The Importance of Employee Recognition: Low Cost, High Impact
The following contribution is from Gallup, a leading global survey firm in both politics and business.
Highlights
Top performers need to know their efforts are recognized and valued.
Employee recognition isn’t universal.
Money isn’t the only form of recognition, nor even the primary one.
In the current war for talent, organizations and leaders are looking for strategies to attract and retain their top performers, while increasing organic growth and employee productivity.
From offering new benefits to designing flexible workplaces, companies’ efforts to optimize the work environment are stronger than ever.
However, in their search for new ideas and approaches, organizations may be overlooking one of the easiest strategies to execute: employee recognition.
According to a Gallup analysis, only one in three workers in the U.S.
strongly agree that they have received recognition or praise for good work in the past seven days.
In any company, it’s not uncommon for employees to feel their best efforts are consistently ignored.
Furthermore, employees who don’t feel adequately recognized are twice as likely to quit in the next year.
This element of engagement and performance could be one of the biggest missed opportunities for leaders and managers.
Workplace recognition motivates, provides a sense of accomplishment, and makes employees feel valued for their work.
Recognition not only boosts individual employee engagement but has also been shown to increase productivity and company loyalty, resulting in higher retention.
In addition to communicating appreciation and motivating the recognized employee, the act of recognition also sends messages to other employees about what success means.
In this way, recognition is both a personal reward tool and an opportunity to reinforce the organization’s desired culture to other employees.
Individual Recognition
Gallup data reveals that the most effective recognition is honest, authentic, and personalized, based on how each employee wishes to be recognized.
Recognizing employees’ best work can be a cost-effective initiative; it can be something as simple as a personal note or a thank-you card.
But the key is knowing what makes it meaningful and memorable for the employee, and who does it. Keep these recognition ideas in mind the next time you praise a colleague.
In a recent Gallup survey on the workplace, employees were asked to recall who gave them the most meaningful and memorable recognition. The data revealed that the most memorable recognition most often comes from the employee’s manager (28%), followed by a senior leader or CEO (24%), the manager’s manager (12%), a customer (10%), and peers (9%). Notably, 17% cited «other» as the source of their most memorable recognition.
What’s most surprising about these findings?
Nearly a quarter said the most memorable recognition comes from a senior leader or CEO.
Employees will remember personal comments from the CEO; even a small gesture of appreciation from a senior manager can make a positive impression on an employee.
In fact, recognition from a CEO could become a career achievement.
When asked which types of recognition were most memorable, respondents highlighted six methods in particular, and money isn’t the only (or even the primary) form of recognition:
– Public recognition or recognition through an award, certificate, or commendation
– Private recognition from a boss, peer, or client
– Receiving or achieving a high level of achievement through evaluations or reviews
– Promotion or increase in scope of work or responsibility to demonstrate trust
– Monetary reward such as a trip, award, or pay raise
Personal satisfaction or job pride
It’s critical for leaders and managers to keep these examples of employee recognition in mind when recognizing the successes or achievements of their team members. Recognition from All Angles
The best managers foster an environment conducive to recognition, with praise coming from all walks of life and everyone being aware of how others like to receive recognition.
This type of feedback to employees should be frequent (Gallup recommends every seven days) and timely to ensure the employee understands the significance of the recent achievement and reinforces company values.
Recognition criteria should be aligned with the company’s purpose, brand, and culture, and reflect its aspirational identity to inspire others.
Rewarding employees who don’t perform well could negatively impact the motivation of high-performing employees. Therefore, companies need to set specific standards for awards to avoid any backlash.
Good managers know that there is never too much recognition, as long as it is honest and deserved.
Recognizing an employee’s best work goes a long way toward making them feel valued and can lead to other desirable workplace outcomes.
Do your metrics anger employees? Or do they motivate them?
This contribution also corresponds to the Gallup website.
By Mike McDonald
Jessica Buono contributed to this article.
