True performance success comes from and through employee recognition. Visualize a management structure, and it will run vertically. Managers push people from the top down, and people push back. Gravity makes things happen when it presses against human inertia. If that’s the way you see things, you will see no motivation or likelihood of success.
In early management time studies, efficiency became the key performance indicator (KPI). It took almost 100 years to change that KPI to quality. Unfortunately, that shift from performance efficiency has made little difference in the motivation of sales reps. The need to reassess sales rep motivation is overdue, and the reassessment starts with understanding the nature and value of employee recognition.
ROI and employee engagement
The Incentive Research Foundation studies the role of employee appreciation in increasing the business return on investment (ROI) in human capital.
11% of workers demonstrate a strong commitment to their organization.
13% perform at a minimal level.
76% remain “up for grabs” – waiting to have engagement challenged and raised.
Increased employee engagement directly influences employee retention, performance, and profits. Human Capital Management Index (HCMI) studies also indicate that a culture of employee recognition creates a self-perpetuating climate of engagement and motivation – more effective than compensation or incentive drivers prove.
The recognition culture
Make employee recognition a business-wide commitment. Employee engagement will not succeed when left to one operational silo or another. You cannot confine it to the manufacturing floor or the sales department; you must integrate into the business behavior as a whole.
- Align performance behaviors with mission, values, and objectives. Sales motivation, for example, can be linked to customer service,
- shipping and receiving, inventory, and more.
- Recognize behaviors frequently, formally, and informally.
- Educate all stakeholders in the cross-function and cross-impact of employee engagement.
- Measure and report the cost and effects of employee recognition on ROI.
Recognition sustains performance
- Forbes reports businesses spend $42 billion or 1-2% of payroll/year on what they call “recognition.” 87% of that is spent on rewarding tenure (10 years’ service) or event-based performance (employee of the month). This does not recognize sustaining performance.
- Recognize correct performance. A recognition culture rewards right behaviors that produce identified outcomes. Sales leadership should single out the sales rep that solved a problem, achieved a specific goal, or led a team achievement.
- Institutionalize the achievement. Sales success is the stuff of legends. Top sales rainmakers re-tell about their victories. Making, publishing, and repeating anecdotes about individual and team performance will reinforce what the business wants, respects, and compensates.
- Enable frequent easy recognition. Effectively recognizing recognition defines, clarifies, and promotes the desired behaviors. Simple comments, shared emails, public announcements – there are a 100-plus ways to recognize people, performance, and profits.
For example, a sales manager once rewarded a sales rep with a whispered order to take his wife to dinner and report it as a dinner with a client. This “reward” promoted unethical behavior. The sales rep and his wife may have enjoyed the dinner, but there is no sustaining recognition in this. Effective sales leadership would: (1) personally host the sales rep and his spouse; (2) make a public announcement of the award; and/or (3) direct the sales rep to spend the equivalent financial award among his peers.
The deepest principle inhuman nature is the craving to be appreciated.
We all love crave applause, especially from those around us. It’s selfish and self-satisfying, but it works. Peer-to-peer recognition works effectively when sales leadership:
- Recognizes specific and measurable behavior when it is known.
- Directs the reward to the means and ends of the sales campaign.
- Presents awards proportionate to the effort and outcome.
- Time attention to the person and event so it does not appear automatic.
- Tie Incentives to employees’ perception of value.
Today’s employees are more inclined to seek and value social recognition than to concede to hierarchical pressure, more likely to be moved by an attaboy from a co-worker than a gift certificate from a boss. Peer-to-peer motivation remains the most cost-effective reliable performance motivator.
New Research Unlocks the Secret of Employee Recognition by Josh Bersin, Forbes
The Value and ROI of Employee Recognition, Incentive Research Foundation studies
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