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Public Praise vs. Private Pay

June 4, 2019

In the American workplace, there’s a traditional idea that the best way to praise an employee is strictly through financial rewards - employees receive a regular paycheck, what more could they need? It can even go so far as to say employees who receive recognition in the form of written or oral praise will get “soft” overtime. 

There is genuine fear that recognizing and communicating appreciation to employees will turn them all into snowflakes who think they are overly precious. However, as we now know, there are a significant number of downfalls in a money-only-based reward system. In this case, in addition to other issues we’ve previously discussed such as timeliness, it’s a lack of personalization and genuineness. Monetary rewards make up a “one size fits all” system for praise where nothing is truly said about the character of the recipient. In addition, such a system can quickly turn into the same few employees getting paid and praised all the time while others who don’t quite meet the mark are more or less forgotten.















Because of the lack of specificity communicated with financial rewards, more and more companies are moving towards recognition based reward systems. While financial rewards are generally more popular and tend to sound more enticing at first, recognition has been found to be far superior when it comes to shaping human behavior and employee retention. A study published on ResearchGate looked at how public praise compared to private pay in regards to energy conservation in the workplace. The study participants were either given money as a reward for decreasing energy consumption, or they were given a “social reward,” which included points and a personalized comment. As the researchers predicted, the social reward was far more effective despite it taking less funding. Reinforcing social norms through public recognition is an extremely powerful tool for changing human behavior in a way that still allows for an individual’s intrinsic motivation.

Although this study focused on energy conservation in the workplace, the results are exciting and can be applied to office reward systems in general. In an Inc. article written by Gordon Tredgold, founder and CEO of Leadership Principles, Tredgold discusses his experience working in an office whose HR director largely discouraged recognition. When he went outside of that recommendation and gave the very same HR director a compliment on his hard work recently, the director seemed to be very flattered and was noticeably motivated afterward. For Tredgold, this was no surprise after years of experience watching how people respond to different leadership tactics. Maslow’s Hierarchy of Needs says that esteem needs, achieved through recognition and respect, come before self-actualization, the ability to reach one’s full potential. Thus, if we want employees to reach their full potential, recognition in the form of praise is highly effective and currently underutilized. So go ahead and try giving some of your coworkers public recognition. It will be well worth the initial awkwardness!

Lydia Stevens

Written by Lydia Stevens

Lydia is Preciate's Digital Marketing Manager. She works remotely from Colorado, enjoying the beautiful mountains on the weekends and creating new content for Preciate during the week.