Fear. Anxiety. Stress. Anger. Not exactly the emotions we hope to provoke in our employees, are they?
In any case, it’s not exactly the key to motivational management.
Unfortunately, those are the emotions many people feel when it comes time to talk about their work metrics. Employees dread the idea of their manager reducing them to a simple number. A number that may be accurate and important, but that doesn’t accurately reflect everything they contribute to their work.
And no matter how subtly everything is presented, people become defensive and discouraged.
Why?
«The mere act of measuring communicates distrust, power, control, and dehumanization.» That’s what a fellow student said when the topic of performance measurement came up in my PhD class.
He was right. And he was also wrong.
He was right because measurement can be dehumanizing. Managers, intentionally or not, end up using measurement negatively to try to motivate people. But it doesn’t work.
Instead, it creates fear, stress, anxiety, and anger; it makes them feel like they’re never good enough.
He was wrong because measurement itself doesn’t require those effects. And employees want measurement.
Measurement is a positive pillar for developing employees, holding them accountable and providing appropriate and specific recognition—three performance goals employees say they need from their manager and the organization, according to Gallup’s «Re-Engineering Performance Management» report.
Measurement is also key to helping your employees become stars; the key to helping you create them. Think of any famous, award-winning movie star or athlete: how did they earn those titles?
Someone measured their performance. Then he recognized them for it. And he repeated it.
According to a Gallup study, employees who strongly agree that their manager holds them accountable for their performance are 2.5 times more likely to be engaged at work. And employees who feel adequately recognized are half as likely to announce their resignation in the next year than those who don’t.
A well-used measure motivates.
An incorrect measure shifts employees’ mindset away from improving their performance and toward whether you, their manager, are trustworthy and qualified to assess their performance.
I know it’s tempting to think that the typical management mistakes that generate employee anxiety aren’t made; that the measures should be accurate if the intentions are good and the recognition is given often enough. But there are two clear signs that this isn’t the case:
- Only three in 10 employees in the U.S. strongly agree that in the past seven days they have received recognition or praise for good work.
- Only one in five employees strongly agree that their performance is managed in a way that motivates them to do exceptional work.
If you measure to motivate, not to control, you should have no problem providing meaningful and targeted recognition regularly.
There’s no other option. We need to measure performance. But we need fair measurements that truly reflect the person, not just the outcome.
We need ways to use measurement to motivate positively, not cause heart attacks.
So how do you know if your measurements motivate your employees or make them angry? Here are six questions to ask yourself:
- Are you measuring everything? We hope not. Today’s technology, the emphasis on lean management, and other systematic approaches to performance make it possible to generate metrics for all kinds of measurements. But don’t fall into the trap of assuming that just because you can measure something means you should.
- Can your employees directly influence the work you’re measuring? If employees can’t connect performance metrics to concrete actions they can take to improve, then discard them. Employees won’t accept a metric as fair if they don’t believe they can influence it. Allowing employees to participate in goal setting is a great way to give them some control and accountability over their results.
- Does what you measure focus on each individual’s greatest skills and contributions? You can generate strong buy-in with a measurement if it aligns with your employees’ strengths. Consider each team member’s unique abilities, responsibilities, knowledge, experience, and aspirations—there’s no one-size-fits-all solution, right?
- Do your metrics conversations focus on the future and growth? Managers need to realize that employees can’t change the past, so focusing on past experiences isn’t productive without discussing a clear path forward. A «look back to excel in the future» mentality is important because it allows for both constructive criticism and encouragement.
- Are metrics frequently mentioned in your conversations? Performance metrics tend to feel unfair because they’re usually only discussed once a year. A lot can change over the course of a year, even in a few months: new tasks or projects arise, or a person’s family life may require more attention during a season.
Addressing metrics more frequently reduces fear, allows managers to focus on recent achievements, and introduces necessary performance corrections before problems become unmanageable.
