Company awards can help increase employee engagement

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I love watching movie and music award shows. Academy Awards, Grammy Awards, People’s Choice Awards, even the Academy of Country Music Awards. I love them all. Why? Because it’s exciting — honestly, it gives me chills — to see talented artists being honored and recognized for their passion, hard work, dedication and cultural contributions.

And it got me thinking about awards in the workplace. Do they belong here? Do they benefit individuals, teams and organizations? Let’s dig in.

Awards make people feel good, immediately. But research from Swiss economist Bruno Frey shows that more significant benefits come in the future — because people who receive awards are more engaged and motivated going forward, and the quality of their work improves, too.

Frey thinks that might be because awards are social. That is, they’re given and announced publicly and are tangible, outwardly visible signals that your supervisors value you and your contributions. That’s motivating and empowering for all to experience and witness.

Over both the short- and long-term, awards can help build relationships in the workplace, especially between managers and supervisors and those who report to them. After all, when you give a team member an award, you suddenly have a special connection with them; that can spark a new level of trust and heightened sense of loyalty to you and your company. Multiply that by every award winner and, over time, you have a stronger team built on lots of solid connections.

Maybe because I tend to be a positive person, but I don’t see many downsides to giving out awards. However, there are some best practices to keep in mind to make sure your awards program works as intended and doesn’t have unexpected outcomes. Here are some to consider:

Reward exceptional behavior

For an award to feel valuable and meaningful, it should be given out for actions and characteristics that are truly above and beyond the normal job description and expectation. In other words, avoid giving awards for simply doing what one is supposed to do, like backing up your hard drive, turning in timesheets or meeting routine deadlines.

Be conservative

As with many things in life, scarcity adds value and abundance diminishes it. Supply and demand, if you will. If you’re a parent, you may occasionally cringe at the number of awards your kids get for just about everything. It can set up unrealistic expectations.

In the workplace, when awards are given out too frequently, for too many things, it can create a superficial reward system. So set a schedule to keep it meaningful.

Allow repeat winners

While it may seem like a good idea to spread the wealth and avoid the appearance of favoritism by limiting the number of times a team member can win an award, you run the risk of discouraging award winners down the road. By allowing winners to win again, as long as it’s deserved, you continue to motivate them to ever-higher levels of achievement. And those who haven’t won yet will be motivated to keep trying harder, raising the bar for everyone.

Locate unsung heroes

Similarly, even though your rock stars may deserve to keep getting the awards, their successes can overshadow the accomplishments of others who keep a lower profile. To make sure your awards feel attainable by all, go out of your way to look for team members who quietly go the extra mile day in and day out to the point where you may take it for granted.

Recognize awards may trigger emotions

Occasionally, a team member may feel resentful or unappreciated if they feel they deserve an award that is given to someone else. So be clear and transparent about what the award winner did to earn the award, and what others need to do to be considered for the award in the future —making sure the criteria are within reach and equally attainable by all.

Avoid the appearance of favoritism

Your close friends and even family members may well deserve an award, so go ahead and give it to them if they’ve earned it. Just be sure to explain in tangible, objective, quantifiable terms what they did to earn the award. Because if it looks like someone received an award because of their position rather than their efforts, the award loses importance. And you risk losing credibility and the trust of team members.

Let team members give out awards

If you’re concerned about the previous two points and caveats, you might consider setting up a fund of money or gifts and allowing any team member to dip into it, within reason and limits, to give another team member an award. It could be for impressive work or going the extra mile to help out or provide a service, for example.

Bonuses vs. awards

How do financial bonuses compare with non-monetary awards? Research suggests bonuses don’t have the same long-term impact. Probably because bonuses are handed out in private, behind closed doors. Team members don’t freely discuss them with each other and don’t know who has received a bonus, when, how much and why. As a result, bonuses don’t provide recognition and prestige. And studies show many people value the kudos and congrats they earn from an award over the money they receive from a cash bonus.

Additionally, when you want to reward someone for doing a phenomenal job of living and breathing your core values, it can be difficult to quantify and put a price on things like teamwork, innovation or integrity. In these cases, an award can be more meaningful, especially if it’s related to the characteristic or behavior you want to honor.

Another benefit of awards over bonuses is that awards typically don’t cost anything, or they cost very little. Sure, they need to be valuable enough to make an impact and you need to create fanfare, but you don’t have to spend nearly as much as you would spend on a meaningful bonus.

So after tallying up the pros and cons, I’ve reached a verdict: Awards in the workplace get a thumbs-up from me.

Lauren Dixon is CEO of Dixon Schwabl Inc., a marketing communications firm in Victor, New York.