Why do we need an adaptable reward and recognition system?


In earlier posts, we established that the purposes of performance appraisals are still valid, however, the current HR practices do not satisfy those purposes. I also shared what I’ve tried, even without HR’s support. Let me recap the key takeaways:

  1. Having a psychologically safe environment is a prerequisite.
  2. Give feedback early and often so that the feedback is relevant and actionable.
  3. Feedback process is lightweight and transparent.
  4. Try small before going big. Start with 1 or 2 teams before an entire department. If your company has multiple offices, try the changes 1 office at a time.

There are always more improvements that can be made if the company can stomach the changes. However, before talking about those radical changes, we need to talk about reward and recognition. As you know, measurements and rewards go hand in hand.

Let me ask you this question, “do you know the rewards mean the same thing to you as they do to the ones you want to recognize?”

We all want to be respected, recognized and rewarded for our work. But do you know that the form factor that motivates us differs among generations? For example, in the 1990s, you know “you have arrived” if the company gives you a company car. Today, people don’t want the burden of finding a parking space at work or at home. However, they are happy if the company would pay for services like Uber. The desire is still the same: the company pays for transportation to and from work. But, the form factor is different.

For the first time in history, we have up to 5 generations in the workplace today: The Traditionalists, the Baby Boomers, Gen X’s, Gen Y’s and Gen Z’s. The first 3 generations make up 60% of the current US workforce. They are mostly in management and have put the current reward and recognition systems in place. That creates a clash with the other generations who are doing most of the actual work.

That’s why if a company has only one reward & recognition system, it’ll disengage almost half of its workers. Disengaged workers are less innovative. They are less likely to stay long term, and they focus more on output instead of business value. This, in turn, decreases the company’s agility.

But is it only about the generations? How about cultural differences? The workers could get pressure from their families with their parents who impose their own expectations on what reward and recognition should be. Besides ethnic culture, there is also company culture, team culture, etc. 

Additionally, the company itself can apply pressure, because the people in leadership also have their own expectations.

So, is it possible to have a reward & recognition system that satisfies all generations & levels? Yes! We’ll explore that in the next post.

Besides generation and cultural considerations, are there any others?


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