Recognition and Rewards Are Two Different Things
It’s about time someone demystified and explained the differences between recognition and reward. Recognition and reward are two completely different things and are used for different purposes. Some people and their organizations tend to see the two as being one and the same. I’ve seen way too many managers and employees not understanding either the subtle, or even the more obvious, differences between rewards and recognition. Unfortunately, even professional and industry trade associations perpetuate the problem with no uniform vocabulary or definition.
Okay, so take the Incentive Marketing Association (IMA). They define recognition based solely on their focus on incentives as “something, such as the expectation of reward, that induces action, or motivates effort.” Great! Recognition is even called a reward. Confused?
Often recognition gets dumped in the lap of human resources. Let’s find out how the Society for Human Resource Management (SHRM) defines employee recognition. SHRM says recognition is “an acknowledgment of employee achievement” and can be public or private. Good. That makes sense. Unfortunately, just when you thought you understood what recognition is, the SHRM folks go on to say that recognition can also involve either a monetary or a non-monetary reward. There’s that reward word again!
Recognition Professionals International (RPI) clearly differentiates between rewards and recognition. Take a look at how they delineate things on the reward and recognition spectrum:
- Incentive | Contingent reward based on achievement of pre-determined results within a specific timeframe.
- Award | Item to commemorate specified achievement (Non-monetary)
- Reward | Item for meeting pre-determined goal (Sometimes monetary)
- Recognition | After-the-fact appreciation for desired behavior, effort, or result that supports goals and values
If you are still having a hard time, here is how I define both recognition and reward.
Recognition is mostly an intangible expression of acknowledgment and valuing of an individual or team. When do you give recognition? When you recognize people for their positive behaviors, their personal effort, and any contributions they have made.
Rewards are tangible, monetary, or experiential items given to a person or team. You’ll find rewards are mostly given in return for reaching pre-set goals, a significant achievement, or some special service. Leadership can use rewards and recognition more effectively once they are armed with the knowledge of their similarities and their differences. Each is a motivational tool that has a significant impact on employee attitudes and behaviors but in different ways.
A Closer Look at Rewards
Let’s take a financial services company as an example. Employees here provide direct financial sales services to clients and are rewarded with monetary bonuses for reaching sales targets. Additional cash or tangible non-cash rewards may be given for generating the highest total revenues within a specified time period. However, such rewards are more a part of the compensation structure where if you produce “x” results, you will receive “y” rewards. Rewards are demonstrably more transactional in nature in that you know if you do this, you will get that.
Reward bonuses are more tangible in nature and involve little personal interaction. They simply end up on a paycheck with no fanfare or long-lasting trophy value.
Some Insights on Recognition
Recognition relies heavily on the personal practices of individuals who become both givers and receivers of positive feedback and acknowledgment. What is interesting about recognition in contrast with rewards, is that recognition is a surprise; you never know you are going to receive recognition. It is also, or should be, highly personalized and meaningful in its delivery. Recognition is very relational in nature. Even using online programs to show appreciation through e-Cards or social media platforms can be effective, and can be done privately or public according to the preferences of the recipient. This authenticity is critical if recognition is to be effective.
While I have defined recognition as mostly an intangible expression of acknowledgment, there will be times when a token of appreciation fits the occasion. Again, these tend to be highly personalized to the individual being acknowledged, such as a favorite book or preferred food item.
Recognition can include anything from acts of verbal acknowledgment and handwritten thank-you notes, to giving restaurant gift certificates or time off from work. A wealth of no-cost and low-cost ideas exists.
The Language of Recognition
Gary Chapman and Paul White, in their book, The 5 Languages of Appreciation in the Workplace, highlight the need for quality time with specific people at work as a meaningful way to appreciate them. They also suggest each of us has a primary and secondary “language” of appreciation, as well as a specific language we absolutely dislike.
Their research shows that of the five languages, Words of Affirmation, Quality Time, Acts of Service, Tangible Gifts, and Physical Touch, Tangible Gifts are the least preferred with only 4% to 9% people identifying with this approach. Words of Affirmation is the highest primary language preference at around 40% to 45%. Notice that’s still NOT everyone.
Try to decouple recognition from reward and then use each of them wisely at just the right time to motivate your people. Remember, when you are giving recognition you don’t have to give a reward, but whenever you give a reward you must always accompany it with recognition.