RECOGNIZING EMPLOYEES THROUGH INCENTIVE AWARDS A GUIDE FOR FEDERAL EXECUTIVES AND SUPERVISORS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP60-00442R000100080004-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 15
• Document Creation Date: November 17, 2016
• Document Release Date: August 4, 2000
• Sequence Number: 4
• Publication Date: September 1, 1954
• Content Type: REGULATION

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Recognising Employees
through
Incentive Awards
A_ GUIDE FOR FEDERAL -EXECUTIVES
.AND SUPERVISORS
FOR 'FURTI- ER I1 FORI'Vl'.ATION cONfAI
EXECUTIVE SECRETARY, INCIINTI\'IT AWW77ARI6 CO ,'lII I
CURIE HAIL, XTENSION 709
124
UNITED STATES CIVIL SERVICE COMMISSION
SS7NNEL MANAGEMENT SERIES NO. 5
SEPTEMBER 1954
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Acknowledgment
This pamphlet was prepared by an interdepartmental committee com-
posed of the following persons:
JOHN A. WATTS, Chairman, Department of the Air Force
ROBERT BEAR, Department of Agriculture
LEONARD G. BERMAN, Department of the Air Force
ROBERT I. BIREN, Foreign Operations Administration
CHARLES V. DENNEY, Jr., U. S. Civil Service Commission
CECIL E. GOODE, Federal Civil Defense Administration
MILTON HALL, Department of Health, Education, and Welfare
E. E. KRIEGESMAN, Department of Agriculture
CHARLES PARKER, Bureau of the Budget
0. GLENN STAHL, U. S. Civil Service Commission
UNITED STATES CIVIL SERVICE COMMISSION
September 1954
For sale by the Superintendent of Documents, U. S. Government Printing Office
Washington 25, D. C. - Price 15 cents
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Foreword
The will to work is a complex thing. Sometimes when we read about incentives, we get the
impression that they are very simple, that after a man is employed by the best methods and paid
adequately, then various "awards" dangled in front of him like a carrot in front of a donkey
will insure that he works at his best.
Actually, motivation of a worker to do his utmost is a highly individualized matter. The
problems of motivation vary with the nature of the organization, the attitudes prevailing
among people who have been associated with the organization for a long time, different periods
in an organization's history, and different stages in an individual employee's career. An award
that may be a true incentive in one time and place may have little or no effect in another. An
award, or expectation of an award, that spurs one employee to great effort may leave another
employee indifferent. On top of this, there is the problem of handling individual recogni-
tion in such a way that cooperation among individuals is not jeopardized. Overstress
on individual achievements may sometimes hold back good teamwork, as some of our great
athletic coaches have learned. Also, it should be understood that incentive awards are
concerned with "recognition" as well as with cash.
"Bigness" in modern organizations, which tends to separate management from the worker
does not make an individualized approach easy. Success in the use of awards, therefore, is
more dependent on the qualities of supervisory leadership than on any other condition. This
is usually the kind of leadership that understands and uses awards and recognition as only one
facet of good employer-employee relations, only a part of the complex of drives that motivate
people to do their best work.
These and many other problems make the subject of incentive awards one that cannot be
reduced to a simple formula. It is not one to be settled merely by high-pressure campaigns to
get supervisors and employees to make use of awards. A great deal of fact finding in an indi-
vidual situation is necessary. An organization that successfully uses incentive awards usually
relies more on careful analysis than on supersalesmanship.
This pamphlet has been prepared primarily for executive and supervisory personnel in the
Federal civil service. It is not a catalog of rules and regulations, but an attempt at a rational
discussion that will help orient the executive who has not had time to give adequate considera-
tion to the problem. It is hoped that it will lead to more intelligent use of awards and will
avoid some of the difficulties that have been found in award and recognition systems in the past.
JOHN W. MACY, Jr.,
Executive Director.
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Contents
Page
I. The Importance of Recognizing Good Work . . . . . . . . 5
II. Making an Incentive Awards System Work . . . . . . . 8
III. Incentives Available in the Federal Service . . . . . . . 14
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I
The Importance of Recognizing
Good Work
Why Do People Work?
Basically, people work to earn a living. While that is an obvious purpose
for working, it is not the sole reason nor, for many, the most important.
The more productive our activity is toward meaningful achievement, the
happier we are. Work without pride of achievement is indeed an empty
existence for employees and a costly one for management. The famous
labor leader, Clinton S. Golden, has said:
"It must always be borne in mind that it is not exclusively the hope of
material gain that prompts workers to organize or to respond to appeals to
organize. It is the striving for more adequate means of expression, the
desire for personal recognition, self-respect, and a creative, self-satisfying
role in modern industrial society."
