In the 1980s, Soviet geologists were mysteriously drilling many shallow holes in a purported search for oil deposits. Since most of the oil in Russia lies deep underground, their efforts were unsurprisingly rarely successful. But the reason for it is instructive: They were paid based on a quota, and given bonuses if they exceeded it. But the quota wasn’t for feet drilled – it was number of holes!

Your employee recognition program could be just as fruitless if you do not make sure you have the right metrics and incentives in place. An effective employee recognition program requires knowing why, when and how to reward your employees.

Performance metrics matter

For recognition to be effective, your company should reward employees based on metrics that set clear goals and measure profitable achievements. Avoid these two metrics traps:

Recognition based on the wrong accomplishments

It is basic economics that all sales are not created equal. If you reward employees based strictly on the quantity of their output or products sold/services rendered, rather than quality and profitability, you are missing two opportunities. First, your company’s bottom line will suffer when you reward workers who superficially appear to be productive, like in the example above, but really aren’t doing much to help the company. Second, you are teaching your employees that you value only the outcome, when in fact, one of the objectives of a recognition program is to guide and shape behaviors and actions that lead to the goal. Make sure that your employees understand that you value quality of work first.

Recognition not based on any performance metric

Recognition based on no performance metric at all doesn’t work either. Many younger workers come from the “everyone gets a trophy” generation, expecting recognition for mere participation. But when everybody “wins” at the workplace, accomplishing goals can hold less meaning; your employees won’t know what your company values. Recognition should be directly related to metrics of performance, which you communicate clearly to your employees.

How and when you recognize an employee also matters

Your employees care about how and when you deliver recognition. Keep this in mind and you will avoid these recognition program pitfalls.

Token recognition. Promotions should be one of your most effective ways to recognize a high-performing employee. A fancy new title, however, without a commensurate pay raise or additional perks, will have the opposite effect, leaving your employee frustrated, resentful and demotivated. If you give an ambitious employee a promotion in title without the responsibility, salary and opportunity to excel at another level, you could find yourself with a retention problem instead.

Untimely recognition. Since today’s workers switch jobs frequently, they might not be around long enough to be recognized for their contributions. Recognizing employees immediately after a recognition-worthy behavior has taken place is key. Timely recognition reinforces the connection between the good behaviors and the rewards. Something else to consider: If your company’s employee recognition program requires several layers of approval before the employee is recognized, the recognition may not come in time, or at all. Setting intermediate, less bureaucratic forms of recognition will help with both performance and employee retention.

Impersonal recognition. Automated or computer generated recognition is quick and easy but are devoid of emotion. Recognition should express enthusiastic appreciation, which means, the human touch should be a standard component of your recognition program. Your employees know your voice and your tone, so make sure you deliver a message that feels authentic and honest.

One-size-fits-all recognition. Your employees are individuals so tailor your recognition to their needs and wants. Not everyone is wired for lavish praise so public recognition could be mortifying for some of your workers. Get to know your employees and recognize them in ways that will have meaning to them.

Humor is risky. Not everyone gets the joke and humor can backfire. What is funny to you may be insulting or demoralizing to your workers, especially if they are expecting more substantial recognition. Choose safer and more effective ways to articulate your appreciation.

The right recognition program matters

While the road to a successful recognition program is not easy, it is worth the effort. You can navigate potential pitfalls, giving your employees the motivation and rewards they appreciate. Remember, the idea behind a recognition program is to achieve certain objectives, not accomplish the opposite.

Make sure that your employees have a clear idea of what you expect of them and recognize their efforts in a timely and effective manner. They will reward you with their hard work and loyalty, decreasing your costs and increasing your bottom line.

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