Rewards & Recognition

The People-First Approach: Rewarding the Process Rather Than the Results

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It’s a typical scenario in business and in the world in general. You set a goal for something, such as a sales goal, and then you establish attractive rewards for reaching that goal.

Then, when someone attains that goal, you reward them as a way of saying thank you for the hard work. It all seems pretty straightforward, right? Well, some people, including behavioral scientists and economists, say that this way of thinking may not be getting the best results.

A couple of years ago an economist decided to do a study on rewards and incentives. He picked schools in big cities such as New York, Washington, D.C., Dallas and Chicago where he set up control groups and then varied the way rewards would be distributed to the students in the those cities. In fact, he gained a lot of criticism by offering to pay students for their achievements on tests.

Enjoying the process drives better results

What he found was that, in places like New York, where he paid strictly for test scores given during the course of the year, there was little improvement when it came to the yearly standard aptitude scores. However, in Dallas, where a modest amount was paid out to students every time they finished reading a book, there were huge gains made not only in reading, but reading comprehension and test scores. Why did this happen?

Although the economist and others who have studied the results have come up with a variety of explanations for why this happened, there are some who feel that the answer is simple. While some of the groups were rewarded strictly for their results, as is the case with most employee incentive and reward programs, those in Dallas were rewarded for the process.

They got money regardless of a higher test score. They just had to enjoy reading to make $2. Because they enjoyed the process more, they retained more and ended up testing better in the long run.

Now, imagine this scenario in the business world. You are a sales person at a company that sells Widgets. You manage to make a whole lot of sales, but they are to smaller companies, which means you’re earning smaller commissions and, ultimately, a less amount overall for the company.

A results-only focus misses a lot

Your colleague, however, who has longstanding clients who buy more products and bring a little more prestige to the company, out-paces you when the sales contests come along. With just one sale to a large client he easily eclipses two or three sales of your smaller clientele. You work just as hard as the guy making the bigger sale, if not harder, but your return is less. How long would you keep that up before you got so discouraged that you decided to look elsewhere?

A good way to think about this is to remember the old phrase, “the journey is more important than the destination.” Too many companies fixate on the bottom line – and only reward at the end when the person crosses some pre-determined finish line. This ignores, however, the process that it takes to get there and often excludes many good producers along the way, and they may be your best talent.

For sales people, it is often the intangible things that really benefit the company. For example, the relationships that a sales person establishes with a client can sometimes outweigh the number of sales produced or the size of the commission made. A good relationship can lead to word-of-mouth referrals and potential organic growth down the road. Again, a short-sighted company that only looks at the results may miss that and fail to reward a hard-working employee who has been establishing successful relationships all along the way.

Looking at people first

If that sounds intriguing to you, remember that more and more studies are showing that employees are ready to try looking elsewhere for jobs that reward them more often and in different ways than have been done previously. They are looking for companies that take a “personalized approach to how they do business.

These companies know that by keeping their workforce happy, they create a great working environment that leads to teamwork, and ultimately to increased productivity. Rather than just looking towards increased profits and sales, they look at their people first. It’s a concept that is relatively new and many companies still find the idea contrary to the norm – and those companies are wondering why their people are leaving in droves as the economy improves.

Now’s the time to think about changing the way you reward your people. Perhaps you can reward them at different times throughout the year rather than at the end of the fiscal year when they’ve crossed an arbitrary finish line.

Or, set new standards by rewarding the hard-working, but lower-revenue sales person so it’s not just your star sales person reaping all the rewards. Rewarding the process rather than just the result could be your best decision yet.

Jennifer Vecchi is the Manager of Individual Incentives and Recognition Programs at Atlas Travel in Milford, MA, where she is responsible for supporting her client’s recognition programs and sales contests.
  • Robert Dromgoole

    I’m a sales professional, and I have to totally disagree with this.   Results are what matter.   You either hired the candidate or did not.   Rewarding ‘activity’ is like not keeping score in the kids soccer game.   Just my $.02.

  • Paige Craig – BetterWorks

    I love this concept. And Robert, I totally get what you’re saying – results do matter. But I think the point here is that perhaps its better to have a balanced rewards program that recognizes the baby steps you have to make in order to get to a big goal. This seems to make sense given the behavior I’ve seen in life. Most people find it difficult to plan for the long term and practice good behavior when the big benefit is so far in the future. We all know we should save $ for retirement and small amounts starting after college can equal millions 40 years later…but how many of us do that? instead we like to have our rewards now, tied very closely to our actions. But most “big wins” in sales, product development and even life take months or years of proper behavior.

    I’m going to take this concept to my team tomorrow. I love the idea of identifying the behaviors we need to practice today, offering small rewards & recognition for those, and thereby encouraging people to achieve the big wins of tomorrow. To give you some context, we’ve built an employee rewards and recognition product at http://BetterWorks.com and this concept tied perfectly into our vision of smaller, more frequent rewards, perks & recognition. It’s simple, beautiful and brilliant.

    So glad I stumbled upon this article…must dig into this deeper now

    • Irish

      Please DO NOT TAKE THIS TO YOUR TEAM !! We dont need anymore competition in the employee rewards space !!!

  • H Risher

    I siuggest running this idea by the CEO to get his buy-in before trying it.

    It is not clear why reading a book is a process rather than a result.  Plus i do not believe employees are that simplistic.

    There is no reason why rewards cannot be linked to both process and results.

  • http://twitter.com/maguireap Allison Maguire

    Robert, I bet your kids don’t enjoy soccer at all, they just want to win! I think this concept is spot on and could be applied to many elements of human change. We are looking at creating incentives for more collaborative ways of working and I think this fits nicely with the typical badge earning schemes which provide recognition and can also be linked to tangibles.

  • Jennifer Vecchi

    Thank you for all of your candid feedback on the topic! To clarify, my intention isn’t to encourage companies to stop rewarding the end result – I don’t think any company would benefit by removing a finish line because we all need goals. My point is that I think too many companies focus on rewarding only the end results and could be missing out on developing some great talent by recognizing people for how well they perform during the process. Let’s face it – every sales team is made up of a medley of personalities and is the better for it – which means the more ways you can reward, the better chance you have to motivate the masses. Not to mention, if you only reward top earners, you could be encouraging bad behavior – perhaps setting the tone for immoral practices or cut-throat techniques that go against your corporate values.