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Workplace rewards kept simple

In a down economy, small steps to recognize workers can go a long way.

By Marilyn GardnerStaff writer of The Christian Science Monitor / October 20, 2008

Too lavish? Insurance company AIG took heat for sending 90 sales agents to the St. Regis Monarch Beach Resort in Dana Point, Calif., after receiving a government bailout. Employees prefer simpler, less-expensive forms of recognition, some workplace experts say.

Chris Carlson/AP


When nearly 100 independent insurance brokers for American International Group (AIG) gathered at a posh resort in California last month as a reward for stellar performance, probably no one expected the event to make national headlines. But because the retreat came on the heels of a federal bailout for the company, the $440,000 bill – including $23,000 for massages and pedicures – sparked public outrage. AIG cancelled a second retreat.

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The ill-timed celebration raises a question for other companies: What rewards are appropriate or possible during an economic downturn?

"Taking executives on a retreat is definitely not going to motivate employees who are frightened they are going to lose their job the next day," says Christi Gibson, executive director of Recognition Professionals International. But she emphasizes that this is not a time to abandon recognition. "During unstable times, recognizing employees is a great way to ease tensions. You can still have events and celebrations. They just need to be more personal and closer to home."

Companies spend an average of 2.7 percent of their payroll on recognition programs, Ms. Gibson notes.

"Rewards have their place when there's a budget," says Roy Saunderson, president of Recognition Management Institute in Montreal. "When you don't have a budget for rewards, you can still recognize people. Recognition reinforces the company's culture and values."

Although some businesses have cut back on recognition, more are staying with it, says Tommy Lee Hayes-Brown, a board member of Recognition Professionals International. "They realize making employees and customers feel good is important. It's the trickle-down effect. The boss makes the employee feel good, the employee makes the customer feel good. Then customers talk to other potential customers. That in turn helps to grow your business." He observes a trend away from "major, expensive, over-the-top" recognition and toward meaningful gestures that are less expensive.

Sometimes the most valued recognition is free, says Cindy Ventrice, author of "Make Their Day: Employee Recognition That Works." In a study last year, she asked participants to think of their most meaningful recognition experience and what it cost the company. Fifty-seven percent said it was free. Only 11 percent said the most meaningful recognition involved something valued at $1,000 or more.