The slumping economy has had Federal Express Corp., Memphis, Tenn., doing some soul-searching. Layoffs seemed inevitable, but how could the company justify layoffs when its publicly stated values put people first?

The answer, of course, was that it couldn't. Company founder Fred Smith announced that FedEx would adhere to a no-layoff policy and make budget cuts elsewhere to keep the commitment. As part of those budget cuts, all the incentive dollars that were tied to the company's recognition programs were frozen, including the use of money for employee awards.

But the show went on when it came to recognition.

Take, for example, the company's most visible recognition program, Bravo Zulu. (The name comes from military terminology meaning “well done.”) Any employee who makes an outstanding effort or reaches a great accomplishment is eligible to receive Bravo Zulus, or “BZs.” Until now, winners received cash bonuses (under $100), theater tickets, or gift certificates.

What has been interesting is that the BZs are just as powerful without the awards. Instead, FedEx managers present a well-written, personalized Bravo Zulu letter to the employee in front of that person's work group, and managers have found that it's often as meaningful as a monetary reward.

Even when financial incentives are cut, the need for and focus on recognition can remain strong. Here's what you can do:

  1. Don't toss the baby out with the bath water. That is, don't stop using recognition programs just because a financial element is no longer possible. Recognition is even more important when money is tight. You can always add back a financial element later.
  2. Return to the basics. Sincere, direct, and timely thanks never go out of fashion. Don't lose the opportunity to acknowledge someone just because a financial incentive is no longer attached to it.
  3. Be creative. At FedEx, groups alternate on who gets to choose radio music for the day, one manager gives chocolate bars for well-loaded units, and another manager even sings to employees as they are sorting packages.

Bob Nelson, PhD, is president of Nelson Motivation Inc., San Diego, and best-selling author of Please Don't Just Do What I Tell You! Do What Needs to Be Done, 1001 Ways to Reward Employees, and Managing For Dummies. For more information, call (800) 575-5521, visit, or send an e-mail to