Cindy Ventrice is a management consultant and workshop leader with over 20 years of experience in a wide range of industries. She spoke to dozens of company managers in compiling the tips that make up her book Make Their Day! Employee Recognition That Works. In this interview she provides guidance for owners and leaders to assess the quality of their current recognition programs and identifies the traits common to leaders offering effective employee recognition.

What can small businesses, who may not have the funding or resources to compete with larger firms in terms of employee incentives, do to motivate their employees?
The good news is that, in terms of recognition, money is not a significant factor. Once employees have what they consider to be a fair wage – in other words, they’re at 75 percent of the industry standard for their geographic area – money is not really a factor in how motivated they people are, how willing they are to stay and how valued they feel in the workplace. Then it comes down to non-monetary concerns like:

  • Are they treated appropriately?
  • Are they given information in order to do the best job they can?
  • Do they feel trusted?
  • Do they feel like their opinions are valued?
  • Are they getting chances to develop and grow? (Is anyone acknowledging that they are making a significant contribution?)

All of those things matter far more than money does.

How can an owner or leader assess the quality of recognition currently offered in his or her workplace?
That depends in part on the size of the organization. With extremely small companies – for instance, those with fewer than 10 people – you don’t really want to be doing surveys with employees. It will seem uncomfortable and impersonal. In that case, it’s going to be about having conversations and building up enough trust with people to know that they’re giving you honest answers.

This kind of honest feedback can take time; it’s built up in small, incremental steps and it’s about the questions you ask and your reaction to the responses. If an employee brings you a small-scale issue, react to him or her promptly and positively. Then they’re going to feel comfortable bringing you something else a little bigger the next time.

How do business owners and leaders sort through all the guides and ideas that are out there to determine an effective approach to recognition?
First, I would give them a word of warning: Almost 90 percent of big companies have recognition programs that they spend billions of dollars on every year, and yet only 40 percent of their employees report that they’re satisfied with recognition. So many, many programs go wrong.

One of the things I talk about in organizations is the “50-30-20” rule, which addresses the source of recognition that employees want to see. They have a preferred mix:

  • Twenty percent of recognition is organizational – things like asking somebody’s opinion, being transparent in your business processes and giving out service awards.
  • Thirty percent of recognition can come from peers. Many companies will put peer awards into place when they feel that employees are not getting enough recognition.
  • Fifty percent of recognition has to come directly from the manager. I typically recommend that companies start with the manager, which means giving them training and holding them accountable for seeing a difference in employee satisfaction.

This training for managers should focus on four basic elements of recognition, which are based on my interviews with employees on what they found as valued recognition: Praise, appreciation, respect and opportunity.

What traits do managers offering effective recognition share?
They have a willingness to have an open dialogue with their employees and an ability to offer more positive feedback than negative feedback. Trust is also big among those leaders – they trust their people and assume that they’ll do their best work until proven wrong.

They’re also able to give employees challenges that are incremental – that are a stretch without being overwhelming. Often, they know what their employees are capable of more than the employees do themselves. They also know what their people’s strengths and weaknesses are, and they’ll talk about those [qualities] and assign responsibilities around them. I’ve seen employees get excited because their boss was open with them about areas of competence and areas of improvement around a specific project, when the boss has set up the next project to leverage the employee’s strengths from the last one with some things that need to be worked on. That ability to blend what’s best for the company with what’s best for the employee is really critical – and it’s a skill that I’ve found many managers do not possess.