- Do your measurements tell a story? Do the numbers you collect have an accompanying narrative? Two people may achieve the same results based on key performance metrics, but they may have different contexts, have a different impact on their colleagues, or provide different value to internal or external customers.
The conversation about measurements and your employees’ goals is as important, if not more important, than the actual numbers. So, stop focusing on improving the numbers and focus on the meaning of that improvement.
Motivate your team to achieve great things through measurement.
Reflecting on the six questions above will allow you to significantly influence your team’s emotional experience with measurements.
This doesn’t mean you’ll find a way for everyone to be on top of their game and excel in their role; some might not be.
But if you consider the whole person, regardless of whether the metrics are excellent or not, both will feel satisfied with the outcome. And perhaps they’ll be on the path to finding another position where a person who previously wasn’t able to excel can excel.
Properly used metrics can reduce your employees’ negative emotions.
But most importantly, they can help you create a team of all-stars: people motivated to achieve great things, not just driven to improve a little.
The Power of Recognition: Why Managers Should Celebrate Their Teams
The following contribution is from the G.Q.SHORT portal, which defines itself as: We help you create, customize, develop, and deliver recognition programs and moments for your people.
Written by: C.A. Short Company
For over 80 years, C.A. Short Company has been an industry leader in employee engagement and recognition. Through our People Are Everything™ recognition platform and engagement solutions, we help organizations inspire, reward, and retain their most valuable asset: their people.
Amid the whirlwind of deadlines, meetings, and quarterly goals, one of a manager’s most powerful tools is often overlooked: recognition.
While it may seem like a «nice-to-have» in the grand scheme of things, employee recognition is actually a critical factor in performance, retention, and job satisfaction.
The Recognition Gap in Today’s Workplace
Despite its importance, recognition remains shockingly lacking in many organizations.
Studies consistently show that most employees feel undervalued at work, with many reporting they haven’t received meaningful recognition in months or even years.
This creates a recognition gap that directly impacts everything from productivity to employee turnover.
The problem isn’t that managers don’t care about their teams, but rather that recognition is often hindered by competing priorities and busy schedules.
But this oversight comes at a significant cost to both individual employees and the organization’s success.
The Dual Power of Monetary and Non-Monetary Recognition
Recognition comes in a variety of forms, but generally falls into two categories: monetary and non-monetary.
Understanding the unique benefits of each and how they work together is essential to creating a comprehensive recognition strategy that truly motivates and retains talent.
The Strategic Advantage of Points-Based Monetary Recognition
Points-based recognition systems represent a modern evolution of monetary rewards, combining the tangible value of financial recognition with the flexibility and appeal of gamification.
In these systems, employees earn points for various achievements, behaviors, and contributions, which they can then redeem for rewards ranging from gift cards and products to experiences and time off.
Granular Recognition Opportunities: Unlike traditional bonuses, which typically reward large achievements, point systems allow managers to recognize small, daily contributions. An employee can earn points for helping a colleague, suggesting a process improvement, or consistently meeting deadlines. This granularity makes recognition more frequent and accessible.
Employee Choice and Autonomy: Point systems allow employees to control how they receive their rewards. One team member may save points for a large gift card, while another prefers to redeem smaller rewards more frequently. This option increases the perceived value of recognition, as employees select the rewards that truly matter to them.
Transparent Value System: Points create a clear, quantifiable value for different types of contributions. Employees can see exactly how their efforts translate into rewards, creating a transparency that traditional recognition often lacks. This visibility helps employees understand the organization’s priorities and adjust their efforts accordingly.
Cumulative Impact: Points accumulate over time, allowing employees to work toward greater rewards while also receiving immediate recognition. This builds short-term motivation and long-term engagement, as employees can see how their efforts translate into meaningful rewards.
Budget Predictability: For organizations, point systems provide better budget control than traditional bonuses. Companies can establish point values and reward catalogs that fit their recognition budgets, avoiding the unforeseen costs that ad hoc monetary rewards can incur.
