surprising research on employee recognition programs: why you should keep the cash, give the gift, and minimize the menu
I’ve been doing market research for fifteen years now. In nearly every state across America, and in many different countries, I’ve asked respondents a wide range of questions. Despite this significant experience, I can’t remember another time I’ve been as surprised by research findings as I was in a recent study I led about employee recognition.
The hypotheses being tested:
At the onset of the study, we developed a list of hypotheses that aligned with the core purpose of the study. These hypotheses, we believed, were intuitive and founded upon basic principles of sound logic:
- The most important element in a recognition program is the formal recognition event in front of peers
- If given a choice, a majority of people would choose cash over a physical award
- More award options will almost always be preferable to fewer options
Our research methodology:
We conducted qualitative research, including interviews and focus groups in nearly every major metropolitan area in the United States. We asked respondents about the degree to which their work was valued, how their employers showed appreciation, and what types of recognition was most effective. As expected in qualitative research, we heard a number of different answers.
We took the results and designed a robust, 600-sample survey, using proven methods to ensure survey respondents understood the questions the way they were intended to be read. We approached the topic of recognition in a comprehensive and unbiased way. And, we designed the sample and analysis in such a way as to ensure that results from the sample were generalizable to the population of U.S. employees.
Much to our surprise, each of our three hypotheses was proven false:
- The most important element in a recognition program is NOT the formal recognition event
- A majority of people would choose a physical award over cash
- There are diminishing, and even negative returns to growing award menus
How can these counterintuitive results be right? That’s answered by understanding what outcome a leader wants from employee recognition. If you want your employees to feel like consumers, go ahead and give liquidity and unlimited choice.
However, if you want your employees to have long-lasting feelings of being appreciated, then keep the cash, give the gift, and minimize the menu.