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The Impact of Recognition on Employee Performance:
Theory, Research and Practice
Fred Luthans
University of Nebraska
Department of Management
Lincoln, NE 68588-0491
e-mail: fluthans@unl.edu
Alexander D. Stajkovic
University of Wisconsin-Madison
Department of Management and Human Resources
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The Impact of Recognition on Employee Performance:
Theory, Research and Practice
Introduction
Although money receives the most attention as a reinforcer and incentive
motivator, and is even equated with reward systems by practicing managers, there is
increasing evidence that contingently administered recognition can be a powerful
reinforcer to increase employee performance. The purpose of this paper is to provide
reinforcement and social cognitive theoretical explanations and research results on
recognition, explore the moderators of the relationship with performance, present some
specific guidelines for effective implementation, and review representative applications.
Theory and Research Background
As a reward for employee performance, recognition is defined as
acknowledgement, approval and genuine appreciation (not phony praise). This
recognition can be set up on a formal basis (e.g., employee of the month or million
dollars in sales round table) or informally used by a supervisor/team leader in managing
individual employee or team behavior. It can be administered on a public (staff meeting,
newsletter, or banquet) or on a one-on-one private level, verbally or written. There is a
fine line between recognition as defined here and other positive reinforcers or rewards
such as money and feedback. For example, providing a merit increase in pay or a bonus
and feedback about performance can be considered forms of recognition. However, this
paper focuses on nonfinancial recognition and does not necessarily contain information
about performance, although some formal recognition programs may involve prizes,
dinners or plaques that cost money and both formal and informal recognition may
sometimes include information about performance.
The broad appeal of recognition is that most practicing managers believe it
applies to everyone (top to bottom in the organization), no one gets too much of it (no
satiation principle here), it is available to everyone to use, and it doesn’t cost anything.
To demonstrate these claims, simply ask yourself, are you or anyone you know suffering
from too much recognition? Besides this common-sense appeal of recognition as a
powerful, but still not wisely used, positive reinforcer for employee performance, there is
also considerable theory and research supporting its effectiveness.
The Use of Recognition in Classic Behavioral Management
Under classic behavioral management based on reinforcement theory (Komaki,
Coombs, & Schepman, 1996), recognition is classified as a natural reinforcer (as opposed
to a contrived reinforcer such as money) (Luthans & Kreitner, 1975, 1985). Recognition
is treated as universally applicable and, if provided on a contingent basis in managing
employee behavior, can be a very powerful reinforcer to improve performance. For
example, under the Luthans and Kreitner (1975, 1985) organizational behavior
modification (O.B. Mod.) approach, after the critical employee performance behaviors
are identified, measured and functionally analyzed, then the intervention step can
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contingently apply recognition to strengthen and accelerate the identified behaviors with
resulting performance improvement.
In a manufacturing setting, an identified performance behavior might be
productive use of idle time during preventative maintenance. The contingent recognition
might be the supervisor saying to a worker, “I noticed that you helped out Richard while
your equipment was being serviced by the maintenance guys.” In this example, it is
important to note that the recognition did not include a “gushy” thank you or phony
praise for doing what this worker was supposed to be doing, but instead the worker
simply “knew that his supervisor knew” that he had gone out of his way to help out a
fellow worker. Because of this supervisor’s recognition, the worker will tend to repeat
this helping behavior in the future. In other words, instead of receiving no consequence
for this helping behavior (which will lead to extinction) or a punishing consequence of
having to work harder (which will lead to a decrease), the supervisor providing
contingent recognition as a positive reinforcer will strengthen the worker’s behavior and
enhance the productivity of the unit.
In a service setting such as a bank, an identified performance behavior of tellers
might be providing customers information about various products that the bank offers.
As in the manufacturing example above, upon observing this behavior the supervisor
would provide contingent recognition by saying something like, “I overheard your
explanation to Mr. Smith about how to obtain, use, and the advantages of a debit card.
I’ll bet we will be adding him to our debit card business.” The recognition is a positive
reinforcer for the service behavior leading to increased performance.
