5 reasons non-monetary recognition makes more sense than cash

Why non-monetary recognition doesn't lead to performance lags

Give a chicken a kernel of corn and it will play the piano — that was the premise of an old carnival game  where a trained chicken pecks on toy piano keys after a coin is dropped in the slot. 

The trick works pretty well but it’s not like the chicken is engaged in the performance — the bird will not continue practising its scales once the anticipated reward has been delivered.

People can also be trained to respond to a system of rewards. Bonuses, cash prizes, extra vacation days can all be used to have employees grind out a few extra hours each week. But like the chicken, as soon as the prize has been delivered, people will stop performing, as seen in Alfie Kohn’s 1993 article “Why incentive plans cannot work” in the Harvard Business Review.

Non-monetary recognition, on the other hand, does not affect employee behaviour the same way monetary rewards do. Here are five reasons why:

Recognition brings status
Recognition, when it’s done well, is public. You can praise an employee on the front page of the corporate intranet. This can help elevate an employee’s status among her peers. Cash rewards, on the other hand, need to be kept private. There’s a strong taboo about discussing pay scales in the workplace, meaning you can’t post an employee’s bonus payments in public. Yes, an employee with a fat bonus can put a payment down on a new Lexus, but that brings us to the next point.

Recognition is guilt-free
Monetary rewards feel good for a moment. But once the money is in the bank, many employees become conflicted. Is the money still a reward for good work? Or does it really need to go to roof repairs, paying down a credit card or get tucked away for the kids’ college funds?

Recognition, on the other hand, can be enjoyed by employees —with no strings attached. It goes straight into their emotional expense accounts and doesn’t have to be used to repay past debts.

Recognition goes above and beyond
Cash is expected. It is part of the contract an employer makes when it hires an employee. If bonuses are offered for performance, those also become expected — it’s just part of the salary package, something owed to employees.
Employees aren’t owed respect and appreciation. That’s perceived as a gift — something given to an employee for significant reasons beyond just showing up and clocking in.

Recognition creates meaning
Doing meaningful work is deeply important to most people. Cash payouts don’t create meaning. In fact, if an employee receives a bonus when he knows he only contributed 50 per cent of his best effort, it can make the workplace feel capricious: “They don’t know what they’re doing here — and look how much they pay me to do it.”

Recognition, on the other hand, is all about meaning. It says, “We saw how much work you put into the Jones account and that means a lot.”

Recognition is human
People don’t want to spend their whole lives cranking widgets, even if that’s their job. They want to be part of a bigger social enterprise. When employers recognize their contributions, when they thank Sally for her 99.9 per cent widget success rate, they are building a personal connection with an employee — she is now a vital part of the team and the tribe.

Cash, on the other hand, can be dehumanizing. Just like the episode of Seinfeld where Jerry gives Elaine a stack of bills for her birthday, cash can leave employees feeling used. It can leave a lingering sense of “Sure, they pay me, but they don’t really know me.”

When it’s working as it should, recognition transforms a company’s culture. People bond with each other and watch each other’s backs. They become engaged and look for new ways to contribute.

Elysha Ames is senior manager of digital strategy at TemboSocial in Toronto, a provider of software add-ons that integrate with the corporate intranet to help empower, inform and create a culture of employee-driven excellence. She can be reached at elysha@tembosocial.com or for more information, visit www.tembosocial.com.

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