A Paycheck Is Not Recognition for a Job Well Done
One statement sure to raise my ire when discussing the Power of Thanks in the workplace is: “They get paid to do their job. That’s recognition enough.”
Long TailIt’s a patently false statement. Pay and recognition serve very different needs, but they are in a symbiotic relationship when it comes to fulfilling those employee needs. All the recognition in the world won’t help resolve an underpaid employee’s base needs in terms of Maslow’s Hierarchy. And pay raises, consistently and appropriately given, won’t meet the higher-order employee needs, either. But used together in a balanced way, compensation and recognition achieve goals for employee satisfaction, engagement, productivity, performance and retention.
I tend to think of the two in balance as represented in the graph above. Pay increases represents the green area – more money invested, but with a shorter-term impact. Strategic recognition, represented in the yellow area, requires less monetary investment, but has a much longer and lasting impact.
Ben Eubanks recently shared some observations from a Freakonomics episode on behavioral science (quoting):
There is some correlation of pay vs longevity: pay enables people to stay longer. Data shows that a 10% increase in pay delivers a 5% decrease in quitting behavior.
You know that “warm fuzzy” feeling someone gets from a raise? Research shows that feeling only lasts 1-4 weeks.
Wages are a lever you can use to drive behaviors, but other things keep your turnover low, and are less costly. For instance, finding better supervisor fit is a great opportunity.
But seriously, how important is a supervisor in the employment relationship? The supervisor accounts for about as much reason someone will stay as all other factors (culture, job, wages, etc.) combined. Huge.
Compare that to recent findings from the American Psychological Association (APA). The APA recently recognized six organizations for healthy workplace practices, identifying 5 factors that employees say their organizations value most:
Healthy lifestyle / well-being (92%)
Employee recognition (91%)
Training and development (91%)
Work-life balance (86%)
Employee involvement (84%)