A large number of studies over the years have verified that recognition is indeed a
powerful positive reinforcer for employee behaviors leading to performance
improvement in both manufacturing (e.g., Luthans, Maciag, & Rosenkrantz, 1983;
Ottemann & Luthans, 1975; Welsh, Luthans, & Sommer, 1993) and service (e.g.,
Luthans, Fox, & Davis, 1991; Snyder & Luthans, 1982) organizations. A recent meta-
analysis of all studies over the past 20 years that used the O.B. Mod. approach to
behavioral management using recognition as the intervention found an average of 15
percent performance improvement in service applications. When recognition was
combined with performance feedback an average increase of 41 percent in manufacturing
and 30 percent in service organizations was found (Luthans & Stajkovic, 1999; Stajkovic
& Luthans, 1997). Interestingly, the use of monetary reinforcement as the intervention
had about the same impact as the recognition in the service applications, but when the
recognition was combined with performance feedback, it had about the same impact as
the money in manufacturing and about twice the impact as the money in service
applications (30% vs. 14%).
A Social Cognitive Explanation of Recognition
The research and application of recognition in classic behavioral management is
based on reinforcement theory. This reinforcement approach assumes the causal agents
of employee behaviors are found in the functional relationship between the
environmental antecedents and consequences and the behavior they effect (Komaki,
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1986; Komaki, Coombs, & Shepman, 1996; Luthans & Stajkovic, 1999). However,
Bandura (1986, 1997) and others (e.g., Locke, 1997) have argued that reinforcement
theory falls short of providing the needed conceptual process-oriented analysis as to the
nature and operating processes of outcome determinants such as recognition.
Social cognitive theory (Bandura, 1986, 1997, 1999; Maddux, 1995) is emerging
as a richer, more comprehensive explanation of organizational behavior in general
(Stajkovic & Luthans, 1998 b) and incentive motivators such as recognition in particular
(Stajkovic & Luthans, 1999). Starting with Bandura’s (1999) premise that human agency
is grounded in social systems, the social cognitive explanation of recognition as an
incentive motivator for employee performance would have three dimensions: (1) its
outcome utility; (2) its informative content; and (3) the mechanisms through which it
operates to control employee behavior (Stajkovic & Luthans, 1999). An analysis of
recognition along these three lines can lead to a more comprehensive, additive
understanding than is provided by reinforcement theory alone.
Outcome Utility of Recognition.
Bandura (1986) argues that recognition derives its outcome utility from its
predictive value; not just from the social reactions themselves as reinforcement theory
would suggest. Recognition (acknowledgement and approval) precedes and can lead to
desired employee outcomes such as a promotion, a raise or an assignment to a
prestigious, desired project. In other words, recognition may have considerable outcome
utility and incentive value for future employee behavior. Also, it should be noted that
recognition given by those who have the power and resources to make desired outcomes
a reality for the recipient, will have stronger effects than those recognition givers who do
not have such power or resources. For instance, recognition from the boss may have a
stronger effect than recognition from an outside vendor. However, recognition givers
who have considerable respect and credibility (e.g., an admired peer or mentor) may lead
to desirable outcomes such as being included in the in-group and thus also have
considerable impact. As Bandura (1986) points out, “it is difficult to conceive of a
society populated with people who are completely unmoved by the respect, approval, and
reproof of others” (p. 235).
Taken to the workplace, recognition having a positive impact on performance can
draw from this outcome utility explanation from social cognitive theory. Specifically,
this social cognitive approach predicts that employees will engage in behaviors leading to
performance improvement that receive recognition (especially from those that can
provide desired outcomes, either material or social).
Informative Content of Recognition.
Compared to performance feedback, recognition as defined here has relatively
less informative content as suggested by social cognitive theory. Yet, because the
guideline for providing effective recognition insists on specifics, there is informative
content value in what is being expressed. In other words, instead of a generic phrase such
as “good job,” the recognition giver provides detailed information (e.g., “I know that you
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stayed late last night to finish the graphs that I gave you at the last minute. They made
my presentation a great success in the meeting this morning.”) This detailed form of
recognition not only conveys acknowledgement and genuine appreciation, but also
information for reinforcing behavior that can lead to improved performance.
