Workers at an Australian nickel refinery got a surprise at their recent Christmas party – a $10M surprise, to be accurate.
The owner of Yabulu Nickel Refinery, Clive Palmer, gave each of his 800 employees a gift in recognition for their achievements over the past 18 months. These gifts were not your normal box of chocolates or bottle of wine. They were much more.
In fact, 55 of his employees received Mercedes Benz cars, 750 will enjoy a luxury holiday for two in Fiji, and 50 who have recently joined the business received weekend stays at 5-star resorts in Queensland.
All reports suggest the workers (yes, these are rank and file workers, not senior management) are very happy with their gifts.
"The employees have worked tirelessly since July 2009 (when Palmer took over the refinery) to make this business a success, and now I want to reward them" said Palmer.
"The rewards for my entire workforce match the performance of the individuals and the business in its entirety. That's why the prizes are so big – they simply deserve it."
I'm not sure whether Mr. Palmer knows about the motivators/satisfiers theory of motivation first put forward by Fred Herzberg all those years ago, or whether he just wanted to do the right thing. Either way, he seems to have hit the nail on the head when it comes to motivating his workforce.
When Palmer bought the refinery 16 months ago from BHP Billiton, it was losing money. In fact had it not been sold, it would have been closed down.
So what's his secret of success?
Amazingly, the first thing he did when he took over, was to raise the level of pay for all employees (one of Herzberg's "satisfiers"). To many business observers, that may not have been seen as such a wise move for a company that appeared to be failing.
At the same time, he introduced a staff suggestion scheme. Now you might be thinking "staff suggestion schemes, aren't they a bit old hat? Do they ever produce real results?"
This one did. Why?
Palmer listened to the suggestions and implemented the ideas. As a result, people made more suggestions to which he again listened and implemented (readers may recognise this as paying attention to the motivators – achievement, recognition, responsibility). The scheme has been so successful that to date it has saved the company $16M.
In fact many of those who will be driving a new Mercedes are production workers, who Palmer says have been instrumental in turning the business around.
"When we took over the plant we recognised that we didn't know how to run the plant as well as the workforce. We let them go to do what they thought was best."
Since 2009, production at the refinery has gone through the roof and the company is once again turning a profit.
And so to the rewards handed out by Palmer. Are they in fact rewards (as he called them) or a form of recognition for work well done? There's a very important difference between the two and the difference is not merely semantic.
For starters, note that the gifts Palmer presented, are gifts not money (as is often the case with bonuses which are paid as a result of achieving certain targets). Here's my take on the difference between the two . . .
| Rewards | Recognition | |
| Financial incentives intended to direct employee activity toward a particular outcome. | A show of appreciation for work well done (already completed), i.e. a gift. | |
| The "reward" is identified and known in advance. | Given as a result of work well done – not known, nor necessarily expected. | |
| Generally tangible and most often money. | Can be tangible (e.g. a gift) or intangible (e.g. praise). | |
| Rewards, when included in salary, incentive or bonus schemes, are quickly forgotten. | Recognition such as a personal note or gift, can provide a lasting memory. | |
| A simple contract (either written e.g. salary/bonus scheme or verbally expressed such as "If you will do... then I/we will provide..."). | Unwritten, unexpected. | |
| Are tactical in nature, i.e. planned for and executed. | Are psychological in nature – can be planned or spontaneous | |
| Promote a person's need to feel satisfied with the organization and what it has to offer. | Promote a person's need to be acknowledged and recognized for his/her achievements. | |
| Are extrinsically motivated, i.e. they satisfy the drive for food, shelter and material goods/services. | Are intrinsically motivated, i.e. the need to feel good, competent and wanted by the organization. | |
| Obtain short-term results – i.e. changes in behaviour. | Promote long-term relationships and loyalty to the organization, team and/or manager. |
As managers, we need to be aware of these differences so that we can use both rewards and recognition appropriately. Each produces different results.
For example, will Palmer's people remember the pay increase or the gift? They'll probably remember both. Well, at least in the short term. They probably felt very good when their pay was increased some 16 months ago. Now, each also has a lasting memory of the appreciation shown for their hard work.
I think anyone who finds themselves driving a Mercedes Benz car five years from now, will certainly remember the circumstances. And whilst the other gifts were less in value, they were not less of value. Each will be long remembered.
As managers, most of us do not have the resources to be able to give away cars. But we can give away credit and praise for work well done. Even a small "thank you" (preferably in writing) can have a lasting impact.
If you've liked what you have read here, why not start the recognition process yourself? Find someone who has done some good work and go and thank them.
Bob,
The differences you cite between reward and recognition are critical ones. And here's another perspective around money and motivation.
The question of money as a motivator in the workplace is not new. Years of research, and countless books and articles on motivation include references to money. However, much of the focus on money and motivation points to superficial needs of people or points toward the immediate gratification that money seems to bring. The inquiry around money as a motivator must be explored more deeply if one is to truly understand the nature of the so-called relationship between money and motivation. There are a number of personal orientations relating to money and motivation. Some of these are:
1. I'm not making as much money as I'd like (the 'starving artist' concept), but I absolutely love my work, or the flexibility, or the control I have, or the opportunity for creativity, input, contributing and making my voice heard, and the like.
