HRM textbook

CHAPTER 12 PAY FOR PERFORMANCE AND FINANCIAL INCENTIVES 399
Performance feedback means providing quantitative or qualitative information on task
performance to change or maintain performance; showing workers a graph of how
their performance is trending is an example. 30
Studies show that recognition has a positive impact on performance, either alone
or in conjunction with financial rewards. 31 In one survey, 89% of surveyed companies
reported having recognition programs in place, for things ranging from exceptional
performance to attendance, safety, sales, and major life events. 32
Many employers are bulking up their recognition programs. For example,
Baudville, a workplace recognition vendor, recently unveiled an e-card service
called ePraise. Employers use this to remind employees of how much they re appreciated.
Intuit shifted its employee recognition, years of service, patent awards, and
wellness awards programs from several vendors to Globoforce several years ago.
The move allowed us to build efficiencies and improved effectiveness into the
programs management, says Intuit s vice president of performance, rewards, and
workplace. 33
At American Skandia, which provides insurance and financial planning products
and services, customer service reps who exceed standards receive a plaque, a $500 check,
their photo and story on the firm s internal Web site, and a dinner for themselves and
their teams. 34 Most employers combine financial and nonfinancial awards. One survey
of 235 managers found that the most-used rewards to motivate employees (top down,
from most used to least) were: 35
* Employee recognition
* Gift certificates
* Special events
* Cash rewards
* Merchandise incentives
* E-mail/print communications
* Training programs
* Work/life benefits
* Variable pay
* Group travel
* Individual travel
* Sweepstakes
HR IN PRACTICE: INCENTIVES MANAGERS CAN USE As you can see, the
individual line manager should not rely just on the employer s incentive plans for
motivating subordinates. Those plans may not be very complete, and there are simply
too many opportunities to motivate employees every day to let those opportunities
pass. There are three guides to follow.
First, the best option for motivating employees is also the simplest make sure
the employee has a doable goal and that he or she agrees with it. It makes little sense
to try to motivate employees with financial incentives if they don t know their goals or
don t agree with them. Psychologist Edwin Locke and his colleagues have consistently
found that specific, challenging goals lead to higher task performance than specific,
unchallenging goals, or vague goals or no goals.
Second, recognizing an employee s contribution is a powerful motivation tool.
Studies (and theories like those of Maslow and Herzberg) show that recognition has a
positive impact on performance, either alone or in combination with financial
rewards. For example, in one study, combining financial rewards with recognition
produced a 30% performance improvement in service firms, almost twice the effect
of using each reward alone.
Third, the manager can use social recognition (such as compliments) as positive
reinforcement on a day-to-day basis. Figure 12-1 presents a short list. 36