Of course, everyone does not work for precisely the same reasons, and
there are all degrees of work satisfaction. What are some of the principal
satisfactions which people derive from their work?
1. They have a sense of achievement.-They are creating something of
value or are rendering a service to their fellow beings.
2. They are recognized for their achievements.-They receive recognition
in ways other than through the paycheck.
3. They are paid in accordance with their achievement. They know
that they will be compensated in the measure of their contributions toward
the goals of the organization.
4. They are able to respect their leaders. Their leaders are capable,
understanding, and democratic human beings.
5. They feel reasonably secure in their work.-This includes security in
their bread-winning prospects and in their status among their fellow
workers.
6. They feel that they have an opportunity to get ahead.-They can look
forward to something better.
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7. They have an opportunity to participate in decisions affecting their
work.-They know what is going on around them and have an opportunity
to contribute to the policies of the organization of which they are a part.
8. They are working in congenial surroundings.-Their colleagues are
friendly and honest, and the physical environment is pleasant.
Modern Organization and Human Incentive
Not long ago, most of the work of the world was done by small organiza-
tions. All types of organizations-business, industrial, governmental-
have become progressively larger until now big organizations are common
in this country. When most people worked in small shops or in family
enterprises, the satisfactions of doing a good job were close at hand and
easily discernible. They had the finished product itself which they could
see, and they could easily enjoy the satisfying relationships of the people
with whom they dealt. As organizations have become larger, work has
become more impersonal and many of the compensations of good work
have been lost.
Modern personnel administration has attempted to correct some of the
undesirable results' of big business, big industry, and big government, so
far as the workers are concerned. It has increased awareness of the signifi-
cance of human beings in the success of any endeavor. One of the tech-
niques provided by modern personnel administration is planned and or-
ganized employee recognition systems.
Importance of Employee Recognition Systems
Recognition of superior performance through the granting of decorations,
medals, property, or rights is very old. In military services, bravery was
recognized in ancient times by granting citizenship to slaves who fought
well and by gifts of estates or titles, as well as by advancement or promotion.
Similar rewards were given to civilians who made outstanding contributions
to their city or country.
Awards sometimes carry great monetary value. A Roman hero might
have obtained the tax concession of a province. Whittle, the British in-
ventor of the jet engine, was both knighted and granted #ioo,ooo tax free,
a tremendous fortune in today's England. On the other hand, most
awards for bravery in battle mean a decoration and nothing more, but they
are no less valued.
Such actions have at their base: (i) A demonstrable service to the State
or employer; (2) the desirability of recognizing such service in a tangible
form; and (3) the value of the recognition as an incentive to others. Be-
cause contributions vary widely in nature and value, and because indi-
viduals are appealed to in different ways, the awards granted must likewise
be varied in both kind and value.
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Many employers have decided that it is good business to provide a varied
program of awards for special accomplishments. Contributions which
plainly save money are rewarded with a share of the savings; other contri-
butions merit citations or commendations meaning prestige among one's
fellow employees and possibly promotion. Appropriate publicity is given
to all such situations to encourage other workers and to show the employer's
sincerity in seeking out and recognizing such accomplishments.
We have noted that one of the important satisfactions from work is recog-
nition for work well done. Recognition in the present day of big organiza-
tions cannot be left to chance. At the same time, it must not be assumed
that workers are not recognized unless an organization has a formal em-
ployee recognition system. There are always forms of recognition for good
work whether or not a formal system exists. Nor do recognition systems
provide the entire answer to the problem of increasing job satisfaction.
Planned systems of employee recognition do remind management to give
this responsibility deliberate attention, insure reasonably comparable recog-
nition or awards for outstanding achievement, and compensate for the lack
of closeness of the average worker to the end product of his labor.
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II
Making an Incentive Awards
.System Work
Success Depends on the Attitude
What makes an incentive awards program work? The answer lies less in
the organizational setup than in the attitudes of those who are using it.
Where management is thoroughly interested in employee participation, any
of a number of systems will work. If management is not genuinely con-
cerned to get full participation by employees, the most elaborate machinery
for encouraging maximum employee response will not sustain the program.
Whatever the mechanics of the program, they must reflect a philosophy
that recognizes the dignity of the individual employee and his potential
contribution in a cooperative enterprise.