Data-Driven Insights: Point systems generate valuable data on recognition patterns, popular rewards, and employee preferences. This information helps organizations refine their recognition strategies and understand what motivates their staff most effectively.
Scalability Across Teams: Point systems work equally well for individual contributors as they do for team achievements. Managers can award points for team projects, departmental goals, or company-wide initiatives, allowing recognition to be scalable across different levels of the organization.
However, points-based systems require careful implementation. Point values must be meaningful, the rewards catalog must offer genuine value, and the system must be simple enough to use without being bureaucratic or time-consuming.
The Profound Benefits of Non-Monetary Recognition
Non-monetary recognition ranges from verbal praise and written thank-you notes to work flexibility, development opportunities, and public recognition. While it doesn’t have an immediate financial impact, its benefits are surprisingly profound:
Lasting Emotional Impact: A sincere thank you or public recognition often stays with employees far longer than a bonus. These gestures address fundamental human needs for appreciation and belonging, creating lasting emotional connections.
Daily Motivation: Unlike monetary rewards, which are typically given quarterly or annually, non-monetary recognition can be given daily. This frequency creates sustained motivation and consistently reinforces positive behaviors.
Personal Connection: Non-monetary recognition allows for deep personalization. Understanding whether an employee values public praise, private recognition, or professional development opportunities demonstrates a genuine interest in them as a person.
Cultural Reinforcement: These forms of recognition actively build and reinforce company culture. When managers regularly recognize behaviors that align with organizational values, they strengthen the team’s cultural fabric.
Scalability and Accessibility: Non-monetary recognition doesn’t require budget approval or complex processes. Any manager can implement these strategies immediately, making recognition more frequent and accessible.
Intrinsic Motivation Boost: Research consistently shows that intrinsic motivators, such as feeling valued and having a purpose, are more powerful long-term drivers than extrinsic rewards alone.
Non-monetary recognition directly feeds these intrinsic needs.
Why Both Matter
The most effective recognition strategies combine monetary and non-monetary elements.
Monetary recognition validates the tangible value of an employee’s contributions, while non-monetary recognition addresses their emotional and psychological needs.
Together, they create a holistic recognition experience that speaks to the whole person.
For example, a year-end bonus accompanied by a personalized letter detailing specific contributions and their impact creates both a financial reward and an emotional connection.
Similarly, a promotion with a pay increase (monetary) combined with increased responsibilities and public recognition (non-monetary) simultaneously addresses multiple motivational factors.
Tailoring Recognition to Individual Preferences
Each employee responds to different types of recognition. Some are primarily motivated by financial rewards and career development, while others value flexibility, learning opportunities, or public recognition more.
The most effective managers understand their teams’ preferences and tailor their recognition approach accordingly.
This might mean giving one employee a gift card and offering another the opportunity to present their project to senior management.
Both forms of recognition have value, but their impact varies depending on individual preferences and motivational factors.
The Ripple Effect of Recognition
Recognition creates a multiplier effect throughout the organization. When one team receives recognition regularly, others take notice.
This can inspire managers across all departments to prioritize recognition, gradually transforming the company culture.
Additionally, employees who feel valued become ambassadors for the organization, speaking positively about their workplace with friends, family, and potential hires.
Making Recognition Meaningful
Not all recognition is created equal. For maximum impact, recognition should be:
Specific and Timely: Instead of generic praise, recognize specific achievements or behaviors as close as possible to the time they occurred.
Personalized: Consider what type of recognition each team member values most; some prefer public recognition, while others appreciate private conversations or written notes.
Authentic: Genuine recognition has much more impact than mandatory or superficial praise.
Values-aligned: Connect recognition to broader organizational goals and values to reinforce what matters most. Implement both types of recognition.
