What can we learn about peer recognition from a Nobel Prize winner in economics and a piece of advice relating to how to raise children. Two things, I suggest. First, employee recognition is likely to be even more important than we thought it was. Second, employee recognition should come not just from management but also from colleagues. How do we get from Nobel Prizes and child rearing to these conclusions? Well that takes a bit more explanation.
The “why” of employee recognition
Employee recognition almost certainly matters more than you think it does. Why? The answer lies in a story that the Nobel Prize winner Daniel Kahneman recounts in his book, Thinking Fast and Slow. Kahneman, a psychologist, had given a talk to members of the Israeli air force about research showing that praise motivates better than criticism. Once Kahneman had finished, one of the listeners raised an objection. Kahneman must be wrong, this person said, because in their experience, the exact opposite was true: every time they praised a person, that person did worse the next time that they carried out that same task and every time they punished a person, that person did better the next time that they did the task.
Did Kahneman get it wrong? Was this objector mistaken? The answer, it turns out, is that neither of these is the case: both Kahneman and the objector were right. How can this be true? To answer this question, we need to consider the statistical concept of regression to the mean. To get at this concept, let’s first imagine that I’m terrible at basketball (for those who know me, this will not be hard to imagine). So we can pretend that if I take ten shots I will normally score five times. Now consider, however, one occasion where I’m lucky and score seven times. After this, what will happen the next time I play? Well, I almost always score five times so on this occasion I will probably play worse than I did when I scored seven. So my strong performance will normally be followed by a comparatively weak one. How about if I am unlucky on some occasion and only score three times? Well, given that I almost always score five times, the next time I will probably play better than I did when I scored three. So a poor performance is almost always followed by a comparatively strong one. Overall, then, good performances are followed by poorer ones and poor performances are followed by better ones. This pattern is called regression to the mean.
Now consider the air force case again. Presumably Kahneman’s objector only gave praise when one of his pilots did particularly well. Now it may be true that the pilots then tend to do worse on their next flight but we can now see that this has nothing to do with praise making them perform worse: instead, this decreased performance is simply due to regression to the mean. On the other hand, presumably the objector only gave criticism when the pilot did particularly poorly. And it may well be true that the pilots tended to do better after this criticism. But again, this change in performance need not come down to the criticism. Rather, this can be explained via regression to the mean. So Kahneman was right that praise works better than criticism but regression to the mean can disguise this fact.
Of course, the same process takes place in our offices: when we offer praise and recognition, it will often be followed by decreased performance, and when we offer criticism, it will often be followed by performance increase. And because our minds subconsciously pick up on this sort of pattern, we will be led to subconsciously underestimate the value of recognition.
The point: regression to the mean means that recognition is almost certainly even more valuable than we think it is.
The “who” of employee recognition
1998 saw the publication of one of the most controversial popular psychology books of the decade: The Nurture Assumption. In this book, Judith Harris argued that the way children turn out depends almost entirely on their genetics and their peers (in particular, she argued that parents play only a minor role in this process). While this view has attracted a great deal of controversy, a more moderate view is much more widely accepted: a child’s peers play a key role in how they turn out. And from this, we can extract a piece of parenting advice: parents should make an effort to help their children end up with a desirable peer group.
Now a question: what can we learn about employee recognition from this bit of parenting advice? We can make a start toward finding an answer by noting that, plausibly, one of the reasons that peer group matters so much to children is simply an issue of time: children spend a lot of time with peers. With this issue front of mind, we can now ask a question about employees: who do they spend most of their time with? And the answer, for most businesses, is that they spend at least as much time with colleagues as they do with management. Given this, it seems likely that the opinions of colleagues will matter to employees in something like the way that peers matter to children. Unfortunately, however, many employee recognition programs don’t really involve colleagues at all (perhaps beyond a token vote on an employee of the month program, or something similar). Reflecting on the parenting advice lets us see that this is a mistake: colleagues matter too much to other employees to be left out of employee recognition.
So the answer to they “who” question of recognition? Recognition should come from colleagues as well as management.
A call to action (of sorts)
What should we do with this information? Two things, I suggest: we should think, and we should act. But thinking first. As Daniel Kahneman once said, “If there is time to reflect, slowing down is likely to be a good idea. The effort invested in “getting it right” should be commensurate with the importance of the decision.” I have suggested that employee recognition is important. Therefore, it is worth investing time getting it right.