Galleries

The shocking truth about Employee Reward and Recognition Systems

Written by Derrick C Darden, PhD
Photo by Sharon McCutcheon

Reward and recognition is a proven way to reinforce desired behaviors that epitomize a company‘s culture. But what if the company’s values are distorted and abused by manipulation, pressure tactics, and an acceptance of concealment of information from customers? Many of us see this behavior happening in front of us, yet we refuse to speak up for fear of retribution from our superiors. Even if we don’t say anything, we buy into the bad behavior. There’s a pattern in many cases, a link between unethical behavior, abuse of incentive monetary reward/recognition systems, and organizational cultural norms.

Studies have shown that reward and recognition systems can be a great motivator and an effective way for companies to encourage employees by rewarding and recognizing their achievements. These systems can promote higher performance, engagement, and commitment in the organization. Employees who feel intrinsically valued increase the company’s productivity and retention and reinforce the company’s cultural norms. A survey of employees in four different professions (ground workers, librarian clerks, intake receptionists and medical record assistants) conducted by East Carolina University found a strong correlation between effective motivators – such as  good pay and recognition – and benefits to the workplace Mani (2002). So, reward and recognition works, and industry has put heavy emphasis on praising and recognizing employees’ achievements to promote desired behaviors and organizational norms.

However, the recklessness of a few can transform a perfectly legitimate incentive program into a widespread unethical behavior promoted by the upper management. For example, at the height of the mortgage-backed securities crisis in 2007 and 2008, many financial institutions lost billions of dollars in subprime loans. During the government’s initial investigation, UBS, the largest of these financial companies, acknowledged that part of their massive losses were a consequence of large bonuses for their upper management. The company had promised large bonuses to traders, encouraging them to create mortgages faster to satisfy the gluttony of investors. Many reputable lenders such as Wells Fargo, Morgan Stanley, and Bank of America, to name just a few, all loosened their standards to make loans available to everyone, even those who could not afford them. People with low credit scores and low incomes were sold prime mortgages. Of course, a new phrase was introduced: predatory lending. These financial institutions didn’t verify incomes, but offered adjustable mortgage rates to people who only paid the interest on the loan, but didn’t know the loans would require full payment a few years down the road. Predatory lending caused thousands of people who could not afford their mortgages to walk away for their homes. These companies lost billions, and the American people had to bail most of them out.

In 2011, the Department of Veterans Affairs’ top official began an investigation into why veterans had longer than normal wait times to see the doctor. Many veterans died while waiting to see their doctor for follow-up care or primary care. At the conclusion of this investigation, it was found that many VA employees had covered up faulty patient care procedures used by the VA and that a bonus plan had contributed to unethical behavior. The investigation found that the connected hospitals under investigation had found employee bonuses were connected to the scheduling of patient care; additionally, incentives were paid to doctors to reduce follow-up care to patients. As soon as he learned of this crisis, the Secretary canceled the performance bonus plan. Obviously, he saw the connection. After a large public outcry, Veteran Affairs Secretary General Shinseki handed his resignation to President Obama. In his resignation speech, the Secretary said, “I can’t explain the lack of integrity among some leaders of our health care facilities.” Lives were lost because of unethical practices.

What causes people to act unethically in the workplace? In a Harvard article, a psychologist points out three areas or factors that cause people to cross the unethical line:

Omnipotence – Employees may feel they are above the rules and are entitled to act in the way they want. Left unchecked, the trickle-down of wrongdoing will become a burst of unethical behavior, especially in the workplace. My mother used to say, “Birds of a feather flock together.”   

Cultural Numbness – Playing by another’s rulebook, even when it’s deviant in nature. No matter how high your moral and ethical compass, you keep hanging around, and you gradually begin to accept bad behavior as the norm.

Justified Neglect – Ignoring wrong behavior without speaking out because of fear of losing your sure footing with the powerful boss or manager.

Reward and recognition systems are excellent ways for organizations to promote desired cultural norms and maintain a competitive edge. But these systems can be abused. That’s why all employees must be trained in organizational norms, ethical conduct, and proper behavior. We know that so-called people of high morals may choose to neglect and or ignore improper behavior – and that a lack of ethics can destroy people’s lives.

In other words, unethical behavior can significantly increase the cost of doing business.

What are your thoughts?  

Reference:

Mani, B.G. (2002), “Performance appraisal systems, productivity, and motivation: a case study”, Public Personnel Management, Vol. 31, pp. 141-59.

Lead by example: to lead change, leaders must change from within

We’ve all heard the phrase: “Lead by example.” In battle, the troops must see the Army Officer in front of them, leading them boldly towards their objective. The leader exemplifies courage, selfless service, and inspires trust in his followers.

