Most companies think a bonus is just a bonus. However, in an interview with Harvard Business Review, economist Robert Dur argues that a recognition and rewards programme needs to be carefully designed to steer employees in the right direction.
According to Dur, many organisations still underestimate the potential of recognition and rewards for strategically influencing employee behaviour. Where organisations often go wrong is failing to align their programme with their broader organisational strategy. Programmes that work well are structured and consistent, and are backed by a clear strategy and well-defined performance standards.
'A reward and recognition system is a bit like a compass that directs people's attention, time, and energy,' Dur explains. Yet he often sees a striking mismatch between what organisations claim to prioritise and what their recognition programmes actually reward.
This is especially relevant in organisations with employees from different generations, where understanding what motivates each group is key to designing an effective programme. Younger employees, Dur notes, tend to respond better to financial rewards, simply because they need the money more, while older employees are often motivated by different approaches altogether.
But for recognition and rewards to truly be effective, Dur says, they need a human touch. Without it, the gesture can feel repetitive or robotic instead of genuine.
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For more information, please contact Ronald de Groot, Media and Public Relations Officer at Erasmus School of Economics, rdegroot@ese.eur.nl, or +31 6 53 641 846.
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