Flexibility and Variety
The range of incentive awards should be broad enough to give suitable
recognition to people employed in various occupations and at different
levels. Monetary recognition means more to some employees than hon-
orary types of recognition. The kinds of award made should take into
account the diverse responses of people The important thing is recognition,
of course. But recognition should be appropriate both in terms of the
persons who receive it and the accomplishment for which it is given. It is
apparent that no single type of award-monetary, honorary, or length of
service-will suit all situations or be proper for all persons. In general,
recognition should be such as to induce appreciation by the recipient and to
stimulate others to emulate the achievements. Whatever the recognition
may be-whether the casual "pat on the back," letter of appreciation or
commendation, granting of special privileges, cash award, or honorary
awards-they should be considered appropriate by the employee and his
associates. Maximum incentive values depend on the fitness in time and
place and on the extent of the recognition accorded.
Interest of Top Management
It cannot be assumed that management always takes a keen interest in
formal incentives programs. There are many situations where leadership
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needs to be sold on the values such programs can have. Some adminis-
trators honestly question the whole idea of consultative management.
Cautious and conservative, they look upon the responsibility for effective
management of their organizations as unshared and indivisible. Paid to be
leaders, they feel the ideas necessary to efficient administration must
originate with themselves. Other administrators who are justifiably proud
of well-oiled, productive, and efficient organizations may see no need for
stimulating suggestions for change. Even progressive leaders who take the
view that "no one of us is as smart as all of us" may not be convinced that a
formal incentive program is a good way to induce desired employee par-
ticipation in management.
Whatever may be the temper and tone of management, no incentive
program can be completely successful without its whole-hearted and posi-
tive backing. Unless the top level of management sincerely favors the team
concept and looks upon all employees as partners in the fellowship of work-
able ideas and methods; unless top leadership honestly wants to get em-
ployees to think of themselves as members of the team with responsibility
not only for producing effectively on assigned tasks but for passing on their
ideas and methods for improvement, any formal incentive program will be
artificial in motivation, half-hearted in execution, and of dubious success.
To enlist full support from top leadership, an incentive program should
be presented as one tool of management which has proved to be an asset in
Government and private industry. Leadership by its nature is, or should
be, concerned with encouraging employees to do their best. Formal in-
centive programs are one such means which management has used in vary-
ing forms for almost three quarters of a century. They should not be
thought of or presented as ends in themselves. Nor should they be sold as
a cure-all for all management problems. However, two factors basic to
all incentives, that is, positive solicitation of plans and proposals for improve-
ment and definite recognition of those who respond to the solicitation,
should make sense to the leaders who are continuously alert for better ways
of getting the job done.
There are many forms which the required high level interest may take.
Among them is participation in public ceremonies honoring those who have
met the organization's standards for achieving an award. Generous use
of letters, articles, posters, and other promotional media bearing the
photograph and signature of the agency head will give continued evidence
of top support. Personal interest in the individuals whose exceptional
achievement comes to his attention will go far in keeping the program
producing.
In addition, management will find that incentive programs work or fail
to the degree that they are accorded the same treatment as other manage-
ment objectives. If management gives lip service to an incentive program
but never gets around to providing adequate budget, personnel, or space
for implementing the program, it has scant chance of success. If manage-
ment, on the other hand, treats the program with the same attention,
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interest, and dispatch accorded other programs, it will have the means and
stimulus necessary to get the job done.
Supervisory Participation
While the broad framework of the awards program in Government is set
by legislation, within the established limits there is room for wide varieties
of adaptation. This is fortunate, because each immediate and second line
supervisor must playa key part in any incentive program. Top and middle
management depend ultimately on these levels of supervision to get the job
done. The first line of management is charged with the responsibility of
developing employees who can and do perform effectively and to stimulate
them to participate fully in plans for increasing efficiency and economy of
operations.
Hence, in considering which employees should be recognized, the reasons
for the recognition accorded, and the type and extent of the recognition
which is appropriate, the views of the immediate supervisor are indispen-
sable. His full participation will strengthen his position as the key to
effective personnel management, since he is held responsible for the success
of other employee-management relationships. He is in a good position to
appraise what is suitable recognition in individual cases and the impact
such recognition will have on the morale and productivity of his unit.
In addition, such participation serves as continuous training of super-
visors in management principles, giving evidence that unusual contribu-
tions by subordinates are a tribute to supervisors and reflect credit on their
leadership. This means that a supervisor who does draw out ideas from
his staff should be given credit explicitly for that achievement. The story
is told of the division chief who called attention to some good procedural
changes suggested by his subordinates and got this response from his
bureau head: "How come you hadn't thought of that?" Suggestions and
awards among his staff were not stimulated by that division chief again.,
Employee Participation in Management-Its Own Reward
Tangible and monetary awards available in an incentive program should
not be stressed to the degree that they are sought for their own sake.