Example-setting is the only way a leader will get his followers to buy into his plan. Albert Schweitzer said: “Example isn’t the main thing in leadership – it is the only thing.”

Most people are visual learners, not verbal learners. Good communication makes the vision clear, and good modeling makes it come alive.

A leader must want his followers to model the desired behavior. How do you do that? How, as a leader, do you get your followers to exhibit the you want to see? The answer is simple: be a leader, not a naysayer. Leaders must lead themselves first.

To do this a leader, a manager, supervisor, team leader – whoever aspires to lead – must have self-awareness. They must know their weaknesses and their capabilities before barking out orders. But building awareness about one’s habits of thought, emotions, hopes, and behavior is a task. Leaders must know what makes them tick, their beliefs, their priorities, their aspirations, values and fears (Boaz and Fox, 2014)

Most leaders want status, but not the responsibility. Are they at that level to get more pay and more status, or to get themselves and others to buy into the organization’s mission, vision and goals?

We have a biblical example of this in Kings II Chapters 22 through 23. King Josiah ruled Judea for 31 years. When he was 18 years old, he was in the midst of a restoration project of the temple of God, where a scroll of the book of the law was found by the high priest and was given to the royal secretary to be read to King Josiah. When the king heard the words of the law, he immediately tore his robe. In the Old Testament, this was a sign of repentance, remorse, and despair. Josiah was known as a very righteous king, yet through the word of God, he repented and became aware of his own sins towards God. Here you see how the king Josiah (leader) made a change within himself (self-awareness). His internal reform brought about the internal reform of his people, which led to the restoration of God‘s covenant throughout Judea.

How inner awareness affects the leader’s outer change

People do as they see, so the leaders’ actions speak louder than words. As mentioned previously, the example isn’t the main thing – it is the only thing. Organizations that want to implement new strategies create new policies and procedures. But the new processes will fall short if the leader does not exemplify the desired change. In their research, Boaz and Fox indicate that new strategies often fall short because of a failure to inspire the “underlying mindsets and capabilities of the people who will execute [them].”

Research indicates that if the leader doesn’t role model change and maintains the status quo, the people on the ground will maintain that same motivation. (Boaz and Fox, 2014). In my Biblical example, the people saw their King change from within. All of his actions illuminated his internal change, and this motivated the people to also change and move toward transformation.

Learning to lead means cultivating awareness of self. You must be aware of your inner thoughts, character and the values that you hold firm to, regardless of the situation. Self-awareness requires you to know what makes you tick – your inner desires, your strengths and weaknesses, the interests you had as a child, and what motivates and inspires you as an adult. But in this day and age, having inner awareness of one’s self is not easy. Many voices out there harbor confusion, deception, fear, but a few voices have vision and purpose. Nevertheless, to lead others, one must lead one’s own self.

“Knowing yourself is the beginning of all wisdom.” ―Aristotle

If you model the behavior you want everyone in your organization to exhibit, then change will happen without resistance. In a research study, seasoned executives with 15 or more years of experience were asked to name the critical leadership competency for successful change efforts. The answers were communication, collaboration, and commitment.


In the area of communication, the leaders explained that followers must know the “what” and the “why” of the change and understand how these align with the organization’s values. In the area of collaboration, successful leaders encourage people to work together across boundaries with other teams or departments to achieve a common goal. In the area of commitment, leaders aligned their own beliefs and behaviors to support change.

The successful leaders also had to step out of their comfort zone and not appear to be resistant or inflexible. The successful leaders embraced change by devoting time and effort to it. Those who were resistant to and negative about change were unsuccessful in implementing change in their organizations (Center for Creative Leadership, 2020).
The bottom line is that people model the behavior of their leaders. Followers (employees, team) will do what they see their leader do. General Colin Powell said it best: “You can issue all the memos and give all the motivational speeches you want, but if the rest of the people in your organization don’t see you putting forth your very best effort every single day, they won’t either.” Be an example of the change you want to see.


Derrick Darden, Ph.D. (Entrepreneur Apex)

Partner Entrepreneur Coach

Blogsites: dcdardentalks.com & tripledfoundation.com

Cooperating In The Workplace: Covers Workplace Cohesion During The COVID-19 Pandemic (3rd Edition)

The working environment can cooperate harmoniously;

Change in our everyday lives brings new opportunities to dismantle archaic systems, to reinvent and recharge ourselves. The 2020 COVID-19 crisis triggered an urgent need to examine yet again, how people can interact successfully in organizations. For this reason, the expanded third edition focuses on how leaders and employees in a diverse and global working environment can cooperate harmoniously; especially, during crisis situations. Knowledge, organizational skills, and behavior need to be developed. Communication and teamwork skills, necessary to reach a common goal, must be improved. To this end, cooperation between co-workers, supervisors, and management within organizations is the method for success – the very method to survive, thrive, and stay competitive during times of crisis.

