​Employee recognition programs are a popular way to appreciate staff — but they can sometimes backfire, says workplace psychologist Jennifer Newman.

Newman sat down with The Early Edition host Rick Cluff to describe the pros and cons of these programs, and how management can more effectively reward their employees for their good work.

Rick Cluff: Why do employers use employee recognition programs?

Jennifer Newman: They increase engagement, because people like to be valued at work, and that's what recognition can do. Your productivity can go up, as being acknowledged by the boss can make you more motivated. Job satisfaction also goes up, and monetary rewards do help and increase performance at times.

Jennifer Newman

Workplace psychologist Jennifer Newman. (Jennifer Newman )

Are there drawbacks to these programs?

Sometimes, especially if the program is unfair. If the boss's favourites get the awards these programs backfire. If the program has a limited number of workers that it can honour, that is a problem. Also, if you're limiting the number of times recognition can be made, that's an issue as well.

This is especially true for Employee of The Month programs. They don't tend to improve performance as they can demotivate runners-up. They can hurt the team because they create status differences. Also, the worker who is employee of the month may be ostracized by the other employees. It can just create a competitive climate that can backfire.

If your colleagues are already getting along and someone is recognized, it doesn't make a difference. But, if workers aren't getting along, that's when you'll see it being a difficulty because people may sabotage each other, exclude each other, and backbite more after someone has been recognized.

This makes employee recognition a bit of a workplace minefield.  Maybe it's best not to bother?

It's best if employers think about what type of recognition works best for their workers. Recognizing employees is more than giving staff something for hitting targets. There is personal recognition, and seeing a worker as an individual.

So for example, maybe some employees are vegan or allergic, or have religious reasons to steer clear of certain food items, make sure their selections are included in the catered holiday staff lunch.

Employers can also recognize staff for how they do their jobs, not just what target they're hitting. For example a supervisor recognized customer service efforts by individuals and teams in the weekly meetings by telling a story of how they did something great for a customer.

What about recognizing achievements? Isn't the point to reward staff for hitting targets or making sales?

That is a widely known way to recognize workers. It tends to be overused, and there are often winners and losers. And, being a runner-up doesn't mean you didn't make a lot of sales. You might be number 2 behind the top sales person, but you still made a lot of sales to get to that point. Yet, somehow being first seems to be what counts. So be careful in using these types of rewards, as they can demoralize staff quickly.

Setting targets is less effective because it's just based on the idea that staff perform best when they are being monitored and compelled.

What are some other, better ways to recognize staff?

You want to tie your recognition to something personal. If a worker has a hobby, or a team likes a certain sport or activity, think of recognition that means something to them, and they'll feel even more honoured. Thank you letters are also easy and effective.

For example there was a company that encouraged colleagues to recognize one another with kudo cards. So if somebody helped you out in a pinch, you'd write them a note, and then people would collect these, and that made a big difference.

Staff also like having a longer lunch, so if your team does a really good job they could get a longer lunch, or a breakfast or dinner. Acknowledging and celebrating birthdays is also a good thing.

If you hear a positive remark about someone, pass it on. That's another way to recognize people informally.

Invite a speaker on a topic that your staff want to learn about. Give a book or magazine subscription, or personalized items like a coffee cup or t-shirt.

Bonuses are good. They can be offered after a particularly successful or complex project was completed. But performance bonuses need to be carefully planned. They are both a recognition and incentive for some. But, not everyone is motivated by them.

This interview was condensed and edited. 

To hear the full interview listen to the audio labelled: Workplace psychologist explains how to effectively recognize employees for their work and achievements