Implementing Points-Based Recognition Systems
Start with clear guidelines: Establish transparent criteria for earning points, ensuring employees understand exactly which behaviors and achievements are valued.
Create a points guide that outlines the different recognition categories and their corresponding values.
Design a meaningful rewards catalog: Offer a wide range of redemption options to suit different preferences and point levels. Include everything from small, everyday rewards (coffee gift cards, premium parking spaces) to more ambitious items (extra vacation days, electronic devices, experiences).
Make it easy for managers to use: Provide managers with simple tools to immediately award points when they observe good work. The system should be intuitive enough so that recognition becomes a natural part of daily management, not an administrative burden.
Regular Communication: Promote point earning and redemption through company communications to maintain visibility and encourage participation. Celebrate both individual achievements and the overall success of the program.
Gather Feedback and Repeat: Periodically survey employees about the effectiveness of the point system and their reward preferences. Use this feedback to refine point values, add new reward options, and improve the overall experience.
Non-Monetary Recognition Ideas
Start team meetings by highlighting recent accomplishments and their impact.
Send personalized thank-you emails detailing specific contributions and their significance.
Recognize achievements in company communications, newsletters, or town hall meetings.
Offer opportunities for skill development, conference attendance, or reinforcement assignments as investment-based recognition.
Offer flexible work schedules or preferential project assignments as rewards for consistent performance.
Simply saying «thank you» more often, with genuine appreciation, can make a substantial difference.
Creating Balance
The key is finding the right balance for your team and your organization.
Not all achievements require monetary recognition, but significant contributions should be rewarded financially whenever possible.
Similarly, don’t reserve all recognition for formal review periods: regular non-monetary recognition keeps motivation high throughout the year.
The Manager’s Role in Creating a Culture of Recognition
As a manager, you define your team’s experience. Your approach to recognition reflects what is valued and expected.
By consistently recognizing good work, you not only make people feel appreciated, but you also set standards and create an environment where excellence is recognized and celebrated.
This doesn’t mean recognizing everything indiscriminately, as this can dilute the impact.
Instead, focus on significant contributions, improvements, and efforts that align with team and organizational goals.
In short,
Recognition is not a luxury or an afterthought, but a business imperative.
Managers who understand this and consistently act on it will find themselves leading more engaged, productive, and loyal teams.
In an increasingly competitive talent market, the ability to make employees feel valued and appreciated is not only good management, but also good business.
The question isn’t whether you can afford to prioritize recognition, but whether you can afford not to. Your team’s performance, satisfaction, and retention may depend on the answer.
The Role of Executive Communication in Driving Effective Employee Recognition
The following contribution is from the Vantage Circle portal, which defines itself as follows: We help organizations around the world deliver a satisfying employee experience and foster meaningful connections between colleagues through innovative recognition and well-being solutions.
Nilotpal Saharia
This article was written by Nilotpal M. Saharia, content specialist and HR journalist at Vantage Circle. With an MBA and an extensive career spanning over seven years, she has cultivated experience in diverse fields, including marketing, content creation, entrepreneurship, and human resources.
In addition to being a regular contributor to Vantage Circle, Nilotpal’s article also appeared in Select Software Reviews.
Global Employee Recognition and Well-Being Platform
Bridging the Gap: How Executive Communication Drives Recognition
How leaders can leverage executive communication to drive recognition and engagement
Conclusion: Executive Communication as a Pillar of Effective Recognition
With expert input:
Saurabh Deshpande – People Culture Expert
When was the last time you stopped to think about how your words as a leader impact your team’s motivation?
It’s easy to assume that employees are engaged simply because they show up to work, but the reality is much more complex.
A recent Gallup study reveals that only 36% of employees are engaged in their workplace. But why?
The answer lies in how we communicate recognition.
Engagement isn’t just about offering occasional praise, but about how we shape the culture of recognition through our words and actions.
As leaders, we have the privilege and responsibility to shape how employee recognition flows throughout the organization. It’s not enough to recognize good work; we must communicate why that work is important.
