One of the things I enjoy about my work is watching the Law of Unintended Consequences in action. I came across a study by the Harvard Business School that looked at employee recognition programs. In this study, a company was trying to reduce absenteeism (unexcused tardiness or missed days). The company implemented a drawing for a gift card at regular intervals for those with good attendance. The results:
- Absenteeism did go down.
Mission accomplished. Well…
- Excused absences and tardiness went up. People ensured they called in so they would not be out of the drawing.
- Overall productivity did not improve. In fact…
- “…the most productive workers and the most consistently punctual workers – suffered a 6-8% decrease in productivity after the award was instituted.” Yikes!
Most companies do not start with a reward program. So why do executives wake up one and day believe they need it? The majority of people simply want a decent place to work, enough pay for their effort, to be listened to by their bosses, and not to be micromanaged. A gift card to a restaurant or a branded desk chatski do not address any of these motivators.
Recognition programs cannot motivate employees. They cannot paper over actions that demotivate employees (such as when an employee’s concerns are dismissed as drama). As this study shows, they may in fact make things worse.
I would like to see a study on the introduction of a rewards program and the longevity of the company. I wonder if there is a correlation with being bought out or going out of business shortly afterwards.