Standardized phrases such as “good job” have no such informative content that can lead
to performance improvement; it becomes an “empty reward,” not a positive reinforcer
detailing how to improve performance.
Recognition as a Regulatory Mechanism.
The outcome utility value and informative content of recognition suggest a richer
explanation and predictive properties. The third dimension of a social cognitive
explanation of recognition would be its role as a regulatory mechanism for human action.
It has been argued (Stajkovic & Luthans, 1999) that the basic human capability of
forethought (Bandura, 1986; Stajkovic & Luthans, 1998b) is the means to cognitively
operationalize recognition as an incentive motivator. This forethought regulatory
mechanism for recognition is explained as follows:
“Based on the recognition received and, thus, the perceived prediction of desired
consequences to come, people will self-regulate their future behaviors by
forethought. By using forethought, employees may plan courses of action for the
near future, anticipate the likely consequences of their future actions, and set
performance goals for themselves. Thus, people first anticipate certain outcomes
based on recognition received, and then through forethought, they initiate and
guide their actions in an anticipatory fashion”(Stajkovic & Luthans, 1999).
What this means is that forethought is the regulatory mechanism that permits perceived
future desired outcomes based on the recognition to be transferred into current and future
employee behaviors that lead to performance improvement. Once again these
refinements and extensions offered by social cognitive theory are compatible with the
power of recognition as a way to improve employee performance.
Refinements and Moderations of the Relationship
Traditionally, based on reinforcement theory and applied through classic
behavioral management, it was implied that recognition had no exceptions or moderators
as to its positive impact on performance. Unlike money, recognition as used in classic
behavioral management is portrayed as always being a positive reinforcer (it strengthens
and increases the preceding behavior), not just a reward (what managers think will have a
positive impact) (see Luthans & Stajkovic, 1999 for a full discussion of the important
differences between rewards and reinforcers in performance management). As the
opening comments indicate, recognition is most often thought of as applying to everyone
and no one gets tired of it.
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Type of Organization
The universalistic notion of recognition still plays a role in application, at least all
other things being equal, but the meta-analysis of O.B. model interventions (Stajkovic &
Luthans, 1997) and the social cognitive theoretical analysis now clearly indicate there are
needed refinements (if not exceptions) and certainly moderators of the relationship
between recognition and performance. Specifically, the theory-driven moderator analysis
of the O.B. Mod. studies found the average effect sizes varied significantly between the
manufacturing and service applications (Stajkovic & Luthans, 1997). The type of
organization was a categorical variable significantly related to the magnitude of effect
sizes. The overall effect regardless of type of O.B. Mod. intervention (money, feedback,
recognition, or combinations) or type of organization was 17 percent. However, the
applications in manufacturing (33%) were much higher than those in service
organizations (13%).
Although a direct comparison between recognition only interventions and the
other types of interventions was not possible with these data, when recognition was used
in combination with feedback only and with feedback and money, the significant
difference of manufacturing applications over service held. In other words, the principle
of recognition seems to work better in manufacturing than in service organizations.
However, this conclusion needs to be tempered by the fact that no study to date has
directly tested this proposition. Also, it may be that there is more difficulty in identifying
performance related behaviors in service than in manufacturing, rather than the lesser
effect of recognition in service organizations.
Task Complexity
As the previous discussion indicated, a social cognitive explanation of recognition
goes beyond reinforcement theory by getting at the very nature and underlying
mechanisms of its relationship to performance. This analysis leads to some additional
qualifying refinements and potential moderators. In particular, we feel that the level of
task complexity may be another important moderator. Relevant to a social cognitive
analysis is the fact that different levels of task complexity have different effects on the
behavioral, information processing, and cognitive capacities of the task performer
(Bandura, 1997; Stajkovic & Luthans, 1998a; Wood, 1986). Specifically, the higher the
task complexity, the greater the demands on the employee’s (1) knowledge, (2) skill
capacity, (3) behavioral facility, (4) information processing, (5) persistence, and (6) self-
efficacy (Bandura, 1986, 1997; Stajkovic & Luthans, 1998a). In these types of demands
for highly complex tasks, recognition may take on relatively more importance for the
employee, manager or staff specialist than say alternative consequences such as money.