When executives actively recognize their teams, it goes beyond simple recognition. It sets the tone for the entire company, sending a clear message that every contribution is valued and that each team member plays a crucial role in the organization’s success.
In my experience, the most engaged teams are those where recognition isn’t left to chance. It’s an integral part of leadership communication, making it clear that employees’ contributions, large or small, are critical to the company’s overall goals. When recognition is communicated effectively, it becomes a catalyst for greater employee engagement, where people feel genuinely connected to their work and the organization’s mission.
Closing the Gap: How Executive Communication Drives Recognition
How Executive Communication Drives Recognition
- The Leadership Effect
As C-suite executives, your words and actions set the tone for the organization. The way you communicate recognition can increase or decrease its impact.
When leaders and executives use effective communication to celebrate excellent work, the value of those contributions is reinforced and creates a ripple effect throughout the organization.
This results in an engaged and productive workforce, where employees feel recognized, valued, and appreciated for their efforts. Leaders who actively recognize employees not only improve their morale but also influence their long-term job satisfaction and overall work experience.
- Trust and Credibility
Employees are more likely to trust and be motivated by recognition from senior management because they perceive these messages as more credible and impactful.
Leaders who take the time to recognize employees in ways that align with organizational goals are more likely to foster a culture of recognition that drives greater employee engagement. When recognition is transparent, authentic, and tied to concrete achievements, it builds trust throughout the organization.
Effective communication also helps leaders communicate why certain behaviors are being recognized.
For example, when a leader publicly praises a team for going above and beyond in customer service, they are not only acknowledging their excellent work but also reinforcing their alignment with the company’s mission. Employees are more motivated and engaged when they understand that their efforts contribute to the organization’s results.
- Symbolic Leadership
The way leadership communicates recognition is symbolic.
Recognition from executives is often considered a seal of approval, carrying more weight than praise from peers or managers.
According to a Gallup survey of workplace environments, employees were asked who gave them the most meaningful and memorable recognition. The results showed that the most memorable recognition typically comes from the employee’s direct manager (28%), followed by a senior leader or CEO (24%), and finally, the manager’s boss.
By recognizing employee efforts in real time and celebrating them through effective communication, leaders can set a powerful example that reinforces the organization’s values.
This creates a positive cycle.
Employee Recognition and Motivation Cycle
Employees recognized by their leaders are more likely to be motivated to contribute more and encourage their team members to do the same.
How Leaders Can Leverage Executive Communication to Drive Recognition and Engagement
- Drive Recognition Through Storytelling
One of the most powerful tools at a leader’s disposal is storytelling. When recognition is integrated into a narrative that highlights the challenges, creativity, and dedication behind an achievement, it takes on greater meaning.
Storytelling brings recognition to life by showing the human side of success, illustrating how individual contributions drive the organization forward.
Instead of simply saying «thank you,» executives can highlight how a team’s collaboration helped the company reach a milestone or how an individual’s innovation led to the launch of a new product.
Storytelling makes recognition feel more authentic and tangible.
It also encourages employees to reflect on their contributions and how they align with company goals, boosting employee morale and engagement.
When recognition is framed within a story, it resonates more deeply and provides context that helps others understand the significance of similar behaviors and contributions.
- Make recognition visible throughout the organization
Visibility is key. When recognition is communicated exclusively within a team or department, its impact is limited. For recognition to be meaningful, it must be visible throughout the organization.
One of the best ways to achieve this is through digital platforms or company-wide meetings where executives can share and celebrate successes.
I saw this work firsthand at a company that implemented an internal social platform to recognize employee achievements.
Employees were encouraged to post about their colleagues’ accomplishments, whether it was reaching a milestone, innovating on a project, or providing exceptional customer service.
These posts were then shared company-wide, often accompanied by a note from an executive congratulating the employee or the team.
