It makes sense that when businesses recognize their employees with awards. They will likely see an increase in their morale, and maybe even inspire employees to be more productive. Sometimes, rewarding employees who have good behaviors can be counterproductive and result in a decline in productivity and motivation.

Over 80 percent of employers hand out awards for work, such as “employee of the month” or “top salesperson.” The majority of managers consider these awards to be inexpensive ways to boost worker performance. Many think that when workers feel the gleam of their company’s praise and rewards. They motivate to perform better for the long haul.

New research suggests certain awards could have the opposite effect as per a new study title. The Dirty Laundry of Employee Awards Research from the Field composed by Harvard Business School Assistant Professor Ian Larkin. Along with Professor Lamar Pierce and doctoral student Timothy Gobbler from the Olin School of Business at Washington University in St. Louis.

The researchers studied a presence award program initiated by managers at one of the five commercial-industrial laundries kept by the same Midwestern company. The definition of perfect attendance was not having unjustified absences or tardy arrivals to shifts throughout the month. expert in the energy industry

The plant’s managers had the right intentions when they introduced the program of awarding employees. In the United States, tardiness and absenteeism cost US companies up to $3 billion annually. In the case of the laundry facility workers, the tardiness of one employee or absence may affect another’s productivity. If one worker is not working as efficiently as an example, then others in the line are left at a standstill.

STELLAR EMPLOYEES

The company’s attendance reward program began in March of 2011 and ran through nine consecutive months. Employees who maintained excellent attendance throughout the month. This includes no unjustified absences or tardy arrivals to shifts were entered in a raffle to win a gift card to a local eatery or store. The winner’s name was announced in a public meeting that was attended by all employees. Then, at the end of the sixth month, the plant manager held another drawing to win an amount of $100 in gift cards to all employees who had excellent attendance records during the preceding six months.

The program produces one of the benefits plant managers had been looking for. It reduces the typical amount of tardiness. And also resulted in more punctual work for the workers who took part. The workers might have believed that the program for awarding awards was unjust. They were being in time prior to the attendance policy. So they might be wondering why they require an award. Also, the reason why certain employees who were known to arrive late receive the award.

Overall the award program resulted in a reduction in productivity of the plant by 1.4 percent that added up to almost 1500 dollars per month to the company.

Having your top performers demotivate for all eight hours on the job end up creating a much larger productivity hit than having the additional five minutes of work from someone who came habitually late. In the end, they conclude that rewarding a particular behavior could “crowd out” intrinsic motivation in a different. The goal is that through a prize you get them to do what you want them to do in a habitual way. There was only a modification in behavior while people were fit for the award.

Airing Dirty Laundry

But after Larkin and his coworkers looked at the timesheets of employees and the reports detailing how much laundry was done prior to and after the introduction of the program and they discovered that the facility. Unlike the other four that did not have an award system. faced several issues:

Then, they began “gaming” the program, arriving on time only when they could be eligible for the award. And, in some instances making a sick call rather than making it to work on time. It was also interesting to note that workers were more likely to experience an unexpected “single absence”. After establishing the award suggesting that employees. Who otherwise would expect to work late on a specific day may rather take a sick call in order to avoid disqualification. Or choose to stay home since they still are disqualified from the award in any case. Union of Oil and Gas

In addition, even though time management improved during an initial couple of months under the plan the old habits of tardiness began to show up in the following months. When employees were shut out and the incentive of the prize was not within their grasp the punctuality of their employees fall over into a downward spiral. Larkin states that this is contrary to the belief of some that the award programs could create a long-term pattern of punctuality in employees.

And, perhaps even more importantly, employees who are previously demonstrating great attendance and were extremely productive suffering an average 6-8 percent reduction in productivity following the introduction of the program. This suggests that the employees are turning off. And their motivation waned when managers announced awards for the excellent behavior that they had already been showing.

Rewards that are effective

Although this specific award did negative consequences, other kinds of awards have proven to be beneficial for businesses. However, Larkin suggests that corporate leaders be able to monitor them carefully to make sure that employees aren’t playing the system and also that the programs don’t have undesirable negative consequences.

Many award programs are creating more value and are cost-effective for companies. You cannot say awards are good or bad. It depends on how they implement it.

The particular attendance award could be particularly flawed since instead of rewarding workers for outstanding performances.

Many awards are dedicating to identifying people at the top of the class or people who went the extra mile. This award did not recognize people who went beyond. It was an honor for behavior that employees must do.

Additionally, Larkin believes that awards are more effective when they are recognizing positive behavior from the past. And not the behavior that is expectable in the future to be observable. Additionally, awards for past performance will not be able to support the same amount of gambling, he says.

It’s motivational to hear that you’ve done a good job and are recognizable for doing the right thing. In addition, it provides a good example for other people. People are not being happy because they change their behavior to match.

What the manager wanted or by gaming.

Larkin claims that in the study of laundry The reward itself. Which is gift cards, may have contributed to a greater probability of playing. Sometimes, it’s better to take the money out of the transaction.

People respond very strongly to monetary motivations with this gaming mentality, the researcher states. When I talk to firms about award programs. I find myself telling them, ‘Don’t put in that $500 or the trip to the Bahamas. However, Larkin says that companies might be better off awarding employees with a nice plaque or sending out an email to employees, or arranging a meeting to acknowledge certain employees in public earlier than the entire team.