The Role of Self-Efficacy
Besides task complexity, self-efficacy may also be an important moderator for the
recognition-performance relationship. In a social cognition interpretation, recognition
derives its power and importance from forethought as already discussed, but, especially
for complex tasks, also from self-efficacy (Bandura, 1986, 1997). Self-efficacy is the
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belief in one’s capabilities to organize and execute the courses of action required to
produce outcomes in a specific context (Bandura, 1997; Stajkovic & Luthans, 1998b).
When faced with a specific task or job to perform, an employee’s efficacy determines
whether the necessary behavior will be initiated, how much effort will be expended and
sustained, and how much persistence and resilience there will be when there are obstacles
or even failure (Bandura, 1997, 1999; Stajkovic & Luthans, 1998b). This efficaciousness
has been shown to strongly relate to work performance (a .38 weighted average
correlation in the recent meta-analysis of 114 studies, Stajkovic & Luthans, 1998a).
Self-efficacy is generally recognized as a state, rather than a trait, and thus can be
developed and trained. The most important input into the development of self-efficacy is
mastery experiences, modeling/vicarious learning, social persuasion and arousal
(Bandura, 1997; Stajkovic & Luthans, 1998b). Recognition would have direct or at least
indirect implications for each of these developmental dimensions of efficacy. For
example: (1) recognition would be confirmation of success; (2) seeing others being
recognized would be vicariously reinforcing; (3) recognition framed as social persuasion
would enhance the receivers’ beliefs as to what they can do with what they already have
(without requiring new knowledge and skills); and (4) of course recognition would arouse
the receivers to stay the course and persist when meeting future obstacles and problems.
In other words, recognition may help build efficacy and those with higher efficacy will
perform better. As Bandura (1997) notes, it is not behavior [and in this case the
consequence of recognition] that causes behavior, but what is psychologically made out
of it [in this case efficacy development].
Implementation Guidelines
Nelson (1994) provides practicing managers 1001 Ways to Reward Employees.
This book, consists of three major parts:
1. Informal rewards. This part includes sections on no-cost recognition (e.g.,
all employees at Apple Computer who worked on the first Macintosh had
their signatures placed on the inside of the product); recognition activities
(e.g. at South Carolina Federal Financial Services, the president and other
top managers serve employees lunch or dinner in recognition for a job
well done); public recognition/social rewards (e.g., honor peers who have
helped you by recognizing them at meetings and recognize people who
recognize others); and examples such as the role of communication, time
off, celebrations and the use of gift certificates, merchandise and
recognition items (trophies, pins, and plaques).
2. Awards recognizing specific achievements and activities. This part
contains sections with accompanying real-world examples on recognizing
outstanding employees, productivity/production/quality, employee
suggestions, customer service, sales goals, group/teams, attendance and
safety awards. For example, at Home Depot each store picks an Employee
of the Month (the criteria being someone who has given time to an area of
the store that technically lies outside his or her responsibility). The
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recipient is given $100, a merit badge (five badges earn an extra $50), a
special pin to wear on his or her apron, and the honoree’s name engraved
on a plaque displayed at the front of the store.
3. Formal recognition rewards. This last part is more concerned with formal
reward systems per se, rather than ways to specifically recognize
employee behavior for performance improvement. It has sections with
actual examples of multi-level reward/ point systems, contests, field
trips/special events/travel, education/personal growth/self-development,
advancement/responsibility/visibility, stock/ownership, employee/
company anniversaries, benefits/health/fitness, and charity/social
responsibility. For example, Tenneco has Tennwood which features a
twenty-seven hole golf course, swimming pool, tennis courts, an outdoor
dance floor and fishing lakes--all free to employees; a large fleet of vans
to pick up employees, covers most of the cost for monthly bus passes and
subsidizes parking expenses for car pools; and an on-site health and fitness
facility providing all clothing needed for a workout, including socks and
athletic supporters. Levi-Strauss makes a donation of $500 to community
organizations in which an employee actively participates for a year.
