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Handle With Carrot: A Q&A with Chester Elton

A Revealing Q&A with Motivation Guru Chester Elton

One of the undisputed “thought leaders” in employee motivation and recognition, Chester Elton was a keynote speaker at the 2007 and 2008 Motivation Shows at Chicago’s McCormick Place. Elton is the co-author of several wildly successful management books and serves as a recognition consultant to Fortune 100 firms such as DHL, KPMG, Wal-Mart and AVIS Budget Group. He is the Senior Vice President of the Carrot Culture Group with the O.C. Tanner Recognition Company.

Elton’s most recent book, The Carrot Principle, co-authored by Adrian Gostick, was published in January 2007 and is a national bestseller, ranking among the top 10 bestsellers by the New York Times. Also by Elton and Gostick, The 24-Carrot Manager and A Carrot a Day are sold in more than 50 countries worldwide.

Elton sat down with Engagement Strategies to discuss his latest book and how the best managers use recognition to positively impact performance and their bottom lines.

Engagement Strategies: What were the most surprising results found in researching your new book, The Carrot Principle?

Elton: This was the first time anybody really looked specifically at the impact of recognition, how recognition really impacts engagement, job satisfaction, return on equity and operating margins. The research included 235,000 participants through focus groups, surveys and case studies. And the results were pretty dramatic. Probably the most interesting result was how recognition affected engagement, which is kind of a buzzword right now. Everybody wants to know how to get their employees engaged.

One survey – the results of which are included in Appendix C of The Carrot Principle – asked questions like, “Do you want to be working for your current employer a year from now?” Among those who reported they worked in high-recognition workplaces, 70% wanted to be working in the same place next year. The more recognition a person got at work, the more engaged they were and the higher scores they gave their workplace. You had to be a high-recognizing manager to get high scores in engagement. The research makes it clear that employees want a plan; they want consistency; they want to know that when they do a good job they’ll be recognized. That was a big “aha” – that you really have to have a plan and work the plan.

ES: How does effective employee recognition affect a company’s bottom line?

Elton: That was another big “aha,” to see empirical data proving that recognition has a major impact on business results. We accessed 2,100 different surveys in 31 companies that said, “My company recognizes me for excellence.” We correlated the business results of those high-recognizing companies, and we found that companies that are high recognizers have a three-to-one advantage over those that aren’t rated high in the areas of Return on Assets and Return on Equity. And high-recognizing companies have a seven-to-one advantage in operating margin. So does recognition pay? Uh, yeah. We thought if you could get a 5% or 10% increase [in business results] in the high-recognizing companies, that would be great. But three to one was outstanding.

ES: Why is it so difficult for managers to recognize employees effectively?

Elton: There’s a whole section in The Carrot Principle about the excuses managers use for not recognizing employees, and another chapter of 125 ideas of how to do it and why you should. Often, managers say, “I don’t have time.” But that really means, “I don’t value you and what you’re doing.” It doesn’t take a ton of time; it takes 90 seconds to write a handwritten thank-you note and two minutes to make an award presentation. Seventy-nine percent of employees leave their jobs for lack of recognition, not for lack of a pay raise. Once you get employees to show up, how do you get them engaged? You recognize them. We broke up the data into four categories: goal setting, communication, trust and accountability, which are four basic tenets of leadership. The correlation of managers that were high users of recognition and those four ideas was such that it would be statistically impossible to excel in those four categories and not know how to recognize your employees.

ES: So if you’re a really good manager, recognition should just come naturally?

Elton: Yes. When we’re working with companies to train managers, that’s what we focus on. We try to make recognition something that’s second nature.

ES: How can managers make recognition a strategic part of their organization’s operations?

Elton: Make sure you’re rewarding the right behavior. Whatever your mission and values are, that’s what you reward. For instance, if your goal is to manufacture with zero defects, that’s what you reward. If you reward me for zero defects, I’m likely to do it again.

ES: What are the most important components to an effective recognition strategy?

Elton: Consistency, but it should also be frequent, specific and timely. Generic praise has no impact. You have to be specific. You might say, “I know you chased the truck down to make sure we got that delivery out on time,” or “Hey, I saw how you handled that customer.” There are four building blocks to an effective recognition strategy: day-to-day recognition, above-and-beyond recognition, career recognition and celebration events. Each one must be used regularly and at the appropriate times. If I stay late one night and make sure the books are straight, my manager can say something to me about it and maybe write a note. But if I get together with my team and figure out a manufacturing method that saves the company $10 million, a thank-you note just doesn’t get it.

ES: The workplace is changing as Boomers age and Generations X and Y move through the ranks. Does today’s workforce expect more (or different forms of) recognition than in the past?

Elton: Absolutely yes. That’s why The Carrot Principle is more important than ever. Recognition will definitely impact the engagement level and success of younger workers. The youngest generation is used to going to a tournament with their soccer team, losing every game and still getting trophies. You’ve got to have a strategy that says, day to day, we recognize our employees.

ES: So should organizations do the same thing for older workers too?

Elton: Older workers get a little jaded about those things. They may think, “Hey, I’ve been here 30 years and nobody threw confetti for me when I walked in the door.” But they’ll be the mentors for the younger workers, and they need to be rewarded too. You have to be consistent. Make sure it’s purpose-driven, and build on those concepts of frequency, specificity and timeliness. Make it fun.

ES: What else would you like managers to know about recognizing their employees?

Elton: To sum up the whole book, nice guys finish first. Managers who really appreciate their people and treat them well come out on top. That’s good to know in the dog-eat-dog world of business, that nice people really do finish first.

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