Employee Recognition Should Consider Personal, Generational Preferences

What is the best way to recognize an employee’s outstanding work:

• A gift card for a NASCAR driving experience?
• A thank you card?
• Asking the boss to attend a meeting with your employees during which you thank them for their specific contributions?

The answer is it depends.

Acknowledging employees’ work and behavior is an important retention strategy, SHRM Online reported in March, but organizations need to keep in mind generational preferences and the importance of the personal touch.

That’s what Kevin Yip and Taylor Smith, co-founders of Blueboard, discovered when the San Francisco-based provider of experience-based employee rewards and recognition began creating its offerings two years ago.

Millennials (people born between 1980 and 1995) tend to be drawn to novel experiences, such as eating at an exclusive, pop-up diner or participating in a James Bond-type event that includes jumping out of a plane, driving around in a luxury sports car and learning to mix the perfect martini. They tailored Blueboard’s offers accordingly but found that older employees prefer rewards they can share with loved ones—a couples massage, a romantic wine cruise, taking their family to a theme park—and added rewards programs that met those needs as well.

Employees can be recognized for a variety of reasons, such as years of service, outstanding performance, certification or degrees attained, and retirement. But even “pat on the back” recognition for an employee, while universally appreciated, needs to keep generational differences in mind, according to a July 2015 report from the Incentive Research Foundation (IRF).

Baby Boomers (those born between 1946 and 1964) like formal recognition in front of teams or groups, while Millennials prefer the recognition to reflect a “spirit of fun, with less formality and more frequency,” Allan Schweyer writes in the IRF report Generations in the Workforce & Marketplace: Preferences in Rewards, Recognition & Incentives. Members of Generation X (those born between 1965 and 1979) prefer receiving recognition privately or within a small group.

“Knowing how the workforce breaks down by generations, combined with a good knowledge of the general differences between the generations, can make [reward] designers more effective in creating incentive programs and in engaging employees and customers on a day-to-day basis,” Schweyer wrote. “Effective managers can combine this information with what they know about the life stage in which each of their employees resides, bringing even more clarity to the design of incentives, for example.”

He pointed to the City of Claremont, Calif., as an example of an employer that takes differentiated benefits and rewards seriously. It developed a suite of rewards, incentives and recognition after analyzing motivational differences between Boomers, members of Generation X and Millennials in its workforce. Incentives aimed at Boomers, for example, include a two-week sabbatical upon reaching 10 years of service; the time away can be combined with annual leave.

The University of Washington’s HR department in Seattle offers a long list of recognition ideas that range from giving a gift that relates to an employee’s hobby or interest, to treating the employee to lunch, to arranging for the employee to spend a day with an in-house “expert” to learn more about a specific job skill they are interested in.

Blueboard’s Smith thinks employee rewards are most effective when they make some type of impact on the business and “build an emotional bond between the company and the employee.” Not doing so can lead to disengagement.

Yip recalled logging long hours on a special project for a former employer; his work took a toll on his relationship with his girlfriend and on his health. When the project was completed, his manager thanked him and gave him a $200 gift card.

“It was incredibly impersonal,” he said, considering the manager had heard him lament his 20-pound weight gain and time away from his girlfriend while working on the project. While the gift card was well-meaning, it was tantamount to getting a present from the aunt or uncle who doesn’t know you very well.

“She knew me as a person,” he said, so he felt she could have spent the same amount of money on something he would have valued more, like a monthlong gym membership or paying for dinner at an upscale restaurant for him and his girlfriend.

Organizations need to make recognition a priority, Yip told SHRM Online. “It’s not something they can just check the box [on]; it’s a habit [they need] to drive organizationally. What do you want to achieve?”

A 2015 Society for Human Resource Management survey found that employee recognition programs had a positive impact on employee engagement, happiness and workplace relationships. To be effective, recognition should be meaningful, timely and available to all levels of employees.

“HR’s role in all of this is making sure, and communicating to the whole organization, that recognition is a priority and ... giving them the tools to say ‘thank you’ in a meaningful way,” Smith told SHRM Online. “It’s really building a habit” of recognition.

Kathy Gurchiek is the associate editor at HR News. Follow her @SHRMwriter.