Practice Supporting the Theory and Research
The Nelson (1994) 1001 book and many other books and articles in the consulting
and practitioner literature (e.g., see: Dolmat-Connell, 1999; Hale & Maehling, 1992;
Levering, Moskowitz, & Katz, 1985) provide numerous examples and guidelines for
implementing recognition as a way to improve performance. Most of this considerable
practitioner-oriented literature is in line with and supports the theory and research
outlined. For example, some representative quotes taken from practitioners in Nelson’s
(1994) book supporting the universal reinforcing value of recognition per se would be the
following:
“Money is not going to have the same impact with upper level management as it
does with lower salaried employees. However, everyone appreciates
recognition.” – Martha Holstein, Associate Director, American Society on Aging.
“Human Beings need to be recognized and rewarded for special efforts. You
don’t even have to give them much. What they want is tangible proof that you
really care about the job they do. The reward is really just a symbol of that.” –
Tom Cash, Senior Vice President, American Express.
“Incentive awards are not compensation – they are recognition – a meaningful
way to say thank you…recognition for a job well done” – The MBF Group, Inc.
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The quotes also support how this reinforcing recognition leads to higher performance:
“Once employees see that what they do makes a difference to the organization
and is valued, they will perform at higher levels” – Rita Numerof, President,
Numerof & Associates.
The quotes even lend support to the more complex social cognitive explanation of
recognition involving outcome utility, informative content, and regulatory mechanism.
“My main motivation is the recognition. It’s very competitive and tough to move
ahead here, so going to the awards luncheons and meeting the VP’s is a good way
of gaining visibility. My main purpose is to move ahead in my job, not to win a
prize. If being a top performer helps me get promoted, it’s a means to an end.” -
Sara Navarro, Senior Sales Representative, U.S.A.A.
In addition to the antidotal/qualitative evidence supporting the theories explaining
recognition, the practitioner-oriented, professional literature also contains some empirical
support. For example, a recent nation-wide survey of U.S. workers found that nearly
seven out of 10 (69%) report that non-monetary forms of recognition provide the best
motivation (HR Focus, 1999). A contingency implication for implementation (and also
supporting a social cognitive interpretation) was that this same survey found employees
favor recognition from managers and supervisors by a margin of almost 2-1 over
recognition from coworkers or other sources.
Another recent study with contingency implications was a meta-analysis patterned
after Hunter and Schmidt (1990) conducted on the Gallup Organization database of 28
studies involving 105, 680 employee responses to surveys from a wide variety of
organizations. The survey item dealing with recognition (“In the last seven days, I have
received recognition or praise for doing good work”) was significantly related to 2, 528
business units’ outcome measures of customer satisfaction/loyalty, profitability and
productivity, but not turnover (Harter & Creglow, 1999). In other words, even though
conventional wisdom and some surveys (Nelson, 1996) indicate that recognition (or at
least appreciation) is a major determinant of retention, this large empirical study does not
offer such support.
Formal vs. Social Recognition
Reinforcement and social cognitive theories and the findings from the meta-
analysis of research studies over the past twenty years (Stajkovic & Luthans, 1997),
mostly refers to managers providing social recognition contingent upon individual
employees’ (and to a lesser extent group/team) behaviors that lead to performance
improvement. Although the recognition that is inherent in formal, non-financial reward
systems and programs are included in the definitional domain provided at the beginning
of the paper, we would suggest that for implementation the social recognition would have
relatively more impact than these formal recognition approaches. This is because the
one-on-one contingently administered recognition (of the form stated earlier “the
employee knows that his or her supervisor/manager knows”) tends to be a reinforcer, but
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the formal recognition in the form of some type of award or benefit tends to be a reward
(management thinks this will strengthen the employee behavior and lead to performance
improvement) rather than a reinforcer (the behavior will indeed strengthen and lead to
performance improvement). In other words, we would say that formal recognition is
more like money. As advocated in the recent analysis of pay for performance, “Reinforce
for Performance: The Need to Go Beyond Pay and Even Rewards” (Luthans & Stajkovic,
1999), also would apply to formal recognition programs.
