Here’s an interesting article from The Society for Human Resource Management (SHRM) by David Kovacovich

As I enter my tenth year in the Human Capital Management space, I figured it would be beneficial to my readers to reflect on how our industry has (and has not) evolved over the last decade’s time.

* The following scenarios are built on real life business engagements. The names have been changed to protect the innocent.

Case Study #1: A Story of Manipulation
Employee A (Let’s call him Carl) had worked for Company X (let’s call it Pied Piper) for a calendar year. After 3 failed endeavors at Bay Area start ups, Carl was looking for something more stable. He had a single motivating factor: MONEY!

Work at a Large Corporate Technology firm was different than the start-up world: Bureaucracy was thick, rule structure was more intense and cashing out was trumped by climbing the ladder. So how could he climb the ladder?

Achieving sales results did not come as easily in an Enterprise role at a large company and Carl struggled in this first year. The results weren’t there so he needed another tool to help get him promoted. Then it hit him like a lightening bolt….. his company had announced the end of the annual performance review process to be replaced with a high touch performance management system (even large corporations cannot refute common sense). The performance management process was positioned as a pro-active measure to build the internal talent pool.

Carl’s bargaining chip? Employee Recognition would be leveraged as part of the Performance Management system. Carl’s job was simple, he sent an email to roughly 100 colleagues asking them to participate in an experiment (he even went-so-far as to title his email “An Experiment In Human Compassion”). Carl asked each of his colleagues to send him a recognition through their peer to peer system. He offered to return the gesture. Carl was a fun guy at happy hour so getting his peers to buy-in was no problem. Within a week, Carl shot to the top of Recognition Leaderboard. This flagged him as an ‘up and comer’ in the system and garnered him an opportunity to apply for a Management position.

Carl was promoted to Management, 8 employees left under his reign and he was fired less than a year later.

The company lost great performers and the recognition program was tarnished.

What’s worse? The company was sued by an employee who was passed over for promotion sighting leadership development as a popularity contest. (Carl’s “Human Compassion” email was submitted into evidence).

Lesson Learned: Using Recognition as a Performance Lever is Dangerous Business!

Case Study #2: A Shattered Cookie Cutter
The message was simple, “we need to cut costs so any programs that are not mission-critical are to be discontinued”. The CEO was very clear in her directives so the formal recognition program was removed. This program had operated with over 90% adoption for nearly 10 years (CRM adoption hovered at about 38%).

With the program removed a caveat was dangled. Keeping our employees engaged is job one so we are reconstructing programs that will streamline appreciation:

1. Employees would go to dinner with their supervisor if they qualified as a top quarterly achiever.
2. Employees who hit a tenure milestone would receive a letter from the CEO and a gift card.

When Employee A (let’s call her Nancy) hit her 20 year anniversary with the company, she received a form letter from the CEO and a $250 gift card. She tested the signature on the letter but it did not smudge. Then she pulled out her i-phone to use the calculator.

$1.73 a month. That’s what her contribution to the organization was worth.

She flipped over the form letter, wrote two words on the back, grabbed a picture of her kids from her desk and headed out the door…..


Lesson Learned: No Recognition is Better than Thoughtless Recognition!

Case Study #3: Leadership Jumps on the Manipulation Train
The VP of HR sent out the annual employee survey at the tail end of the 7 paragraph diatribe. The message offered a proverbial laundry list of all of the “perks and benefits” of working at Company X. Benefits packages, non-guaranteed pay increases, company functions and education aid were all mentioned as the things that made Company X a “Great Place to Work”. Mr. HR Guy included a mention of half day Fridays during the summer months if the company hit their revenue goal.

Filling out the survey was mandatory. Managers received bonuses for “5” rating across the board and were regulated for examination if any of their team dipped below last year’s survey results.

The survey structure was based on the following:
1. Make the Great Place to Work list and Senior Managers receive a bonus.
2. Managers who average a “5” receive a bonus.
3. Managers whose average scores wavered were consulted by HR as to what to do to ensure employees “no longer seemed discontent”.

The leader of the Human Engagement process allowed his greed to override a prime opportunity to receive feedback from the trenches. He did not receive his bonus.

Managers were subjected to adversarial relationships with employees: meeting with each of them to guess who used what comment to berate them while urging employees to keep their comments in-house.

The results of the survey were skewed. Employees who wished to stay in their managers good graces “marked 5 to survive“. Those who saw through the hypocrisy of the exercise gave lower scores than they otherwise would have to mock Leadership’s misunderstanding of workforce engagement!

Lesson Learned: Surveys Are an Opportunity to Identify Areas of Improvement not a Meter for Compensation!

The Recognition industry was built by fulfillment houses whose strengths lie in purchasing & distribution. Times have caught up with them. It’s 2016 and systems of feedback and leadership development are far more important to today’s employee than a logo-ed lamp.

1. Companies are still investing heavy dollars in catalog-driven Service Anniversary programs (because employees still like them).
2. Performance Management has not replaced Employee Recognition.
3. Social Recognition has proven effective for a limited time if there is not a reward within the process of participating.
4. Results compensation programs are up to 100x more-invested than Recognition programs in the majority of companies.

1. Diversify budgets to create more high touch, immediate recognition opportunity
– I’ve beat this horse to death since 2006 and I’m not giving up.
2. Make recognition initiatives performance based.
– It’s incredibly simple to program technology to reward mission critical behaviors instead of off-the-shelf catch phrases.
3. Use Social Recognition to attract employees to a platform that offers a variety of performance-based programs.
– Consolidation enhances engagement and saves significant dollars.
4. Replace revenue improvement incentives with behavior-based development programs.
– Compensating the bottom line is easy to measure and easier to manipulate. Creating programs that promote responsible behavior geared toward relationship development will strengthen long-term organizational stability and improve revenue.

I believe the Human Capital Management industry (or whatever you want to call it) has the greatest opportunity for growth of any:

– Human Resource professionals need to continue a Change Management focus.
– Vendors should shift from reward fulfillment to active behavior change consulting.

Don’t Forget to Remember!


See the original article Here.


Kovacovich, D. (2016 September 27). Employee recognition: picking up the pieces. [Web blog post]. Retrieved from address