2. I need to be in this salary range, make this much money, because I need to be seen as 'somebody' as opposed to 'nobody' in my circle of friends, acquaintances, family, etc. who view 'money' as a merit badge of some kind.
3. It's not the money, per se, but what the money 'gets' me....i.e., possessions, stuff, materialism, etc., pointing again, for some, to 'being somebody' and being recognized, and gaining self-recognition, based on their material stuff.
4. I need more and more money as I'll never have enough, reflecting the 'your expenses always rise to meet your income' syndrome; as I said to an attorney client of mine, 'If you feel you cannot live on 2 million dollars a year, what makes you think you can live on 3 million?'
5.Unconsciously filling the psycho-emotional 'hole' of lack and deficiency which subsumes one or more of the above orientations and is the driver of the obsession with having money and needing more money, and what money 'gets' one in order to feel (albeit fleetingly) whole and complete. The illusion that money provides a sense of self, or a sense of one's worth or value.
At the end of the day, it's important to look at the intrinsic notion of motivation, that motivation is driven by one's inner values and so it's important to explore one's values and from where one's values emanate, i.e., from one's True and Real Self, one's Inner Core or from one's ego-driven needs for control, recognition and security which result in often-misguided values, the relentless pursuit of which, usually leads one to experience a 'lifestyle' (certainly not a life) mired in the self-sabotaging thinking and behaviors reflecting frustration, resentment, anger, hate, rage, entitlement, misguided choices, and the feeling of never having or being enough.
When one comes from one's core values, one's Inner Sense of what is important in life and living, then intrinsic, or self-motivation, is at the heart of a life well-lived, at work, at home and at play...and is at the heart of creativity, self-management, self-responsibility, healthy behavior (mental, physical, emotional, spiritual, social, financial). Money, in this sense, has a different emotional and psychological energy around it, a softer energy, not unlike the energy reflected in one who says, 'I love my work and I can't believe I get paid for doing this.'
Many folks, in the relentless pursuit of 'money' actually lose sight of what it was in the first place that got their juices flowing, e.g., having the corner office occludes the initial love of the work, obtaining the title interferes with one's initial love of mentoring and supporting others and finding that the relentless pressure to make and have more money becomes more important than the joy one used to experience when one was focused on one's love of the work itself. Losing one's way along the way. The mid-life crisis â€' that now often starts at 30.
Money as a driver then veils the clarity of one's choices and one often makes unfortunate and self-sabotaging choices when controlled by money. I often experience this kind of illusion in my work with some clients, individuals who have made self-defeating choices in their work life, social life and spiritual life because the lens with which they viewed their world and their place in the world had become 'green.'
For many of those who believe that 'money' is the sign of success, or that money is what it takes to be 'somebody', etc., long-term success is often unattainable; it's the 'Sisyphean approach to living.
For many folks, it's when they have experienced enough anger, anxiety, feelings of inadequacy, terror, and loneliness, that reflected their need for money, and more money, and more money, that they then have the real motivation to change and adapt a life and lifestyle that is truly Values-based, values that emanate from their True and Real Self, where money is important, but not an obsession (conscious or unconscious).
Motivation from this Inner place is much different. Motivation from this Inner place is not bounded by internalized pressures to have more, or by rigid inner structures or beliefs, or by paralyzing self-criticism that one is not (fill in the blank) for lack of enough money (whatever that is) â€' that one's true worth and value is not financially driven. That one's purpose in life and the meaning one derives from work is intrinsically driven from one's Inner Core Values.
From this place, one comes to one's world of work or play from the perspective of a whole person, as one whose choices, volitions, motivations and intentions are driven by a freedom that was heretofore restricted and constricted by the 'value' of money.
Finally, I have crossed paths with folks who feel that money allows them to be autonomous. Actually, the opposite seems more true â€' that money has forced many of these folks to live in an emotional and psychological prison whose bars are the self-defeating, self-sabotaging and controlling beliefs and behaviors driving these folks to do, be, and have in a way that forces them into a lifestyle (again, not a life) mimicking the lifestyles of the folks living in their prisons on either side of them...the illusion of autonomy, not the actions of one living from the place of one's True and Real self.
From this Inner Self, the energy of 'I am', 'I can', 'I will', 'I have', 'I choose', 'I love', 'I create' and 'I enjoy', that is, motivation and intention, flows with a sense of purposefulness, ease, grace, settled-ness and grounding that does not have a 'price tag.' Money is almost a by-product.
Thanks Peter, too true! I once read that 'one should find something one likes doing so much that you would do it for nothing. Then find someone to pay you for it'. I feel like one of those whom you mentioned say, 'I love my work and I can't believe I get paid for doing this.'
Regards,
Bob Selden
Very strong post and quite accurate comparison of rewards to recognition. In fact, this is a topic we dive into quite deeply in our new book 'Winning with a Culture of Recognition.' We discuss in depth the many benefits of recognition when delivered strategically. You might find it interesting. www.recognitionculture.com
I really enjoyed reading this article - apart from agreeing wholeheartedly, it reminded me of an employer who provided all of his employees (about 20 of us) with a day out shopping on a work day, a lovely lunch and an individual named envelope with cash to spend on ourselves. I was in my early 20s and received £100 and had only worked there for a few months. To this day, I'll never forget the wonderful gesture. And yes, we worked extremely hard!