The reason formal recognition can be a reward rather than a reinforcer is that it
turns into being phony, not valued by the recipient, or goes against the cultural norms.
For example, a formal recognition award such as the “Golden Banana” at Hewlett-
Packard or “Employee of the Month” given at most companies can initially be a
reinforcer, but over time may cross the fine line and become phony or even a joke. The
first few employee of the month recipients may be very deserving and everyone agrees
with, but over time selections become more and more controversial and less or not
qualified. At this point company politics often come into play and those earlier who truly
deserved the recognition feel betrayed. Also, from a cultural values and individual
differences standpoint, although everyone may like to be recognized for their efforts and
achievements, not everyone likes to be singled out in the public way that usually goes
along with formal recognition.
The implementation guideline to get around these problems associated with
formal recognition would follow from the reinforcement and social cognitive theoretical
foundation. One guideline would be to use formal recognition awards contingent upon
objectively measured performance. The key is that everyone involved must perceive that
the formal, public recognition is truly deserved. For example, formal awards based on
sales performance (the famous pink Cadillac at Mary Kay Cosmetics or a plaque given
for selling 5 million at a real estate firm’s banquet) would be appropriate and effective,
but many outstanding performer of the month awards (or teaching awards in academic
institutions for that matter) may not be. The latter are subjectively determined and in
order to be effective as a reinforcer for performance improvement, they must be as
objective as possible and be perceived by the recipient, and even more so by others, as
being fairly selected (i.e., procedural justice). This guideline is compatible with both
reinforcement (e.g., objective, contingent consequence) and social cognitive (e.g.,
perceived fairness and vicarious learning) theories.
Another implementation guideline is to depend on and provide relatively more
informal, social recognition than formal recognition. Contingently given social
recognition dominates the reinforcement-based classic behavioral management approach
presented at the beginning of the paper and has been clearly demonstrated to increase
performance (Stajkovic & Luthans, 1997). However, the more recent additive social
cognitive theory would also suggest the importance of formal recognition on the basis of
outcome utility, informative content, and regulatory mechanism (Bandura 1986, 1999;
Stajkovic & Luthans, 1999).
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Importantly, the implementation guideline is not to eliminate formal recognition.
The social cognitive perspective suggests the value of grounding private social
recognition in public, formal recognition. However, the guideline above would add that
the more objective and fair this formal recognition, the better. In fact, performance
management consultants use a four-to-one guideline. For example, Allen (1994) states,
“If people receive social reinforcement on the four-to-one ratio (a minimum of
four socials to one tangible) and receive reinforcers for behaviors, not only
results, they will view the tangible as a symbolic representation of appreciation.
Then tangibles become items which serve as reminders of the social
reinforcement they have already received. A tangible reinforcer carries the most
impact when it symbolizes the recognized behavior or result” (p. 25).
Once again reinforcement theory would say that the social recognition is reinforcing per
se, but the social cognitive theory would suggest that the formal recognition is at least
needed once in awhile to provide outcome utility (e.g., a raise, promotion, or special
assignment), informative content (what does the organization value), and regulatory
mechanism (forethought on developing strategies to obtain desired outcomes).
Application Examples
Nelson’s (1994) book contains 1001 real-world examples, a number of which are
short cases of mostly formal recognition programs in well known firms such as Kodak,
Honeywell, American Express, IBM, GTE, Procter & Gamble and a host of smaller
firms. Most of these are richly described with specific individuals and details of the form
of recognition which was used to improve performance. At best, however, only a very
few of these provide any, even descriptive, data on the effectiveness of these formal
recognition programs, and of course none use research designs or statistical analysis to
test hypothesis or draw causal conclusions. In total, however, these examples do provide
considerable anecdotal evidence and testimony on the effectiveness of formal recognition
programs in improving performance.
