WHAT HAS HAPPENED to recognition programs? Once a source of great pride and prestige, most companies' efforts are perceived as stale and irrelevant by employees. Why? And what can companies do to reengineer their programs?

Start with the gifts themselves. When they're not considered a joke, they're sometimes an outright insult. In a focus group I recently held, employees were adamant about what they don't want — and it's everything that most companies give them: pens, watches, clocks, paperweights, T-shirts, mugs, trophies, and plaques, as well as anything with a logo.

Even cash substitutes (such as gift certificates or discount coupons), nominal merchandise or food gifts, and public perks (such as parking spots) have diminished in importance. These all rank at the bottom of employee preferences in research I've conducted. As one focus group participant commented: “Employees no longer hang up their certificates.”

Survivor Awards Don't Motivate

In addition to gifts and awards being relics, many companies' recognition programs are just plain outdated. Take the years of service award. Back in the days when employees considered their jobs to be for life, marking milestones toward retirement made sense. But today, few employees expect to be with their companies for 20 or 30 years. Nevertheless, a majority of companies offer service awards.

Just because such recognition programs exist doesn't mean that they work, or even that they're being used. In one Fortune 500 organization for which I consulted, more than half of all employees didn't view service awards as a form of recognition at all. One long-term employee told me she had to go to the personnel manager on her own to demand her 20-year pin!

The problem is that these programs reward presence over performance. In addition, service and even retirement awards have become associated more with endurance than performance. They've become a badge of honor that “I survived” — all the more if the company has experienced a merger or layoff in recent years.

Employee of the Month: Wrong Message

The basic premise of the employee-of-the-month award works against a company. To select one person from many, even thousands, of employees often makes the majority feel unappreciated at the expense of the individual who is honored.

As a result, the winner may feel guilty or even embarrassed. Add to this the unwritten rule that you can't be selected more than once for the honor, and suddenly you have management scrambling to find someone who hasn't yet received the award. The selection criteria become skewed, and soon the focus is just on finding someone — anyone — to give the award to.

Once again, this type of reward has more to do with employees' endurance than with performance. It sends the message to employees that if they just hang in there, they will eventually be recognized.

We don't need employees of the month as much as we need employees of the moment — and we need them every day.

It's Not Showing Up That Matters

With the onset of flextime, tele-commuting, and virtual work teams, work is increasingly what we do more than where we do it. Cell phones, e-mail, pagers, Palm Pilots, and faxes connect us during designated working hours, which are increasingly more flexible than 9 to 5.

It's not showing up that matters, yet this is exactly what attendance incentives reward. Smart companies realize that there's a big difference between getting employees to come to work and getting them to do their best work.

What Went Wrong?

Recognition programs have neglected changes in employee attitudes and preferences for several reasons. For one, companies tend to look backward to “what we've always done,” out of habit more than anything else. They'll make a change or improve things only when there is overwhelming evidence that what they're doing is not working.

The $27 billion-plus incentive industry hasn't helped. Many of these companies are focused on continuing to move and customize merchandise, awards, and plaques, just as they've always done. Their focus is not necessarily on motivating employees or enhancing performance.

Another reason for the disconnect is that many companies simply do not value what matters most to their employees. More than rewards, people today want flexibility in their working hours as well as a balance between their work and personal lives. Recognition practices have not kept up with this shift in employee needs and expectations.

Make It Meaningful

There's no question that employees' faith in institutions has drastically declined. Today's employees view themselves more as working for people than for organizations.

The good news is that the people they work for have the ability to make recognition meaningful and special. In a recent study I conducted, 78 percent of employees indicated that it was “very” or “extremely” important to them to be recognized by their managers when they do good work, and 73 percent stated that they expect recognition to occur either “immediately” or “soon thereafter.”

So what is the most effective way to recognize employees? Ironically, it's the simplest forms of sincere thanks that mean the most. Of the top 10 forms of recognition employees consider most effective, four are types of praise: personal, written, electronic, and public. Employees also value being asked to decide how best to do their work, being allowed to pursue ideas they might have for improving things, and being given a choice of work assignments. Flexible working hours and learning and development opportunities are also great motivators.

What do these things have in common as rewards? They are all intangible, interpersonal, and highly situational. These actions say, “I'm here as a person, not just a manager, when you need me the most.”

This shift toward less formal recognition makes sense because that is what employees today say they value the most: more personal, “here and now,” sincere thanks.

This doesn't mean that you have to do away with formal recognition altogether. One suggestion is to ask employees via a survey or focus groups what they value from a list that includes current programs and practices as well as potential new ones.

Once you have a motivation baseline of your employees' preferences, systematically move away from those things that they no longer value and move toward those about which they seem more excited.

And remember: It is your daily efforts to recognize and thank your employees that matter the most.

Bob Nelson, PhD, is president of Nelson Motivation Inc., San Diego; a popular presenter to management groups, conferences, and associations; and a best-selling author of 1001 Ways to Reward Employees, 1001 Ways to Energize Employees, Managing For Dummies, and his latest, The 1001 Rewards & Recognition Fieldbook: The Complete Guide. For more information, visit www.nelson-motivation.com, call (800) 575-5521, or e-mail Bob at BobRewards@aol.com. To receive a complimentary copy of Bob's Recognition Practices Inventory, e-mail the publisher at rwc@hrdpress.com.