Recognition Platform
Source: Vantage Rewards
The more employees see their colleagues being recognized for their achievements, the more motivated they will be to do their best and strive for similar accomplishments.
Visibility turns recognition into a shared experience, reinforcing the idea that success is a collective effort.
- Model Consistent Recognition Practices
Recognition must be consistent. If employees only receive praise during special events or annual reviews, they may begin to feel that recognition is a one-off activity rather than a consistent part of the company culture.
Consistent recognition involves integrating it into daily communication. It should be something employees can expect, not just desire.
Therefore, leaders should strive to consistently integrate recognition into their regular communication. Whether during executive updates, performance reviews, or company-wide meetings, employees should consider recognition as an ongoing and integral part of the leadership approach.
Modeling consistent recognition practices shows employees that recognition is an ongoing part of the organizational culture.
- Extend Recognition to All Levels
There is a misconception that recognition should only be top-down. While executive communication is crucial, leaders must empower middle managers and team leaders to engage in recognition practices.
This can be achieved by providing resources such as:
Guidelines,
Templates, and
Real-Time Examples.
Ensuring that recognition extends throughout the organization creates alignment between the company’s leadership and middle management.
It reinforces the values communicated by senior management and helps create a cohesive and unified approach to employee recognition.
It also ensures that recognition is distributed equitably, making employees feel equally valued regardless of their role.
- Engage Through Personalized Communication
Finally, personalized communication adds a layer of authenticity that makes recognition truly powerful. Public recognition is important, but a personal message from an executive—whether a handwritten note, a phone call, or a personalized email—can have a lasting impact.
I’ve seen leaders take the time to write personal messages for their employees after a job well done, and the effect was remarkable.
One of them, after a successful product launch, sent a personal email to each team member involved, thanking them not only for their hard work but also for their creativity and adaptability.
The impact of these personalized messages was much deeper than a simple «thank you.» Employees felt valued as individuals, not just as part of a team, and this strengthened their emotional connection to the organization.
Personalized recognition not only makes employees feel appreciated; it also builds greater trust, reinforces loyalty, and fosters sustained commitment.
It demonstrates to employees that leadership sees them as more than just a cog, but as integral parts of the organization’s success.
In short: Executive communication as the backbone of effective recognition
The true measure of a leader’s influence is not only seen in the strategic decisions they make or the goals they set; it is reflected in their role in communicating with their teams and the recognition they provide.
When integrated into executive communication, recognition not only boosts morale, but also strengthens the organization’s leadership.
It boosts engagement, improves job satisfaction, and strengthens employees’ connection to the company’s mission.
Recognition should be timely, meaningful, and aligned with company values.
Leaders who prioritize consistent and transparent recognition create an environment where employees feel valued and motivated to contribute to the company’s success.
Finally, personalized and visible recognition fosters loyalty and teamwork and encourages employees to strive for excellence.
Leading with recognition will cultivate a culture where employees not only feel engaged, but also feel empowered to contribute to the organization’s progress.
The Crucial Role of Middle Managers and How Business Leaders Can Maintain Their Engagement
The following contribution is from the ENGAGE portal, which defines itself as follows: Founded in 2013, ENGAGE’s mission is to help organizations drive business performance through their people. We are a team of data scientists, researchers, organizational consultants, leadership coaches, and trusted advisors.
We are always looking for exceptional talent to join our growing team. Scroll down to see our current openings.
Middle managers are key players in your company.
They go the extra mile and contribute to completing assigned tasks, while energizing engagement and providing leadership and guidance to those they lead.
In recent years, companies have begun to recognize and understand the significant impact of middle managers, especially as important connectors: connecting employees to the company, the management team, the purpose, and the strategy.
Yet, despite growing recognition of their efforts, middle managers are burned out. They are required to fill many roles and often conflict over the various demands on their time, which can include non-managerial work, organizational processes, and internal communications.
