In Organizational Culture - What Gets Rewarded and What Gets Punished?

Guest Contributorby Lizz Pellet | Posted | Culture

In Organizational Culture - What Gets Rewarded and What Gets Punished?

Culture is created by the things leaders choose to reward and punish in their organizations.

Reward and recognition is a lot trickier than it appears; it’s important to reward the behaviors and outcomes that matter and offer rewards that employees actually value.

In 1999, Monster.com produced a Super Bowl commercial that helped position them as the number one job board provider. The ad was not only hysterical but relatable! A series of kids say what they aspire to do in their careers: file all day, claw their way into middle management, be replaced on a whim… You get the point.

Monster.com relayed a message that organizations were treating their employees badly and promised that “there’s a better job out there”, and they could help you find it. The message conveyed something most employees have felt at one time or another. Who really wants to hear that when they grow up they are under appreciated, forced into early retirement, or as a female, paid less for doing the same job?

We know that feeling underappreciated leads to demotivated and disengaged employees, which ultimately hurts the bottom line.

With this point in mind, let’s take a look at “what gets reward and what gets punished” and the impact of both on creating corporate culture.

Pay attention to the right things

Organizational culture is created by four distinct methods in an organization:

how culture is created

All four methods referenced in the above diagram impact one another. For example, some organizations don’t pay attention to the right things, and end up rewarding or punishing the wrong outcomes.

So what’s the right thing? Rewarding those behaviors and outcomes that are most important to the employees is critical.

You could have the world’s best recognition and reward program, run by one of the leading vendors. But if your employees don’t perceive the value of the motivational program, because the rewarded behavior or outcome is irrelevant or arbitrary, then it will have little effect. In this case, the return on investment of the program will be minimal — no matter what. David Creelman touches on this in his July blog post about employee benefits .

Sure, we could go down the whole “Maslow’s Hierarchy of Needs” path and take a deep dive into the psychology of intrinsic and extrinsic motivation, because I do think motivation in general is usually misunderstood by leadership, but it’s really much simpler than the psychology of motivation.

Sometimes leaders are so distant from the daily reality of employee life that they simply cannot relate. It’s hard for an executive making well into six figures to understand the financial reality of their under $50 000 a year employee population.

There is a real disconnect between people (in general, not just co-workers) when one can easily afford a $50 000 car and the other has to toil for 365 days just to hit that figure. That lower-wage employee might not feel motivated or rewarded by a $50 recognition plaque; they may just want the $50, or to be publicly praised.

It’s very evident that organizations, and especially leaders, need to better understand what motivates people.

My experience in trying to create just the right mix of intrinsic and extrinsic rewards is that companies miss a golden opportunity by simply not asking the right questions, or any questions at all. Employee engagement surveys are the optimal vehicle to collect data on not only how the employees would like to be rewarded, but what rewards would motivate them to be more productive.

Food for thought when it comes to your next employee engagement survey.

Rewards are more effective than punishments

Your culture is created by what you reward and what you punish.

An optimal reward and recognition program takes much longer to create but is much more effective in the long-term than creating any type of punishment culture.

Let’s look at the adage of the horse pulling the plow and either being encouraged by the carrot dangling in front of it or being frightened about possibly being hit with a stick.

In the short-term, the stick is very effective. A quick swat sends the horse running.

The carrot, while enticing, has to be fed to the horse a little at a time as he clops along in order to reward the forward movement. The carrot is a long, slow process and has to be used frequently to be effective. But what’s the end result? A happy horse!

What does the stick give you? A beaten, downtrodden horse that will, at some point, sit down and not move with an “I’m not going to take this anymore” attitude.

Which horse would you rather work with?

Your turn: What motivates you? Do you know of any innovative or effective ways to create culture through motivation? Do you have any bad examples we can learn from?

Organizational Culture is Created by What Leaders Pay Attention To


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Organizational Culture is Created by What Leaders Pay Attention To


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