Rewards & Recognition

Valuing Employees: Money is Important, But Recognition Is the Key

Employee praise

Who in your organization has the most direct impact on how your customers perceive the company?

This, of course, varies by industry, but it’s rarely ever your senior executives. No, it’s more likely the people on the lowest rungs of your career and compensation ladder.

I have the privilege and honor of contributing to the Compensation Café blog. Two of my fellow bloggers in the Café recently offered solid insight and advice, starting with Chuck Csizmar, founder and principal of CMC Compensation Group, on the importance of your front-line employees:

Customers react first and foremost to the employee they’re dealing with, the one they’re facing, whether the transaction is financially significant or not. To the customer, that employee is your company, and these decision-makers will consider the treatment they receive a reflection on your company, for good or ill.

It’s worth noting that the person who just caused you to take your business elsewhere is likely one of the lowest paid employees in that organization. Does that reward/impact relationship make sense to you? Perhaps the organization doesn’t recognize/reward (value) the impact that their employees can have on customer relations.”

Does your organization really value employees?

Since these employees are critical to retention of valued customers, does that mean we should pay them more?

Not necessarily. Pay scales and appropriate ranges for knowledge, skills, job functions, etc., exist for a reason.

But we do need to value employees more.

Another Café colleague, Dan Walter, president and CEO of Performensation, made the case quite well in a post discussing a recent manhunt in Southern California for a man who was pursuing and killing police officers and their families. Dan explained:

First, it was announced that a $1,000,000 reward was being offered for information that would lead to his capture. You read that right, one million dollars. As compensation goes, this is not chump change. A day or two later, while I watched the evening news with non-compensation professional friends, it was announced that an additional $100,000 had been added to the reward. One of my friends said, ‘Why would an extra $100,000 convince someone to call when the first million didn’t?’”

What valuing employees requires

Dan’s point is that more money, while an obvious solution, isn’t always the right answer. For many legitimate reasons, we often cannot or should not dramatically increase salaries or pay. But once we do have pay rates at appropriate levels, then we need to focus on how we value employees.

Valuing employees requires us to:

  1. Realize the critically important role those in customer-facing roles play.
  2. Look for ways to reinforce for these employees how and why their efforts are important.
  3. Value these contributions by recognizing and rewarding employees when they demonstrate excellent customer service and other key values of the organization

Building success for the organization

Of course, this “valuing” shouldn’t be limited to just those who interact with employees. Everyone, right down to the person who makes sure the offices or sales floor is clean and attractive, are critical to delivering a good customer experience.

Our focus should be on all employees to recognize and reward and, indeed, value them for the difference they make for customers and, ultimately, the success of the company,

Do you feel valued in your organization?

You can find more from Derek Irvine on his Recognize This! blog.

Derek Irvine is Vice President, Client Strategy & Consulting Service at Globoforce, a global provider of strategic employee recognition and reward programs. In his role as a thought leader for employee recognition at Globoforce, Derek helps clients set a higher ambition for global, strategic employee recognition, leading consultative workshops and strategy setting meetings with such organizations as Avnet, Celestica, Dow Chemical, Intuit, KPMG, Logica, P&G, Symantec, and Thompson Reuters. Contact him at irvine@globoforce.com.
  • Paul, London

    While everyone has different motivation and circumstance in my experience a pat on the back isn’t going to pay thd mortgage is it…
    In this day and age I’d rather be left unmotivated but well rewarded thank you.

  • Debbie

    If you Really want to grow your business and learn how to be the best manager or employer you can be to those who work directly with your customers, just take the time to allow your direct reports to conduct a peformance review on your contributions as the manager of your team. I started this procss several years ago and I have learned and benefited a great deal by doing so. The end result will blow your mind.

  • Gregorie Kalipersad

    Interesting reading!

  • Elizabeth Black

    How do managers know what employees value? They have meaningful work and career conversations with individuals and they discuss performance and rewards. I would add a #4 to this great article–What valuing employees requires–meaningful interaction and conversations.

    • http://www.facebook.com/people/Randy-Martinez/100000162320157 Randy Martinez

      Hi Elizabeth, I would clearly tell you that your statement, while well meaning, is incredibly naïve. Why? Employees will never tell their employer they are motivated by money. There is not an employee that I know that will ever tell their employer that a 2500 dollar bonus is their motivator. But it is. Do not let anyone fool you…money motivates everyone all the time….

      • http://twitter.com/klistwan Konrad Listwan

        At the same time Randy, you don’t want to be motivating employees directly by just money. The danger is that it replaces intrinsic motivation with extrinsic motivation. And people work much harder when they genuinely want to do it — not when there’s just a nice cheque at the end for them.

        Joel Spolsky talks about this here (http://www.joelonsoftware.com/items/2006/08/09.html) — it’s a very interesting read, I highly recommend it!

  • Scott Span

    Derek, in short, amen! I couldn’t agree more that it’s not all about money. One thing I would add, per a previous post, ASK employees how they prefer to be recognized: http://www.tlnt.com/2012/06/06/6-ways-to-create-and-honor-a-culture-of-employee-development or a bit more if interested: goo.gl/qLkSp . A one size fits all approach just doesn’t work anymore.