I intend this book to be a catalyst to understand situational challenges, to successfully navigate teams, and to communicate within organizational structures, not only under normal circumstances but also under the pressures and uncertainties of a crisis like the COVID-19 pandemic.

Website:http://thecarolyledestinygroup.one

Amazon books:  https://www.amazon.com/Cooperating-Workplace-Cohesion-COVID-19-Pandemic/dp/B086PPCPGZ/ref=sr_1_2?dchild=1&keywords=derrick+darden&qid=1586744141&s=books&sr=1-2

Leaders need to lead the way (A Citizen’s Letter in a Time of Crisis)

I have been disappointed for some time from what I’ve read, watched in the media and heard through the chatter amongst peers as this crisis unfolds. I have seen everything from calm to stupid. After work on Wednesday I decided to stop by the grocery store and get a few things for the weekend; such as hand wipes, some Lysol spray and maybe some fruit and other little knickknacks. However, when I arrived at the grocery store and began shopping for my few items I notice to my surprise that the shelves were empty, of meats, of fruits, seafood and the other paper products that I was seeking for.  I overheard a shopper asked one the store personnel about toilet paper, I thought for a minute in a humorous way that was strange. So I decided to go to the aisle to help the shopper out finding toilet paper. I didn’t really need any toilet paper but to my astonishment to was gone. The fully stocked shelves of paper products including toilet paper were gone.   Go figure!!!  No one sensible enough to believe that just a few weeks ago before this surge of panic hit the airwaves people would be fighting over toilet paper and paper products, so reality began unfolding.  Then capture this moment in your imagination that other people with families were walking up and down the food aisles in a daze wondering like me where all the paper products, fruit and meats disappear to.  I could see the look in the people eyes and in their expressions of disbelief; I missed out and thought in mind of when the shelves will be stocked again.  The sad part of this experience is that I didn’t need food for the month or for the week. All I needed was a few things. However, looking at some of the families in disbelief of what they were witnessing walking up and down the food isles trying to find that needed food item perhaps dinner for that night; was sad to observe.

I guess people went stir crazy, when they saw that our Government at all levels didn’t have a handle on what was going on, held and back vital information to the people. This caused skepticism, cynicism and uncertainty amongst the general public. This causes psychological negative behaviors that were displayed such as fear, panic and stress.   Those who took matters into their own hands panic and began buying in large quantities of essential items.   Therefore, negative display of behaviors manifests themselves by shoppers raiding the supermarket stores shelves during the worst time in this world’s history.  These were very selfish acts committed against our fellow men.    

Another way of looking at the committed selfishness is the disruption on the supply chain just out of fear.  Disruption in an already fragile supply chain, according to Steve Culp of Forbes magazine can reduce the share pricing as much as 7% of affected companies, and cause slowdowns in the market place in response to the disruption. This previous run on the supermarkets sent a jolt in the supply chain which was behavior driven.  This false negative can cause bottlenecks within those effected companies.

From an economic scale the disruptive behavior disturbed an already complex and fragile supply chain.  This behavior sent false negatives in the market place and distorted the prices of the commodity the law of supply and demand was not implemented.  We live in free market system, the law of supply and demand says that when the price of a commodity will net demand goes up in the supply of that commodity is down in the price is higher. On the flipside when the demand for those commodities is down in the price or supply that entire commodity is up in the price is lower. The distortion comes in when the price of a commodity doesn’t follow the law of supply and demand.

While people made a run on the supermarkets just hoard it for them instead of buying what they need for right now. Instead people had no regard for others such as those families that were in shock and unable to find the flexibility of buying those needed items for that day or the week.  People were out for self, these actions were based out of fear driven behaviors and this selfish acts happen across the nation.  People were literally fighting for these essential commodities.  This is a defining moment not only for leaders in organizations in the community but also leaders in Washington DC. I will save the politics for later but right now we have an elephant in the room and we got to get it out.

So I appeal to leaders at all levels, first must display calmness and control especially at the local levels and restore trust in the public.  Leaders must display behaviors free from agitation, disorientation and anger, instead show strong tranquility free from anxiety and fear.  As John Maxwell would say , “leaders must not lead and moan at the same time.”  When people see that their leaders display behaviors of strength, the people with begin to trust and take on these transmittable  behaviors.  People are influenced by what they see not what they are told. To quote John Maxwell leadership is influence nothing more and nothing less.   

James Allen, said “the more tranquil a man becomes, the greater it is his success, he’s a influence , his powers for good, calmness of mine is one of the beautiful jewels of wisdom.“

This past few weeks were crazy there were no, this was so wherever totally took everybody by surprise, preparedness wasn’t our strong point and calmness was not present amongst the chaos.  Therefore it triggered the behavior of total selfishness within individuals that did not care for their fellow man.

