One of the more significant generational differences between our legacy Gen X and Boomer workforce and the Gen Y / Millenials is how they view their relationship with the company (i.e., leadership, values and culture) they work for. In the past, there was a longer view on commitment, and more focus on the ongoing relationship over an extended period of time. Inconsistencies in the workplace, disappointment with regard to the decisions or actions of management were seen in a balance with individual and collective victories. There was a dominant sense of “taking the good with the bad”, given the accepted reality of both.
The point of view of our newest generational group is far more transactional. The prevailing wisdom is “I do this for you, you do that for me.” The longer term perspective is less important, as the day-to-day has taken on a new level of significance. Loyalty is fading, and mobility is seen as a given. If I don’t like what happened today at work, and if it doesn’t change really quickly, I believe I can go find something else to do that will give me more immediate gratification.
As leadership, we exacerbate this transactional nature of employee relationships when we construct an employee recognition process that emphasizes the individual transaction, at the expense of focusing on the bigger picture. Consider how every day, managers acknowledge a subordinate’s activity or behavior with a $5, $10 or $20 gift card. What does that really tell the employee?
For one, it communicates that “what you did today was worth $5, $10 or $20.” In effect, individual performance has been sublimated to a concrete dollar-value. Is the effort expended worth a $5 or $10 valuation? I don’t know. But the simple act of putting a dollar value on it, defines the economic value of going “above and beyond”.
Next, ponder the collateral impact of monetizing acts of exceptionalism. By assigning monetary value to the employees’ performance, you are reinforcing that performance is transactional. In fact, you are making a statement to the employee that there is a quantitative relationship between behaviors and worth to the company. In other words, it is the equivalent of telling the employee, “if you choose to do better than expected, you will be paid $5 or $10 or $20 via a retail gift card.” That is always going to be a losing proposition. The next time the employee is faced with a similar situation, s/he will make the subconscious calculation of effort vs value. Will they make the same decision in view of the precedent that doing so is worth $10 or so to the company? What is it “worth” to them (the employee)?
Finally, there is the aspect of the ongoing versus transactional. We have known for years that transactional relationships are more volatile than established, ongoing relationships. Instead of reinforcing a transactional connection between employer/employees, a more appropriate acknowledgement of is a measure of reward that accrues over time, gaining in value and providing an extrinsic, visible complement to the intrinsic and often unseen drivers behind effort, performance and results. Under this approach, the individual acts of exceptionalism are linked to more enduring, sustained value over an extended period of time.
An effective system for engaging employees in order to engender a heightened sense of loyalty to a company or brand is based on a number of factors occurring in combination, generating synergy with multiple, interconnected points of reinforcement.
The days of one-time, transaction-based recognition are not only gone, the mindset can be very dangerous to the health and culture of your organization. You need to win the hearts and minds of your employees, and that means gaining alignment with the mission and vision of the company, providing a real basis for expanding individual competencies and opportunity to grow, leveraging an ongoing reward and recognition platform that delivers ongoing appreciation by accruing the value of individual (transactional) behaviors via a tangible, and non-cash (or equivalent) rewards, and one that measures what is important in terms of behaviors as well as outcomes.
Gift cards may be fine for your nephew’s birthday. But they could be the undoing of your company’s defined need to build long lasting employee engagement.
Interesting! I’d be willing to research how this affects boomers… toss me a Caribou gift card and I’ll get back to you.
nice post enjoyed it
“Instead of reinforcing a transactional connection between employer/employees, a more appropriate acknowledgement is a measure of reward that accrues over time, gaining in value and providing an extrinsic, visible complement to the intrinsic and often unseen drivers behind effort, performance and results.”
Otherwise known as promotions and raises.