The following are representative from empirical studies of manufacturing and
service applications using informal recognition interventions. Most of these allow causal
conclusions to be drawn on the effectiveness of recognition in improving performance.
The last application listed, however, had mixed findings and some problems with a
positive recognition approach. These studies are summarized and largely drawn from
Luthans (1992: 247-256) and generally followed the five step O.B. Mod. model (identify,
measure, functionally analyze, intervene with contingent recognition, sometimes in
combination with feedback, and evaluate) (Luthans and Kreitner, 1975, 1985; Stajkovic
& Luthans, 1997; Luthans & Stajkovic, 1999).
Medium-Size Light Manufacturing Firm
This field quasi-experiment conducted by Ottemann and Luthans had two
matched groups (experimental and control) of nine production supervisors each. The
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experimental group received training in classic behavioral management by the
researchers. The intervention involved supervisors’ recognition contingent upon their
workers exhibiting the identified performance-related behaviors. On the charts kept by
each trainee (step 2 of the O.B. Mod. behavioral management approach) it was clearly
shown that in all cases they were able to change critical performance-related employee
behaviors. Examples of behavioral changes accomplished by the supervisors included
decreasing the number of complaints, reducing the group scrap rate, decreasing the
number of overlooked defective pieces, and reducing the assembly reject rate. The most
important result of the study, however, was the significant impact that the recognition
intervention had on the performance of the supervisor’s departments. By use of a pretest-
posttest control group quasi-experimental design, it was found that the experimental
group’s departments (those in which the supervisors used the recognition intervention in
their behavioral management) outperformed the control group’s departments. Statistical
analysis revealed that the department production rates of supervisors who used the
recognition intervention increased significantly more than the department production
rates of the control supervisors.
Largest Meat-Packing Plant in the World
This study was conducted by Luthans, Maciag and Rosenkrantz in the very tough,
labor intensive meatpacking industry. In the largest packing plant in the world (in terms
of employees and output), 135 production supervisors were trained by the researchers in
classic behavioral management and used social recognition as the intervention. The
recognition was contingently applied by the trained supervisors to identified employee
behaviors such as performing a particular operation more efficiently or delivering a
certain piece of material in a more timely manner.
This behavioral management with recognition as the intervention had a positive
impact on all product areas in which it was applied. There was wide variation, but utility
analysis indicated that although there was only a 2 percent gain in product 2, this still
translated to an annualized value of nearly $900,000 in this company, and the 1.4 percent
gain in product 6 equated to an annualized value of about $750,000. The projected
annual values of the gains in other product areas were estimated for this company as
follows: product 1, +$259,000; product 3, +$510,000; product 4, +$371,000; and product
5, an impressive + $2.276 million.
It should be noted that this study did not contain the design methodology as the
medium-size light manufacturing study presented first. Thus, the results in this study
cannot lead to the same causal conclusions concerning the impact of contingent
recognition. Yet, there is still considerable evidence that recognition did lead to the
improved performance. For instance, when examined closely, the performance changes
following the staggered starting dates of the program support the conclusion that the
effects were indeed caused by this approach rather than some other factor. This is a
simplified version of the multiple-baseline design from which causal conclusions can be
drawn. In every product area tracked in this part of the analysis, the start of the program
was followed almost immediately by a clear improvement in the quality or quantity of
performance.
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Large Comprehensive Hospital
This hospital study in the fast growing, but much less structured than
manufacturing, health care industry was conducted by Snyder and Luthans. Similar to
the manufacturing applications, 11 supervisors from medical service, business, and
operations units were trained by the researchers in behavioral management and used
contingent recognition as the intervention. The results showed that there was
improvement in all the performance measures. For example, over the two months of the
intervention, emergency room registration errors (per day) decreased 76%; medical
records errors (per person per audit) decreased 97%; average output of transcriptionists
increased 2%; EKG procedures accomplished increased 11%; drug output (doses) in
pharmacy increased 21% and waste decreased 25%; retake rates (percent) in radiology
decreased 11%; and in the admitting office time to admit decreased 69% and average cost
decreased 22%.
