Can team-based recognition help improve workers' performance?

'Our results should be relevant to reward program designers, especially in settings where individual performance is costly or difficult to measure'

Can team-based recognition help improve workers' performance?

Team-based recognition could be the key to motivating employees in a fast-food setting, which is well known for its difficulties motivating employees, according to a recent report.

Team-based recognition can be effective in settings where performance is highly interdependent, and teamwork is essential to the company’s success, reports the University of Waterloo.

“Our study is the first to show the effect of team-based recognition programs on employee effort and engagement. And that's important. Because in some settings, conducting or adopting individual-based recognition is either impractical or very costly,” says Sasan Saiy, assistant professor at the School of Accounting and Finance at Waterloo, in talking with HRD.

“Showing that team-based recognition can have or is associated with increased or improved employee engagement and effort is very important for consultants and compensation designers.”

Feedback and assessments are critical in any business that aims to increase productivity, improve efficient and effective work processes, and develop in areas that may need improvement, according to a previous report.

Field study on employee recognition

The University of Waterloo study looked into six fast-food franchise restaurant locations to examine how effective team-based recognition is on employee effort and engagement. The same franchisee operated each of the six locations.

Each restaurant had a team of roughly 30 employees. Faced with ongoing low staff engagement, the management opted to adopt a formal, team-based recognition program. Researchers implemented the program and assessed its efficacy.

Every two weeks, each location was eligible to receive non-monetary recognition in the form of a thank-you card, token gift, etc. During this 12-week recognition program period, both employee engagement and effort increased as compared to the previous 12-week period.

“Researchers also found evidence that team recognition had indirect effects on effort through employee engagement. This suggests that there are both indirect and direct effects on team-based recognition through engagement impacting employee effort,” said the university.

Nearly seven in 10 (69%) of employees agree that their wellbeing would improve if people were thanked more, according to a previous report.

The University of Waterloo’s findings are important in the fast-food setting because of the “repetitive nature of the tasks performed by employees,” says Saiy. These workers are also dealing with time pressure, low pay and the limited opportunities for advancement, he says.

“Our findings, based on actual employees performing their real jobs, provides compelling evidence of the efficacy of team-based recognition programs,” he says. “This study also demonstrates the positive effects of team-based recognition in a fast-food restaurant setting, which is a notably large industry in North America, well known for its difficulties motivating employees.”

Best practices for implementing team-based recognition

When implementing a team-based recognition program in your organization, it is important to have commitment from the management. This will help ensure that the recognition program is well designed and implemented, says Saiy.

It’s also important to have clear communication to the lower level of management and employees “to make sure they fully understand the nature and the goal of the program”. 

“Having said that, if you define the measures, you have to be careful how you communicate the measures that you're going to assess employees on. And if you explicitly explain the goals or the measures to them, then employees just focus on those measures rather than the big picture.” 

Listening to consultants and other experts can also help, he says.

Here’s how to show employee appreciation with a distributed workforce.

Drawbacks of team-based recognition

However, if implemented incorrectly, “team-based rewards can increase destructive and/or competitive behavior between and within teams in organizations, rather than fostering cooperation,” says Courtney Calinog, a Master's in Learning & Organizational Change student at the Northwestern School of Education and Social Policy.

Citing other studies, she wrote: “This can lead to the sub-optimization of organizational goals.

“Fostering competition for rewards between teams promotes impermeable boundaries on the teams—i.e., a lack of information sharing and collegiality. Therefore, attempting to award the best of middling or low-performing teams among a group of middling or low-performing teams will provide a negative return on investment. Similarly, team performance appraisal systems that provide a fixed reward to be divided within a team are destructive because they put individual team members in competition for rewards.”

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