Reinventing Reward Systems For A Happier Office

Your father probably loved that gold watch he got for loyal service, but those days are over. This generation demands immediate recognition and creative incentives that reflect the social media world they understand.

The Millennials already account for 40 million in the workforce, and they are set to become America’s first hundred-million-member generation. How they grew up—with mobile devices, online access, and social media—influences the way they work. And it’s influencing the way everyone will work.

Although I advocate the benefits of working as an independent contractor, I understand that doing so is a stretch for many people. I think there is a much larger number of workers who operate with a freelancer mentality but have chosen to work for companies for various reasons. There’s the nasty reality that many new companies fail, which introduces the possibility of not being able to provide for your family or build an appropriate livelihood. Some people might want the perks of corporate life such as paid vacations and health care and retirement planning. For these reasons, I believe that many people will still work for companies, but I also believe that how they do that must change.

Today’s workforce is looking for a new way to engage with work, and traditional employers must recognize that. Similarly, start-ups—which if successful, will also become big companies—must also establish a modern culture that appeals to today’s talent. Today’s companies need to appeal to today’s modern workforce—not treat people the same way I was treated when I started working. The problem is that many employers still don’t understand and don’t value the mind-set of this new generation and how it is revolutionizing the way we work. Many companies, such as Facebook, salesforce.com, Google, and LinkedIn, as well as countless start-ups, understand that there is a huge war for talent under way, and they want their key people to feel challenged and proud of their employer. They offer incredible perks, like massage services and pet-friendly policies, and give them time to work on their own ideas. These companies have also figured out how to connect to them, embracing such practices as more flexible hours, valuing outcomes over attendance, and employing the latest technology. All companies will have to undergo a similar shift, or they will miss out on working with the talent that will dominate the workforce.

Some employers are still turned off by the Millennials' high opinion of itself and its impatience to get to where it wants to be, but in fact this generation has significant contributions to offer, and its philosophy that every individual is in charge of his or her own fate is a new worldview that corporations will need to embrace. I am amazed when some companies don’t let their employees access Facebook or Twitter from their work environments. People work from home and after hours, and they can catch up anytime through Facebook and their smartphones. Limiting network access to these services inside a company is just lame. We should be holding people accountable for outcomes and results, not dictating what they can do when. It is this kind of behavior that chases young people away from companies.

One aspect of work that employers have to reevaluate and, in many cases, change, is the way they recognize employees.

More than anything, today’s employees want to see the difference they make in their organization and be recognized for it. In fact, a study conducted by the Gallup Organization of more than eighty thousand employees found that 82% of employees surveyed said that recognition motivates them to improve their job performance. It found that one of the top twelve key factors in securing employee engagement is regular praise and recognition from managers.

Traditional service awards like gold watches and tie tacks don’t motivate or engage employees because there is no meaningful recognition behind the one-time reward, the study concluded. We are seeing new ways to recognize employees proliferate in the workplace. Take, for example, Work.com, a service that uses social technologies to transform the way companies recognize and reward their employees. (Disclosure: I invested in this service, formerly called Rypple, and in 2012 it was acquired by salesforce.com.)

Work.com allows for bits of real-time feedback, goal setting, coaching praise, and public recognition for team members. People feel more engaged and passionate about their work when they feel more valued. Making it easier to recognize good work and deliver praise goes a long way to inspiring employee and company success. With Work.com, instead of waiting for the dreaded annual or semiannual performance review, managers can give continuous feedback, coaching, and praise at anytime, not just at an artificially appointed review period. There are a variety of ways this can be delivered, in the form of an electronic note, or even a badge that will go on a worker’s profile. (This evokes social gaming practices, and the so-called gamification of the enterprise is one trend we’ll continue to see take off.)

Real-time and public recognition makes sense—it happens when the feedback is still relevant and when changes can be more easily implemented. That creates a much more iterative and agile culture. Using a technology that is social, and open for everyone to see, brings teams together and helps them stay focused on what matters. Companies like Gilt, Facebook, Mozilla, and Zendesk all use Work.com to approach performance management in a different way, one that actually helps improve performance of their employees—and ultimately the entire company.

