Recognition programs and incentive programs are both way of rewarding results, but do you know the difference between the two? Both are powerful tools to influence behavior by offering a reward, but they have different goals and reward different types of behaviors.
An incentive program has as its goal a short-term change of individual behavior patterns by offering a reward. They are flexible and can stop or start within a given timeframe and incite change in return for the reward. Incentives have measurable results that can be tracked and monitored.
Example: Company A has a need for increased sales. Customers who sign-up under a special promotion code receive a reward for helping the company increase their sales.
An incentive program is “now” oriented. The goals that a business rewards can change from quarter to quarter.
A recognition program has longer-term goals that reward individual behavior as it relates to a group context. The rewards are for behaviors that have already happened rather than for changed behavior that happens now. The goal is to reward excellence and set standards within the group context.
Example: Company B has a group of clients. To recognize the ones who meet the recognition goal of customer loyalty, a reward is given to the 10 clients who have been with the company for the longest period of time.
The impact of a recognition program on a business may not be immediately measurable, like the spike in sales that an incentive program will generate. By focusing on excellence and rewarding the best performers, the payout is in increased value rather than dollars and cents.
Both programs are valuable tools a business can use to influence and change behavior. It is the goal, its timing and the structure of the reward system that differentiates the two programs.
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I have a colleague that created 2 award programs when he worked for Microsoft, with the only real objective of making people happy. There was one person that was the best technically, but a horrible person to manage. My colleague found that he had a big ego and needed public recognition. Every month this person was recognized for something (anything) and that made him quite. When quite, he delivered.
Look for the thing that make people happy and find a way to give it to them for free.
Great article. The examples you give make your point well. I think most people (myself included) have lumped these together when thinking about them but they aren’t the same thing, as you’re shown clearly.
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