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Research shows rewards, recognition programs not one size fits all

Figuring out how to keep employees engaged can keep human resources professionals up at night. Good pay, generous benefits, and various perks contribute to the mix of techniques used to motivate employees. But a simple pat on the back may be the best place to start. 

Although employees value pay hikes and prestigious titles, a good many also cherish a handwritten note of appreciation from a superior. They know raises and promotions aren’t going to come around every day, but they also know how often they work hard and deserve recognition for a job well done.

Recent studies show that a mix of various kinds of rewards and recognition—not just a standard routine—is necessary for maximum effectiveness. And employers should keep in mind that what works for one employee won’t necessarily be meaningful to another.

Millennial challenge
Insurance and HR solutions provider Aon Hewitt and employee engagement consulting company O.C. Tanner released a study in May showing that typical employer rewards and recognition programs are often ineffective for millennial employees. The research shows that 38 percent of the young workers in the study wanted their employers to improve their recognition programs.

“With millennials becoming the largest generation in today’s workforce, employers need to ensure their recognition programs meet their needs,” Gary Beckstrand, vice president at O.C. Tanner, said after the study results were announced. “Millennials want recognition like any other employee but appreciate recognition that carries meaning and helps them feel empowered.”

The research finds that organizations with effective recognition programs for millennials include three key rewards vehicles:

  • Handwritten notes.
  • Experiential rewards (for example, event tickets).
  • Thank yous from peers, managers, or next-level managers or senior executives.

“Millennials have a greater need to be recognized and want to be in front of management much sooner than previous generations,” Neil Shastri, leader of Global Insights and Innovation at Aon Hewitt said. “Being recognized and thanked by leaders in a meaningful way and on a frequent basis not only gives millennial workers a rewarding experience, but also strengthens their personal connection to the organization and encourages them to continue to be key contributors.”

Money a motivator
HR software firm BambooHR released a survey on workplace rewards in April of more than 1,000 U.S.-based, full-time employees. The study found money is a prime motivator. So is a promotion, but 82 percent of the employees in the survey said they would prefer even a 3 percent raise over a promotion to a new title.

But the preference for money isn’t universal. The report on the survey points out that nearly one in five employees would prefer the title change, and the company’s past studies have found money isn’t the main reason people leave a job. It actually falls behind work-life balance and advancement.

Just what “advancement” means can be complicated. The company’s most recent research shows that employees think advancement means more than a new title. Instead, it also means more money and expanded responsibility.

“So, offering employees ‘advancement’ in title or responsibility without increasing their pay might not be the best plan,” BambooHR said in its report on the survey.

Different rewards for men, women
BambooHR’s survey finds that men and women have different reward and recognition experiences. The company reports that 50 percent of men surveyed said they receive recognition for their good work a few times a month or more frequently, compared to just 43 percent of women who reported such frequent recognition.

The study noted one potential reason for a difference in recognition between men and women: Men say they need more frequent recognition than women. BambooHR’s report on the study says “46 percent of male respondents said they need recognition of their performance, at least, a few times a month compared to 40 percent of women who said the same.”

The study report also says that men are more likely to be willing to give up money for recognition. “Men (36 percent) were more likely than women (24 percent) to choose company-wide email recognition instead of a cash bonus while women (76 percent) were more likely than men (64 percent) to prefer an unpublicized bonus,” the survey report says.

Link between recognition, job satisfaction
The BambooHR research covers more than differences between men and women and money versus advancement. It also examined how recognition affects job satisfaction. The survey finds that “94 percent of employees who receive positive recognition on a daily basis say they are satisfied or very satisfied with their company.”

The report on the survey advises managers and executives to start with verbal recognition for even small accomplishments. “Employees said their most preferred method of receiving recognition on work performance is in-person verbal recognition from their bosses,” the report says.

The report also advises encouraging employees to recognize each other’s successes. “Our research also showed that peer recognition can sometimes be more impactful than that of a superior,” the report says.