Maynard Webb is an author and strategic consultant in Silicon Valley. Follow him on Twitter at @maynard.

Excerpted with permission from the publisher, Wiley, from Rebooting Work: Transform How You Work in the Age of Entrepreneurship by Maynard Webb. Copyright © 2013.

[Image: Flickr user Victor Gomez]

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8 Comments

  • guest

    I understand that many people think all work can be done from anywhere at any time and that results are the only thing that matters and the only thing to be rewarded. I respectfully disagree. I do agree that measuring results is critical, but "presence" counts in so many roles and "being there" and being there during a prescribed time counts and should be rewarded, too. In health care, security, technical repair service, consulting, manufacturing, sales, and a multitude of other roles "being there" counts. Yes, there are many roles where someone doesn't need to be there at a prescribed time or place, but I am concerned that not enough attention is paid to "knowledge work",and handiwork and craftsmanship that does require presence. Just because some jobs can be done from almost anywhere doesn't mean that any job that requires presence must be because the management isn't savvy enough to adjust to the way a new generation would prefer to work.  I think almost anyone would agree that being there is the key to effectiveness to perform surgery, deliver refrigerators, build cars, repair a leaky faucet, and pour us a drink, with a smile. Measure the results, and remember that in many cases, results don't come without presence.

  • guest

    What's up with the black bar on the left side of the screen that is in just the right place to be annoying?

  • Daniel and Angelina Musik-Comp

    To me, the point of distinction is understanding the shift from a geographic work-force and a patriarchal relationship to a dispersed team all over the globe as a meritocracy. 

    Think of how packets are moved around the Internet. Tasks and preferences are similar. 

    What I love about Maynard's work is the focus on human value and relationships (mentoring,recognition, etc) within the changing landscape.

  • Denzel Eslinger

    I think you are mistaken on a couple of points in an otherwise very good article.  I have chosen to work for the same company for 11 years now (triple any previous tenure) and the reason is that they do both recognize me for individual and group projects, but also recognize the collective work (that often gets overlooked for specific recognition) that is done over the years by celebrating the big career milestones like 5 & 10 years.  I think what makes it different at my work is both are done publicly and with my teammates involved.

    Study after study show that recognition matters both in employee engagement but also in longevity of the workforce and given the high cost of turnover it would be silly to think that just using one type of recognition is a cure all, just as you are critical of the past methods, a balanced approach would seem to work much better.

  • Matteo Casadei

    I can just say that all of this is actually so true: expecially in my country, Italy, there is a huge and urgent need to change corporate mentality and the way employees are rewarded for their service, commitment, novel ideas, as well as "dedication". 
    I consider myself as the kind of freelance-attitude employee and what I can say is that I just prefer way more a public praise on the quality of my work than a so called one-time "hardware" reward.

  • Ara ohanian

    Maynard, there’s no question that the future of work is changing.
    Increasingly careers are being replaced by jobs and jobs by tasks, and whether
    employees are contractors or not, the crucial thing is to ensure they are given
    the support, the structures they need to succeed. Without long term benefits
    such as final salary pensions and gold watches, the best way to both ensure
    your employees’ contentment at work and to respect them is to concentrate on
    their happiness while they are working with you it – be it for one week or ten
    years. As the leader of an international technologies company I have found that
    focusing on employee happiness has improved productively and made ours a
    positive welcoming place to work.  And there have been two results to this
    approach. First, we have (by the standards of our industry) far lower staff
    turnover and second I have a new job title: CEO and Chief Happiness Officer. 
     

  • Janet Tate Crum

    It isn't only Millennials who value (if not demand) "flexible hours, valuing outcomes over attendance, and employing the latest technology."  These approaches can make employees of all generations (and genders) more engaged and productive at work.