Recognition of one-time unusual accomplishment is important. But the
principal goal should be to develop employees whose interest in the organi-
zation is such that they regularly and voluntarily submit their ideas for
improvement and invest their best in day-to-day tasks.
Special forms of recognition should be publicized and accepted as just
that-an additional honor. The best employee is one who looks upon his
achievement as its own reward. If the agency program of career develop-
ment adequately provides outlets for creative ability on the part of the
employee, the incentive program can be an asset in encouraging individual
initiative and promoting team spirit by tangible recognition of the types of
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contributions the organization is seeking from all its work force. Maintain-
ing the incentive program as a means to this end instead of an end in itself
will enable the agency to provide recognition to all employees who merit it.
When Cash Awards Are Appropriate
Normally, cash awards as incentive media are appropriate when tangible
savings to the Federal Government have been the result of the contributions
of an individual or a group. Other contributions to overall employee
morale, safety, or welfare may also be appropriately recognized by a mone-
tary award. However, cash itself need not be the sole or chief award in
any case. An act of heroism resulting in the saving of a life or the discovery
or development of significant scientific ideas or devices which have far-
reaching value to the Government and the public probably cannot ade-
quately be recognized by monetary awards. A very high honorary award,
with or without a supplementary cash award, would appear to be in order
in such cases.
Utility of Group Awards
Special attention should be given to the recognition of groups which make
unusual contributions to efficiency and economy of operations. Individual
achievement in which one employee "stars" and receives personal recog-
nition may have more immediate popular appeal. However, for the long-
run accomplishment of the agency mission, the recognition of significantly
productive groups will encourage the "team spirit" essential to effective
organization. Top and middle management should be on the alert for
organizational units whose output is consistently above average and whose
team contributions exceed normal expectations, the recognition of which
would provide stimulus to other units of the agency. To be of maximum
value, group recognition should take the following factors into account:
i. The group recognized should be clearly identifiable as a homogeneous
unit the contributions of which can readily be observed to exceed that of
similar groups.
2. All members of the group recognized should have shared significantly
in the group achievement. Where appropriate, the nature and extent of
the award to any individual in the group may be made commensurate
with his contribution to the achievement.
3. The accomplishment for which the group receives an award should be
sufficiently outstanding that its recognition will commend itself to other
groups as being well deserved and will serve to stimulate those groups to
improve their own productivity.
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Pitfalls to Avoid
1. Jeopardizing teamwork
No award system should be used in such a fashion that it works against a
cooperative spirit among employees. In its most extreme form emphasis on
individual achievement and recognition might result in employees' refrain-
ing from teamwork with their fellows for fear of giving away an idea for
which they have hopes of getting individual credit.
In many cases such tendencies can be averted through group awards or
through forms of recognition that do not stress the individuality of achieve-
ment at the expense of group teamwork. Individual competition is not
the sole incentive. Incentive comes as much from the sense of achievement
itself. Competition among independent groups may, however, provide
good stimulus to productivity.
2. Forgetting Nonmonetary Incentives
It is a mistake to think of awards and recognition only in terms of money.
Honor awards and the energizing effect of supervisory approval are often
more important than cash in certain situations and with certain types of
employees. As indicated earlier, systems for special recognition will be
successful only as they are adapted to specific needs.
3. Overlooking the Supervisor
As previously stated, it is easy to underestimate the supervisor's role in
motivating workers. Awards cannot take the place of the supervisor's ex-
pressed satisfaction with a job well done. Without the latter, an award
becomes artificial. With supervisory approval, a special award may not
even be necessary, except as it reinforces and gives evidence of reality to
supervisory judgment.
4. Overlooking Sustained Achievement
Some employers have placed such heavy emphasis on ideas and sugges-
tions that continuous high-level performance by workers may go unno-
ticed. More stress on sustained performance of high quality is needed
whether awards are invoked or not. Continuously outstanding work by
an employee or by a unit contributes most to efficient administration.
Even as an example to others it may be a more enduring force than a
single spectacular achievement.
