Recognition vs. Reward

In his book, The Seven Habits of Highly Effective People, Stephen Covey states: “You can buy a person’s hand, but you can’t buy his heart. His heart is where his enthusiasm, his loyalty is. You can buy his back, but you can’t buy his brain. That’s where his creativity is, his ingenuity, his resourcefulness.”

But we cannot understand how to win their hearts if we don’t understand what brought us to this turning point.

So, I take a few minutes of your time to explore the past. Then we’ll explore some differences between recognition and reward based continuous improvement suggestion programs.

In his work An Inquiry into the Nature and Causes of the Wealth of Nations (1776), Adam Smith foresaw the essence of industrialism by determining that division of labour represents a qualitative increase in productivity.

Smith's principles, perfected by Taylor and brought to operational extremes in the 50s - 60s, have left a deep mark in industrial behaviors.

Work, through specialization and compartmentalization has been depersonalized. People have become a number. They’ve been praised for clocking in/out at the correct time. People have been promoted for their "years of service". Bureaucracy has killed any initiative, as well as the ability to think.

The "revolution" started in the 80s in Japan as the focus shifted gradually from function, task and attention to task, to process, processing activity and involvement in the process.

The results of the new approach were astonishing. Japanese Quality Circles, for instance, became well known world-wide.

So, what really happened? A revolution in the way we look at people, as being our greatest asset.

The employees become an ally rather than just a hired hand. They:

• Know the enterprise’s vision and strategy, the core values and policies
• Understand the processes’ performance
• Are responsible and accountable
• Are empowered to contribute
• Are given time for training and for improvement activities
• Are allowed to explore, set challenges, make mistakes, test themselves
• Are deeply involved, using their own creative energy
• Use problem solving techniques and systematic research for opportunities
• Improve their own workplace
• Are continually challenged
• Thus, they feel job satisfaction and fulfillment

There are a few factors affecting the degree of involvement of an employee. Among them:

• Knowledge of the company and its processes
• Power to make decisions that affect the company’s policies, practices and strategies
• Open Communication and Feedback regarding the company’s performance
• Reward based on company’s and individual performance
• Recognition for their contribution

As these factors are present in a higher degree, the employees become more and more valuable contributors to the company’s welfare for the good of all.

Recognition and Reward are the greatest motivators, would you agree?

Yet, there are major differences between them.

Whereas recognition is psychological, reward is financial. Recognition is personal and needed often; reward is impersonal and occasional.

Recognition is used to keep employees and based on values and principles whereas reward is used to attract employees and based on corporate budget.

Lastly, recognition reinforces behaviors that cause lasting changes whereas reward supports short term objectives.

What to choose then? How to combine these two factors and create a continuous improvement suggestion program that will address such distinct goals?

What would you rather have? Recognition or reward?

As the subject is rather vast, I’ll spend more time on it in further pages.

I’ll just leave you to reflect on this for now.

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