• 02.06.13

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.

Reinventing Reward Systems For A Happier Office

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,, 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,, 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

advertisement 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, 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 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]