Recognition

Recognition is important to every organization, but must be carefully done to avoid harm. Recognition should be reserved for those whose behavior exemplifies:

-Superior service
-A positive attitude
-Good attendance
-Effectiveness
-Innovation
-Initiative
-Loyalty
-Leadership
-Teamwork
-Efficiency
-Quality

Every recognition system should have a process that fairly and reasonably reconciles performance gaps. This happens when employees fall short of their marks for exceptional reasons or supervisors fail to clearly specify expectations.

I have been a participant of many incentive programs that seemed designed to deceive people into being motivated. The deck seemed stacked in our favor early in the year, but seemed to slip quickly away as the end of the fiscal year neared. It turned out that headquarters designed systems that were easier to meet initially, but incredibly difficult at the end of the year. In the end, we felt deceived and betrayed. One program after another seemed to do exactly the same thing. Soon everyone started wondering how headquarters got us the next time an incentive plan came around.

The program that has been in place since 2004 contains various loopholes. It is comprised of many variables outside of a managers’ control, leaving them at the mercy of their workers and headquarters to decide what kind of bonus/raise they received at the end of the year. Revenue projections for each office failed to take into account the economic constraints of each. A small office stumbled financially when a single business closed. You could ask for reconsideration based on this argument but you were unlikely to get a positive ruling from your boss. Worse yet, if you decided to appeal his or her decision, it went back to them and then on to their boss. Their boss just rubberstamped the same decision for them. Exceptions were possible but I never heard of it. This motivation system failed to accomplish anything but de-motivate managers.

A larger problem was that a person could easily see where their bonus was approximately going to be months in advance. Some that knew their fate figured that if he or she were going to fail why not fail larger and make it easier the following year. This system could fail you year after year, even when you tried earnestly to do the best you could. Potentially, you could be raising your bar of expectation year after year without ever getting a decent raise. In fact, this is where many managers fall every year, despite any level of effort. Ideally, all superior achievers could reach the top. This system left little in your control and left many things to luck or circumstance. It was simply a losing proposition.

The objectives you exchange with your boss are not the same ones your raise depends on. They were goals that were to be achieved in addition to the many already determined by headquarters and the area. The program determined your raise through a weighted average of local goals (70%) and corporate goals (30%). The local goals were comprised of:
- Revenue (35%)
- Total work hours (35%)
- Scan rates (20%) – comprised of two different components
- Customer Satisfaction Measurement (10%)

The corporate goals included 10 different objectives, well outside the control of a single manager, especially those in small offices.

Problems:

- Work hours depend in part on environmental factors, retention, and training. Unfortunately, training hours counted against your performance and discouraged it. Once I had to fire an employee and the office worked shorthanded until a new employee was hired. This affected the expenses of the office and counted against my performance. Budget adjustment requests were denied. Additionally, new employees required forty plus hours of training before they could begin productive work. In a small office, this single-handedly blows the work hour goal apart. There are supposed to budget adjustments for such items, but there is no guarantee that you will get it. In fact, one year after promises of numerous adjustments I received none at the end of the year and my boss made no adjustment for it.
- Scan rates didn’t account for pieces that wouldn’t scan; no efficient tracking program was in place to find problems.
- Too many objectives (five local + 10 corporate) many of which are outside the realm of influence by managers.

A well-designed incentive-pay plan can bind people and objectives together, offering a significant advantage in the competitive marketplace. On the other side, a poorly designed plan can de-motivate. If there’s a flaw in the plan, it will be found and exploited. Likewise, if the plan contains variables out of the managers control, it can have an adverse effect. For example, one incentive plan I know of is based largely on achieving certain revenue goals. However, revenue goals for large and small offices aren’t equally achievable. When you’re in a small community and a single business leaves, your goals can become impossible. Larger offices, on the contrary, have other businesses that they can pursue for additional revenues.

There is still one way for the upper manager to spare the harmed supervisor and that is by making an exception for this occurrence. They need to consider what the revenue would have been had the company not pulled out and everything else had been the same. When the upper manager refuses to consider this exception the supervisor loses faith in the program and the manager. This is exactly what the incentive program was supposed to eliminate. When you dock others for things out of their control you are really saying “I don’t value you or care for your explanation.”

Incentive plans should have goals that are simply stated, have no hidden agenda, and be easy to track. If you can’t pinpoint the source of the problem(s), the variable shouldn’t be included in the incentive plan. You must be able to affect the outcome for it to be a variable in the incentive plan. Unachievable expectations that are outside of a persons control, does nothing but irritate and demoralize employees.

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