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The Impact of Recognition on Employee Performance: Theory, Research and Practice

Fred Luthans University of Nebraska Department of Management Lincoln, NE 68588-0491 e-mail: fluthans@unl.edu

Alexander D. Stajkovic University of Wisconsin-Madison Department of Management and Human Resources

The Impact of Recognition on Employee Performance: Theory, Research and Practice Introduction Although money receives the most attention as a reinforcer and incentive motivator, and is even equated with reward systems by practicing managers, there is increasing evidence that contingently administered recognition can be a powerful reinforcer to increase employee performance. The purpose of this paper is to provide reinforcement and social cognitive theoretical explanations and research results on recognition, explore the moderators of the relationship with performance, present some specific guidelines for effective implementation, and review representative applications. Theory and Research Background As a reward for employee performance, recognition is defined as acknowledgement, approval and genuine appreciation (not phony praise). This recognition can be set up on a formal basis (e.g., employee of the month or million dollars in sales round table) or informally used by a supervisor/team leader in managing individual employee or team behavior. It can be administered on a public (staff meeting, newsletter, or banquet) or on a one-on-one private level, verbally or written. There is a fine line between recognition as defined here and other positive reinforcers or rewards such as money and feedback. For example, providing a merit increase in pay or a bonus and feedback about performance can be considered forms of recognition. However, this paper focuses on nonfinancial recognition and does not necessarily contain information about performance, although some formal recognition programs may involve prizes, dinners or plaques that cost money and both formal and informal recognition may sometimes include information about performance. The broad appeal of recognition is that most practicing managers believe it applies to everyone (top to bottom in the organization), no one gets too much of it (no satiation principle here), it is available to everyone to use, and it doesn’t cost anything. To demonstrate these claims, simply ask yourself, are you or anyone you know suffering from too much recognition? Besides this common-sense appeal of recognition as a powerful, but still not wisely used, positive reinforcer for employee performance, there is also considerable theory and research supporting its effectiveness. The Use of Recognition in Classic Behavioral Management Under classic behavioral management based on reinforcement theory (Komaki, Coombs, & Schepman, 1996), recognition is classified as a natural reinforcer (as opposed to a contrived reinforcer such as money) (Luthans & Kreitner, 1975, 1985). Recognition is treated as universally applicable and, if provided on a contingent basis in managing employee behavior, can be a very powerful reinforcer to improve performance. For example, under the Luthans and Kreitner (1975, 1985) organizational behavior modification (O.B. Mod.) approach, after the critical employee performance behaviors are identified, measured and functionally analyzed, then the intervention step can 2

contingently apply recognition to strengthen and accelerate the identified behaviors with resulting performance improvement. In a manufacturing setting, an identified performance behavior might be productive use of idle time during preventative maintenance. The contingent recognition might be the supervisor saying to a worker, “I noticed that you helped out Richard while your equipment was being serviced by the maintenance guys.” In this example, it is important to note that the recognition did not include a “gushy” thank you or phony praise for doing what this worker was supposed to be doing, but instead the worker...
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