Planting Carrots

Attracting and keeping good employees has never been more important as baby boomers reach retirement age. An incentive like higher wages, though, may not be an option as operating costs continue their relentless rise.

The good news is that more managers are using non-monetary motivators to keep employees during tough times, according to the 2008 Management Action Programs Inc. Quarterly CEO Survey conducted by Vantage Research.

One of those non-monetary motivators is employee recognition. Employees are more productive when they feel appreciated. Though research studies have proven this, I think it’s just common sense.

These days, companies are formalizing the thank-you process and creating ‘recognition programs.’ Recognition is becoming an industry, complete with a trade association, national conferences and consult-
ancies focused entirely on the subject.

One of these consulting firms, Salt Lake City-based O.C. Tanner Co., presented DHL with a “Carrot Culture Award” in October 2007 at its Executive Recognition Summit in New York. The award is given to a company for “its successful implementation of employee engagement and recognition programs,” according to a release.

O.C. Tanner promotes its “carrot philosophy,” which it defines as “a strategic method for creating a culture of engagement and retention.” The idea is based on a book called The Carrot Principle by Adrian Gostick and Chester Elton.

I called Tom Snowberger, senior vice president of human resources at DHL Express U.S., for more details. “A culture is made up of 138 different things,” he told me. “One of those 138 elements is recognition.”

In 2005, DHL hired O.C. Tanner to pilot a formal recognition program in its U.S. data center in Scottsdale, Ariz. Managers were instructed to give verbal praise, gift certificates or e-mail notes to employees who went above and beyond the call of duty. O.C. Tanner consultants trained both managers and their direct reports on the basics of recognition.

Specific behaviors that reinforced DHL’s internal slogan—“I’m on it”— were rewarded. Quarterly CEO Awards were presented to employees who did things that reinforced DHL’s brand promise—to “put customer service back in shipping.”

Within the first six months, turnover within the IT department decreased 27%. The program has since been rolled out to DHL’s entire workforce, and DHL’s regular employee surveys report higher levels of satisfaction across the organization. All employees—including couriers, managers and material handling workers— are eligible for recognition awards.

“A mistake some companies make is assuming that recognition always means extra dollars,” said Tom. “Compensation is important, but that tends to become standard operating procedure for working anywhere. People want to feel good about coming to work every day, beyond just the paycheck they receive.