At this point it may be said that too many administrators have assumed
that recognition and awards were not for specialists whose job it is to de-
velop new operating procedures or systems. This is a common reaction to
incentive awards for "organization and methods examiners" or "systems
accountants." But incumbents of such jobs are human too, and they vary
in ability and achievement. Here the concept of sustained high quality
performance is of special value. They should probably not get cash for
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specific ideas that they are paid to contrive, but there is no reason why
such specialists who consistently excel should not receive recognition just
like anyone else.
5. Overlooking Other Motivating Factors
Men do not live by awards alone. The authors of this pamphlet have
perhaps leaned over backward to make this clear. Good supervision and
opportunity for participation in decision-making are probably more vital
than awards in maintaining the will to work.
Most important of all is the work itself-the pride that comes from identi-
fication with a worthwhile cause, a good product, a task well done. An
award system or liberal use of awards cannot take the place of efforts to
develop satisfaction in the work being performed for its own sake.
Awards are tools available to management when they will be useful.
They are not the only or even the primary means for motivating workers.
6. Oversimplification of the Will to Work
Related to some of the above topics and already pointed up in the early
sections of this pamphlet is the whole question of complexity of the will to
work. What makes people want to work and work well is governed by
personal circumstances, education, mental health, and a variety of other
factors over which the employer may have little or no control. As we have
already seen, even where the employer does have some control, many con-
ditions and practices affect worker motivation besides awards.
Therefore, the supervisor must guard against the assumption that an
award that suits one situation will suit all situations or that an award that
fits one employee will fit all employees. Not only do people differ, but time
and place affect the utility of a recognition step. A small cash award may
be a great incentive to a charwoman, but even a large one may be in-
sufficient for a scientist who values professional acclaim higher. Also, there
are peaks and valleys in an employee's will to work.
It is for such reasons that executives are cautioned against standardization
of awards to the extent that there is little or no flexibility in tailoring them
to meet individual cases.
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III
Incentives Available in the
Federal Service
Many of the financial incentives available in industry are not available in
Government. Probably the most effective of those that are available is
promotion. The individual knows that promotion is generally based on
good performance and demonstration of ability to perform more responsible
work.
Public Law 763 of the 83d Congress, provides, in addition, for cash awards
or honorary recognition or both to nearly all Federal employees for signi-
ficant contributions resulting in benefits to the Government. Such con-
tributions may be in the form of ideas, suggestions, or inventions which save
money or improve service; or they may consist of outstanding performance
of assigned duties or of other personal acts meriting recognition of this kind.
The cash or honorary awards authorized by Congress may be made by the
employing department or by other departments which benefit from the
employee contribution.
Over and above departmental awards, the President is authorized in
exceptionally meritorious cases to grant recognition in the form of cash or
honorary awards in addition to those already made at the departmental
level.
One form of financial reward that the Federal service lacks generally
(although it has been developed in a few isolated cases) is incentive pay
based directly and automatically on the volume of production. This is a
type of financial incentive which is fairly common in piecework industrial
production. In the few instances that it has been tried in Government, it
has been under the authority to establish rates of pay on the basis of pre-
vailing rates in the geographical areas in which the persons are employed.
Employees whose pay rates are established on this basis are not covered
by the Classification Act.
The financial and nonfinancial incentives outlined above are tools for
the supervisor in motivating his subordinates toward outstanding perform-
ance. As stated earlier, he must employ them in the manner most likely
to encourage that outstanding performance by his particular work group.
If he is inept in human relations, the full sweep of formal incentives will
not make up for it.
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In an organization as large as the United States Government, there fnust,
nevertheless, be a basic system of standards for various types of financial
rewards and honorary recognitions and a standard method of soliciting
the ideas of all employees for more efficient and more economical conduct
of the work to be done. Occasionally supervisors object to the time required
for careful review and evaluation of employees' suggestions or awards pro-
posals. If it is part of the job of a supervisor to solicit and consider the
ideas of all subordinates and to give proper recognition to outstanding per-
formance, these objections are not valid. A supervisor's time would be or
should be devoted to these activities whether or not a formal suggestion
system or awards program exists. An incentive awards program, including
an employee suggestion system, assures performance of these vital super-
visory functions and gives management an opportunity to evaluate how
well they are being done.
Despite the handicap of the overlapping and inadequate legislation then
in effect, encouraging results were obtained during fiscal year 1953. In
this period estimated first-year savings of more than $57,000,000 were
effected.
It is estimated that these dollar savings are actually multiplied at least
several times, because first-year savings are repeated in succeeding years.
Furthermore, the good results of a great many employee contributions are
found in improved service rather than in money savings.
The new incentive awards legislation should make possible an even more
impressive record than the above results show.
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