are meant to promote or encourage a positive behavior. An employee gets a reward for something they did - and that behavior is good.

It is possible to create a reward for avoiding a bad behavior, but this gets incredibly complicated and is not nearly as effective. For example, if an employee uses a lot of “ums” and “uhs” during presentation, you can tell them they will earn a reward for NOT using them. The challenge is that once you put it out there, the mind is going to be thinking about them and it tends to actually cause more issues. In this case, you would reward a clear and well expressed presenation, not avoiding certain phrases.

A Salary is Not a Reward

There is still a class of managers out there who think that a salary is the reward for the employee. Do not be that person. A salary is an agreed upon exchange of labor for money. It is a contract. It is not a reward. I see many old school managers say this, particularly when an employee asks for something extra. For example, an employee says “if we finish this project early, maybe we can get a reward by leaving early on Friday”. At this point, the bad manager will say “your paycheck is your reward, why should you get something else?”

If you think that managers don’t say that, you are mistaken. I’ve heard them and I’m not talking about 30 years ago - I’ve heard this within the last 6 months.

Focus on Non-Monetary Rewards

One of the biggest debates when it comes to rewards is whether the reward should be monetary or not. I have some strong opinions about this and you will figure out quite clearly that I happen to think the best rewards are non-monetary in nature.

Managers who focus on monetary rewards are usually held back by the fact that they don’t control a lot of the rewards. Things like bonuses, raises, one-time awards, etc., are rarely in the control of the manager. These things come from the compensation group. Some managers will have a line item in their budget for rewards, but most don’t.

One of the biggest myths is that all employees want money as a reward. I get this myth, but it is wrong. The thinking is that money is something that every person likes and can use more of. Plus, if you ask employees what they would want as a reward, they will say “money”. Mainly because they are used to a monetary transaction (I work, you pay me) and see money as the only option.

Don’t get me wrong - no one will ever get mad that you gave them money, but remember that the goal is to increase a desired behavior or show appreciation. Money itself has been proven to be the least effective method of achieving those two ends.

What are Good Rewards

Experiences

I was once the fortunate recipient of a windfall. I had been awarded some stock options for a company that was being acquired and going private. As part of the sale, all stock options were instantly vested and paid out. I got a rather significant check. I can’t tell you how much that check was for (this was over 10 years ago). I do remember that I was able to use a portion of that check to take my family on a vacation to Disney. I fondly recall a lot of memories of that trip and I am smiling as I write this because they are flooding my brain.

People remember experiences much more than they remember cash or a check. I know the check enabled the experience, but I only remember the experience.

Find ways to provide employees experiences instead of just money. I remember one employee who really went above and beyond for an extended period of time and helped the company out of a jam. We learned that he and his long-time girlfriend were fans of the opera. As a reward, we got him opera tickets and arranged dinner before the show. He decided to use that night as a way to propose to her.

Could we have given him a check? Sure, but that experience and story is much better than any check.

Personalized gifts

When you know enough about a person to be able to give them a gift designed just for them, it adds to the meaning. The fact that we knew the employee liked the opera and we gave him a gift that fit his enjoyment did more than give him the gift, it showed we knew and appreciated him on a personal level. You can only do this when you get to know the person.

This is one of the reasons I am so insistent on regular one-on-one’s and building relationships. Those are the ways you learn about people and what they like and would appreciate. You learn their hobbies, the things they do, the things that give them joy. You aren’t intentionally looking for it, but you learn it in the day-to-day chats.

I need to clarify here - a personalized gift is something that is personalized to the individual. I do not mean some company swag where you’ve had their name embroidered on it.

Praise

You will find that some people respond incredibly well to praise. In these situations, you’ll have to customize the praise in the method that is most impactful. I had one gentlemen who worked for me who had a huge ego (and he was good at his job) and I learned nothing was more valuable to him than getting praised in public. He loved to be the guy who you called out in front of a large group and talked about how great he was. Praising him in private didn’t work as well. He wanted to not only hear it, he wanted the dopamine hit of knowing everyone else heard how great he was too.

Be aware: some people don’t like praise, public or private. I’ve had plenty of people on my teams who hated being called out in public. Instead of a reward, it was an embarrassment. You have to know your people.

Opportunities

At first glance, it seems counterintuitive, but professional opportunities can be an incredible reward. Letting them take on a project that is exciting or a growth opportunity, attending a professional training or conference, or simply letting them observe a higher level meeting can have incredibly positive impact.

The beauty of this reward is that it not only gives someone a chance to do something new and different, but it essentially lets them know that you have confidence in their growth. I love to use attending conferences and trade shows as a reward - it not only is good for the individual, but they can learn and do something that helps the team.

Conclusion

Because managers tend not to have access to large amounts of cash for rewards, it requires a bit of effort and creativity. I promise you that the effort will pay off far more than just a gift card or check.

My one warning: do not ask employees to tell you what reward they want. I guarantee they will all say money and you’ll think I’m wrong. But think about the best rewards or gifts you ever got - every one of them was either a memorable experience or the item had some special meaning. Even if your little survey gets things the employee tells you about - the fact they had to tell you so directly diminishes the impact.

Challenge yourself - learn about everyone on your team so you can provide the perfect reward tailored to the individual.