What happens in the United States was a trust problem which displays negative behavioral problems.  Leaders need to,

1.  Restore the trust of the people. Right now their don’t trust the government to make the right decision and have a handle on this epidemic.

2. Show people that their leaders are in control of their of the issues surrounding this epidemic and a willingness to share information regardless if it’s good or bad.  People want to know about the progress of the virus.

 3. Restore the people’s trust back in the government as leading the way in sharing information, keep them up to date on the cure and be upfront and sensible about the true picture of the looming crisis.  

The solution is to control the chaos by the display of confidence and strength.  The restoration of trust of the public.  A control on issuing the essential items and a willingness to share information at State and Local levels on how to obtain essential items need to get through this crisis.  This is the bottom-line of Mark Weitzman, paper of “Price distortion and shortage deformation, or what happened to the Soap” written in 1991.

So my story doesn’t end there I’m still waiting for the abundance of supplies to fill the shelves to me that will take another week or so while these control measures are being implemented. Not saying that this will eradicate the shortage problem but at least the shelves won’t be as bare as I saw them a few weeks ago. What are your thoughts and comments on this matter? Am I far off?

Derrick Darden PhD

7 Things Employees Wish They Could Tell Their Bosses

Your employees have a lot of thoughts. Most of those thoughts they don’t share, especially with you.

At times their silence can be a good thing, especially where your ego — or their employment status — is concerned. But their silence also may keep you from understanding what your employees really think — and what they really need from you.

Especially if they’re thinking the following:

1. “You say you respect me, so give me something important to do.” 

Assigning an employee a critical task is a definite sign of respect. Do it as often as you can.

2. “You say you trust me, so give me something important to do — and let me decide the best way to do it.” 

It’s only natural to tell your employees how to do their jobs. Still, when you assign a project without providing a lot of direction your employees instantly know you respect their abilities and trust their judgment. People appreciate respect; they love trust.

3. “Please don’t tell me all about your personal life . . .” 

Talking about subjects that aren’t work related helps build a personal relationship, but many bosses fall back on talking about themselves when they don’t know the other person well. Employees, especially new employees, have no interest in hearing about your go-to topics like your last vacation or your antique collection or your beach house.

New employees want to feel like they belong, but more importantly they want to know how they are doing.

Long-term employees want to know you care about them; talking about yourself only shows you care about yourself.

4. “. . . because it’s obvious you don’t really care about my personal life.” 

Walking up and asking an employee a generic question like, “Hey, how are your, um, kids?” or, “Are you doing anything fun after work?” or, “Hey, who do you think will win the NBA championship this year?” comes across as forced and insincere, at least to your employees.

Either take the time to get to know your employees well enough so you can have a decent conversation or just stick to work-related subjects. (Employees definitely prefer “all business” to “pseudo-personal.”)

One way to show employees you care about them as people is to follow the 20 percent rule: When you’re talking to employees, never talk more than 20 percent of the time.

The single best way to show you care is to listen.

5. “Can’t you see I’m really busy?” 

Here’s what happens. You stop by to talk, the employee stops what they’re doing to chat with you, and when you walk away they’re behind and have to catch up.

Employees want to talk to you, but they have work to do, too. Sometimes there’s an easy answer, especially if the employee’s job involves physical tasks: Help out while you talk. Not only will your employee appreciate a little help, your conversation will be less forced. In other settings, pick your spots carefully.

Never interrupt an employee who is busy simply because today is the day you decided to “check in with the troops.”

6. “Actually, I would like to work here a long time.” 

The average person switches jobs a number of times before they’re 30. Some leave for money, but many leave because they can’t stand their boss.

No matter what your industry, high employee turnover doesn’t have to be a fact of employment life. Find out why employees leave and address the causes. It’s stressful to change jobs, so most employees won’t start job searching until you give them a reason to.

Watch, listen, take smart actions. Do your job right, and most of your employees will want stay.

7. “That gift card is nice, but a simple ‘thanks’ goes a really long way.” 

Sure, every time you hand out paychecks you’re implicitly saying thanks, but not really.

Find reasons to thank your employees as often as you can. Look for an accomplishment, however small or fleeting, and express your appreciation. “Thanks for taking care of that difficult customer.” “Thanks for jumping in and helping Mike.” “Thanks for letting me know we have a problem in the warehouse; I hadn’t realized orders were consistently shipping late.”

Saying thanks benefits both of you: The employee feels appreciated, and you get a great way to start a meaningful conversation.

Jeff Haden is a writer, speaker, LinkedIn Influencer and contributing editor for Inc. His books include TransForm: Dramatically Improve Your Career, Business, Relationships, and Life . . . One Simple Step at a Time.