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Prize vs. Praise – The Difference Between Incentive and Recognition Programs

Devin Ferreira | February 16, 2021

How is an incentive program different from a recognition program? It’s a distinction that often gets overlooked. While both types of programs reward employee behavior, they do so by triggering very different motivational cues, are geared towards different types of people, and are best suited for different situations. Below, we’ve constructed a brief breakdown of the differences between the two program types:

Incentive Programs:

Motivational Cue = Competitiveness: The impetus for your typical incentive program is competition, whereby the sales instinct is cultivated and harnessed to promote growth among a specific group of results-driven individuals.

Who’s it for?: Unsurprisingly, these programs are geared toward a particular type of person, one who is unafraid of failure and is fueled by visceral success—the ideal salesperson.

When it works: Incentive programs are thus generally suited for achieving highly visible sales goals, targets or deadlines, due to the fact that in most cases the pressure amplifies the competitive nature of this type of person. These could include special promotions that either stand alone or are introduced in order to boost an existing program. They might also feature some sort of tiered structure, in which high-performers can achieve levels of rewards that aren’t available to their lower-producing peers. In any event, the reward, or prize factor, will often be sufficient to motivate the participants of these programs.

Recognition Programs:

Motivational Cue = Acknowledgement & Approval: A recognition program, on the other hand, is designed as a concrete or quantitative form of praise-giving, a symbolic “pat on the back” that also carries some sought-after substance.

Who’s it for?: It functions as a means to reinforce company wide values, and is thus constructed with a broader range of participants in mind, typically those who, because of the nature of their job or position, are generally unaccustomed to receiving praise.

When it works: Recognition programs are a way for management to acknowledge employees who reach specific goals or milestones or consistently produce high-quality results in the workplace. In some cases, the performance being recognized may not even be directly sales related. A recognition program is meant to encourage specific behavior by publicly reinforcing the behavior you would like to see repeated. In this sense, a recognition program is also designed to generate loyalty and promote a positive attitude towards your organization. Most recognition programs tend to reward people for long-term (usually annual) results, and may include a social, peer-related component to reinforce the point of appreciation.  This type of program can also work well during periods of uncertainty when the company is faced with a culture crisis, such as the transition time after a big merger or in the midst of unfavorable cutbacks. It not only reestablishes the underlying principles of the company, but it also reminds employees of their value and serves as an acknowledgement of that value from the top-down.

Both incentive programs and recognition programs have their respective places in any performance improvement strategy. But in order to figure out where each fits, it’s important to understand how each functions. While one type of program seeks to pull performance up through the concept of a prize, the other seeks to push performance up through the use of praise. This subtle distinction can only be capitalized on when the situational factors driving them–motivational triggers, participant makeup, timing–are properly understood.  At HMI, we’re here to help you find the Incentive Program that’s right for you.

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