Although we were unable to employ an experimental design in this study (and
therefore cause-and-effect conclusions are not warranted), the simple before-and-after
analysis provides a rather convincing argument that the recognition intervention was
effective in modifying a broad range of performance-related behaviors in a hospital
setting. This approach seemed to affect both the quality and the quantity performance
measures. Moreover, the data indicate that each of the trained supervisors was successful
in applying the intervention, despite the wide variety of situations encountered.
The Teller-Line in a Bank
Unlike the manufacturing and even the hospital applications, which had specific
performance outcome measures, this service application conducted by Luthans, Fox and
Davis measured teller—customer quality service interactions as rated by customers. The
study used a pre-test post-test control group quasi-experimental design. The
experimental group was the teller-line at a branch of a medium-sized bank and the control
group were the tellers at another branch of the same bank. The researchers gathered
baseline, intervention and post-intervention data unobtrusively (around the corner from
the teller line) from customers right after the interaction with the tellers in both the
experimental and control groups. The customers rated the service they received
according to six key dimensions that were identified as being most important: greeting,
eye contact, speed of service, degree of help offered, personal recognition of the
customer, and appreciation for the customers business. An overall perception of the
quality service for the transaction was also obtained. These ratings were gathered
randomly over a ten-day period in each phase of the experiment. Since the data was
collected out of site of the tellers, they were unaware this was happening (follow-up
interviews indicated this was the case).
The intervention consisted of identifying, fully describing in behavioral terms,
and emphasizing the importance to customer service of the six dimensions to the tellers
and their supervisors in the experimental group. In particular, the supervisors were
carefully instructed by the researchers to provide contingent recognition when observing
14
these six dimensions being exhibited by their tellers. This recognition was given
throughout the intervention period, but then the recognition was withdrawn and
mentioned in the post-intervention (reversal) period. The researchers were frequently on-
site to remind the supervisors during both phases of the experiment.
The results indicated that in the pre-intervention, baseline period there were no
significant differences between the experimental and control groups on any of the six
categories. However, during the intervention period, four of the six dimensions (greeting,
speed of service, personal recognition and appreciation) were significantly higher in the
experimental group. The means of the dimensions were relatively constant throughout all
three phases for the control group, thus providing evidence of minimizing the threats to
internal validity. Also, in the post-intervention, reversal stage, except for one dimension
(speed of service) which dropped below the control group, the between-group means
were not significantly different. The overall measure of quality service was not different
during baseline, significantly higher for the experimental group during intervention, and
then not different during the post intervention. In other words, like the manufacturing
applications, a contingent recognition intervention seems to have a causal positive impact
on customer service performance.
CONCLUSION
The purpose of this paper was to examine the theory, research and practice of the
impact of recognition on employee performance. Recognition was initially given a
theoretical explanation in reinforcement theory for its universal appeal, but in an additive
sense, its more complex nature needed to be explained by social cognitive theory. Recent
meta-analytic research reveals the type of organization moderates the recognition—
performance relationships. Social cognitive analysis also suggests that moderators such
as task complexity come into play and the state of self-efficacy may be enhanced by
recognition, which in turn helps explain performance improvement.
Because of the broad appeal and popular use of both formal and informal
recognition, there are numerous examples and guidelines for effective implementation.
However, in the academic literature, there are very few studies that test the impact of
recognition on work performance. The representative studies summarized here indicate
that recognition does have a positive impact in both manufacturing and service
applications. For the future, there is a need to go beyond reinforcement theory
explanations and research on the role of moderators such as task complexity and self
efficacy needs to be conducted so that there can be even more effective application of
recognition for employee performance.
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