Why the Boss Brings the Doughnuts

As we turn the calendar to the latter half of the year, it is important to remember that employee recognition does not always have to come at the end of the year. As the leader of your company, you must find ways to say thank you by continuing employee recognition throughout the year in ways that are positive, effective, and affordable.

If employee recognition is not continued on a year-round basis in various forms, a year end bonus is not remembered or even worse it simply becomes an assumed and expected annual event that loses its correlation to work performance.

At first breath, many CEO’s have told me that they already give out gas cards or similar rewards throughout the year. That is great if performance is properly tied to the reward. Thus, there are four basic rewards should be considered before any type of performance based reward concept is considered. I recommend the following, in summary, below.

1. Doughnuts: This inexpensive reward tells an entire staff thank you and that you recognize how well they all work together as a team. Doughnuts can be picked up quickly and inexpensively for a variety of small projects where everyone should be rewarded no matter how high or low their participation level was in the project. Doughnuts should be used on a frequent basis as a “we did this together” reward. (If desired, doughnuts can easily be replaced with healthier foods to reinforce recommendations from a company wellness program).

2. Cash or Gift Card: This moderately expensive reward tells an individual or small group that you recognize they exceeded expectations and extra effort put into a specific project after the project has come to an end. Cash cards can vary in size for individuals depending on the effort each person put into the project. Cash cards should be used less frequently as a “special project” reward. A cash card related project rewards likely has little impact on the employees’ performance in future projects.

3. Pay Bonus: This more expensive reward, with either a temporary or a permanent impact on the employee’s paycheck, tells an individual that you recognize their work on a project that lead to high work output related to that project and other future projects. A pay bonus is different from a onetime cash card in that it tells the individual that they went above and beyond expectations on a specific project, and what they learned or taught the company something that will lead to long term efficiencies that benefit the company. The long term financial savings they provided your company, and effort put into the specific project, should be reflected in the pay bonus awarded to them. Pay bonuses should be used infrequently as a “high employee output” reward due to results that will lead to better performance in future projects.

4. A verbal thank you: This is the most important but least expensive and most powerful expression of gratitude. When the CEO approaches an employee and is able to describe specifically why the employee’s performance is needed for a specific function of the business, the importance of the role of the employee is reinforced far more than any physical reward when the employee knows that the CEO is aware of what they have accomplished and why the CEO finds their performance important. This form of gratitude should be given to everyone when possible, not just higher level employees with easy access to the CEO. Employees in large companies feel special when the boss walks by giving a brief personal thank you when their job title may otherwise be unnoticed. A thank you should be used very frequently but with “authentic recognition” followed by information that lets each employee know that you believe in them and are aware why you are thanking them. A weekly stroll around the company to see how everyone is doing and asking what they are working on or having problems with is a good way to do this. Perhaps, as the CEO, you will recognize that two employees are working on similar projects and you can make the connection to have them work together. A thank you is cheap, but must be authentic. Thus, a thank you is oftentimes harder to give than handing out a cash card so it is easily skipped or forgotten, but a thank you is vitally important.

As a CEO, it is your responsibility to make your employees feel thanked, respected, and recognized year round. Using just one of the above thank you recognition techniques is OK, but it will not accomplish the year round recognition dynamic that is needed to continue that feeling generated at the year end holiday season. You need to find the right and affordable balance based on your budget by working with your B2B CFO® partner, while attempting to use all four of these techniques. Use the lesser expensive techniques on a more frequent basis, and leave the larger, more expensive rewards for special occasions.

Also, be certain to keep rewards on a timeline that is not always predictable. For example, if doughnuts are always brought in on Tuesdays, they become an expected treat rather than a reward. However, if doughnuts, cash cards, or pay bonuses, are distributed when a well performed project comes to completion, the rewards are viewed by the employee as an earned bonus based on performance.

One thing to keep in mind is there sometimes is a negative connotation when awards are given to only a limited few. You want to make it well known to all employees if and when a cash or pay bonus potential is available and what achievable goal is expected in order to obtain the reward. However, if say only one person reaches a goal and receives a permanent salary reward out of a group, the reward may need to be kept quiet so as not to embarrass the employee or to cause ridicule by fellow staff questioning why others did not receive the same bonus. On the positive flip side of the coin, if bonuses are provided year round, employees will realize that they have many opportunities to be rewarded.

That being said, as the boss you must always remember to acknowledge your employees’ performance, particularly when good performance leads to improvement for the company. Saying thank you, providing rewards, and bringing the doughnuts tells everyone in the company that they are special and needed.

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