Written by: Tom Nash
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Most people have heard about the Christine Holgate saga involving Australia Post and the Australia Government. The discussions have mainly been around the way she was treated by the Australia Post board and the Government, and whether she deserved an apology. This article focuses on the topic of rewards and recognition relating to the Bank@Post deal Australia Post landed and reflect on it with a different perspective.
Before I go on I want to highlight that Christine Holgate did not break any rules, policies or laws. This is evident from an internal Government report and what came out in the Senate hearing last year.
It is worth briefly describing the background around the Bank@Post deal to comprehend the significance of the agreement and therefore understand the justification of the rewards given (Cartier watches). If you research the deal yourself, I’m sure you will appreciate its significance to Australia Post and rural communities. In fact, it was the largest investment from an outside company into Australia Post, bringing in $220 million, saving 3,000 Australia Post outlets and ensuring 55% of communities in Australia still have access to essential financial services.
When the deal was signed, sealed, and delivered, Christine Holgate wanted to reward and recognise the four colleagues that were instrumental in getting the deal over the line. She has expressed her reasoning for the rewards in several public interviews, as demonstrated below. Do her comments align with leading research and Behavioural Economic principles? Let’s take a look.
‘Something special’ and ‘an appropriate recognition’ are the key words that jump out. She didn’t want to just give them cash, but something memorable which could be celebrated and appreciated publicly. Based on many academic/industry studies, recognising your employees’ best work with rewards have the greatest emotional pull. Think about this, have you ever thanked your employer for putting money into your bank account so you could buy petrol or groceries? What is your most memorable moment throughout your employment? I bet it was something memorable.
Science tells us that while all reward types produce results, certain rewards (those with high efficacy) are more effective at producing desired results and behavioural change. This is because tangible rewards are more meaningful, personal, and motivating than cash. It allows the company to be credited with providing the experience of public recognition with a tangible reward to the employee. It’s memorable
This is why tangible awards have the highest efficacy among all reward types. At BI WORLDWIDE Australia we commonly refer to The Rewards Efficacy Continuum to help illustrate the impact of different reward types derived from Behavioural Economic principles and credible research. It is best practise to refer to it when planning and implementing a recognition and rewards program.
On the right side of the continuum, the rewards create ‘a halo of happiness’, before, during, and after the reward is received. As we know from our studies, using a gift card to make a purchase is not quite the same as receiving a ‘package’ at your door or a tangible item in front of your peers. Every time an individual receives a meaningful reward they feel the dopamine effect – they feel good about what they’re doing and the things they’ve accomplished.
High value tangible rewards earned by employees are likely to share stories of their reward and the experiences that comes with it to their co-workers, friends, and family. This inspires even more goodwill, productivity, effort, happiness, and energy in the workplace – therefore multiplying the value of your rewards beyond just the person receiving it. BUT WHY?
In the end people like talking about rewards that didn’t cost them any money. If you think about it, you wouldn’t have an issue sharing news about a unique reward experience, a new TV or a plaque versus news of a $1,500 cash bonus. Tangible rewards are highly promotable due it its memory value and thoughtfulness as it acts as a symbol of success, therefore a key component of any employee engagement program.
Meaningful tangible rewards are shareable in nature due to it being hedonic in nature. Hedonic rewards are aspirational rewards people think about and talk about. They are luxurious because people want it, wish they can have it and therefore with excitement are easily re-consumed by the telling of stories. Every time a person uses the reward or shares it, they are being reminded of how and why they earned it, which is a big driver in ensuring a successful employee value proposition framework.
As Dan Ariely, Professor of Psychology & Behavioural Economics states, when incorporating rewards in your overall compensation mix and employee engagement programs you know you need to inspire top performance and significant results. You also need to get the best return on your investment. The trick: offer tangible, aspirational rewards your staff will think about. Talk about. And want to re-live, over and over again.
Why would you want to continue to reward and recognise brilliance? Well, I could write a 10,000 page essay on why that should be the case, but let’s keep it short and sweet.
Celebrating and frequently recognising success is powerful and very much underrated. It is critical in creating a culture of recognition. Employees who work hard, achieve great things and inspire others are more likely to repeat those behaviours again. When recognised and rewarded, it also motivates and inspires others around them to perform the same behaviours. The repetition of the desired behaviour are performed based on the likelihood of anticipating further recognition and rewards in the future, in turn, becoming more engaged and motivated. There is a famous quote out there you may have heard, “Show me the incentive and I will tell you the outcome.”
External research and our own studies suggest it has a strong impact on reducing employee turnover. A BI WORLDWIDE study of over 30,000 employees concluded that turnover is 17.7% less among employees receiving at least one recognition throughout their eligible program tenure. There is a correlation between frequency of receiving recognitions and turnover. The study also found that employee turnover decreases as frequency of recognitions increases.
On top of that, recognition with rewards has even more of an impact in reducing turnover compared to those receiving a recognition with NO rewards.
The bottom line: Through all our research achieving a culture of recognition that doesn’t stop rewarding and recognising brilliance in people are happier, more engaged, committed, and intensely performing. This translates into lower turnover, higher customer satisfaction, and ultimately reduces the cost of onboarding.
At BI WORLDWIDE Australia, we focus on developing employee engagement strategies and recognition solutions that change the behaviours of employees and achieve measurable results. Contact us to find how we can develop these strategies and solutions for you.