Studies have shown for years that employees respond better to tangible rewards over cash (see Workforce, Nov. 1998), yet until recently, the psychological/biological factors have been a conundrum. With her book Mapping the Mind, Rita Carter gives some insight into the critical role of brain biology to human motivation.
The human brain is divided into two main hemispheres. The left brain controls numerical and logical functions. Money is processed/analyzed here, and this hemisphere thinks more in terms of "fairness." The right brain controls emotions and motivation, and thinks holistically. This hemisphere generates the emotional energy for performance. Symbolism and recognition are processed here.
Brain biology is the actual reason why certain recognition efforts may end up "demotivating employees." Cash, biologically, does not work as a motivator. Recent studies show cash must approach 5%-15% of the recipient's annual income for it to be effective. For instance, $100 cash is used to recognize 10 years of service ($10 per year of service is a very common symbolic recognition budget). The employee's mind starts calculating, "... that's only about $.85 per month. This place must not care about me." Therefore, a larger budget must be utilized to stimulate behavior from the left side.
Wants vs. Needs
We must carefully separate an employee's wants from his/her needs. Wants are transient left brain desires, providing short term desires and only temporary change when these desires are met. Needs are deep seated right brain human requirements, providing long term satisfaction and change when met.
A quick note about surveys. When polling employees about what they would like to receive, the most common response will be more money. Interestingly, surveys are skewed to employees "wants" while empirical data clearly concludes the opposite. You can't be an effective "right" brain organization by asking "left" brain questions.
Building a High Performance Recognition Culture
There are three distinct roles at play in this culture - compensation, acknowledgment, and recognition.
Compensation pays for a minimal outcome on an externally equitable basis. Recognition engages the employee emotionally to energize behavior. Acknowledgment guides behavior by letting people know what is expected. Here is a common problem that some companies face.
Cash bonuses (above) are primarily used to guide behavior, so the acknowledgment is not pegged to the desired actions. Recognition, if even utilized, is an afterthought and insufficiently administered because line managers do not understand its significance. Furthermore, acts of acknowledgment in this "compensation culture" may make employees feel frustrated and manipulated since their standard has now called for left brain stimuli. A performance culture must have balance.
Compensation systems must be fair and recognition must be implemented properly before an acknowledgment program is implemented. Work from both ends to the middle.
Posted on Mon, June 9, 2008
by Kurt McDowell filed under