Q&A: Want happier workers? Drop the stick, offer carrots

Computerworld - It's a truism of the workplace: People tend to work harder in organizations where their individual contributions are recognized and rewarded. Companies with engaged employees also generally perform better. According to a 10-year survey of 200,000 managers and employees around the world conducted by The Jackson Organization in Laurel, Md., organizations that consistently recognize excellence generate a return on equity more than three times higher than institutions that don't. Chester Elton, co-author of The Carrot Principle, spoke with Computerworld's Thomas Hoffman about how purpose-based recognition can improve worker productivity -- and generate stronger business results.

Excerpts from that interview follow:

What type of recognition works best? Lavish rewards like a weekend at a spa or a simple "thank you" made in a presentation before someone's peers? The answer is both. You can't just have one big ceremony at the end of the year where you recognize a top performer and send them on an all-expense paid trip with their spouse. That's where companies often fail. Many companies have a big blowout affair once a year, but they don't have anything underneath that. You need to have both. You need to encourage effort, the day-to-day recognition, the verbal praise, the handwritten thank you note. You need specificity, it needs to be value based, and it needs to be sincere.

When you hit major goals like higher [revenue] growth or customer satisfaction ratings, then you can have the year-end recognition. If you've saved a company $10 million, a simple thank you isn't enough.

Who are some leaders in this space and what are the innovative steps they've taken to reward employees? We tend to look for the spectacular. Frankly, where you're going to get your best results are in the blocking and tackling. For instance, one company we worked with, DHL, has trained its managers on how to do day-to-day recognition, how to write thank you notes. The recognition that works best is recognition that gets back to the basics: Rewarding people who get back to the core value of the company, like calling out an employee at a team meeting who has done an exceptional job.

What are the most common mistakes that managers make when it comes to recognizing employee achievement? One of the most common mistakes is that you don't need a plan, that you can just ad hoc it. Another common mistake is that very general praise works. "Attaboy" or "great job!" Specificity has a great impact. "Tom, thanks for getting that article in on time." It's a big difference from "Tom, love that wacky tie." Consistency breeds trust.