Previous McKinsey research highlights this fact, highlighting the gap between leaders and middle managers
over where to invest their time and where their value lies.
At ENGAGE, we’ve delved into the enormous value of middle managers and outlined the steps to take to maintain the engagement of this important employee segment.
So, why are middle managers crucial to your company?
- They nurture your talent
Middle managers’ ability to build relationships with employees and support them in their roles and careers is vital to their engagement. When employees have a positive interpersonal relationship with their line manager and feel supported and listened to, job satisfaction increases, along with overall personal satisfaction.
- They make things happen
Middle managers are skilled at integrating tasks and organizing people and projects. Additionally, their closeness to the workforce allows them to identify development needs and ensure employees are trained and fully prepared to perform their roles.
- They create a positive culture
Middle managers play an important role in creating meaningful daily experiences, such as providing feedback, recognizing, and celebrating achievements.
They also often offer broader storytelling experiences to help employees connect with their work, each other, and broader business goals.
- They Connect People on Teams
As mentioned above, middle managers are skilled «connectors» and act as an important link between teams. They help employees connect with others in the company and align their skills and interests, while also driving development.
- They Improve Organizational Performance
By driving employee development and significantly contributing to overall engagement, middle managers play a critical role in improving business performance and increasing productivity.
Addressing Change of Heart Before It’s Too Late
Therefore, it’s clear that this group of employees needs to be nurtured and engaged to ensure their retention.
However, a recent ENGAGE study conducted with a global technology company revealed that middle managers are less likely to perceive their organizations as innovative (with results showing a 10% difference compared to non-managers).
They were also 7% less likely to perceive their organization as receptive to challenges.
Middle managers are often responsible for sharing the organizational narrative with their teams.
This is a highly trusted group, and if their perception of the company becomes increasingly negative, this view will quickly spread to the rest of the workforce, with disastrous consequences.
How can you connect with middle managers and understand their value?
By meeting the unique needs of this group, you can tap into their enormous potential and ensure they remain fully engaged with your company. As part of your engagement strategy with this employee segment, be sure to consider:
- Empowerment
Reduce the barriers middle managers face regarding meetings, bureaucracy, and process management, and allow them greater autonomy and decision-making power.
This will help ensure middle managers’ time is used effectively and will also improve their perception of their own value.
- Communication
Avoid putting middle managers in difficult situations with employees by asking them to convey poor or opaque communications. Share the rationale for your decision-making with middle managers to ensure they are sufficiently informed to communicate updates and answer questions about key decisions.
- Unlearn
Many middle managers are promoted based on their individual contributions, but it’s important to ensure they don’t try to fill their original role in addition to their new one. Give them the time and tools they need to focus on people development and avoid burnout.
It’s easy to take middle managers for granted and view them only as trusted individuals within the company. However, their importance is critical. Therefore, if it’s not already a priority in your company, taking care of your middle managers should become a key component of your employee engagement strategy.
For help and advice on creating customized engagement strategies for different employee segments in your company, contact the ENGAGE team.
Why Employers Need Integrated Recognition: Manager Rescue
The following contribution is from the Thanks portal.
About Thanks
Thanks is a leading provider of a recognition-based platform that improves communication, fosters teamwork, and integrates recognition into company culture. Quick, easy, and straightforward, Thanks makes it easy to implement data-driven employee recognition across your organization. O.C. Tanner acquired the Thanks platform in 2019 to meet the recognition needs of small businesses.
Thanks customers benefit from the same decades of research on employee motivation and company culture that O.C. Tanner’s enterprise customers enjoy a product designed for quick, simple, and easy implementation. Whether you’re starting a recognition program or enhancing and expanding your existing one, Thanks has everything you need to engage your workforce with effective and scalable recognition.
Why Employers Need Integrated Recognition: Saving Managers
Posted by Annemaria Duran
The positions most at risk of loss in the post-COVID era aren’t the most junior.
And while the Great Resignation is impacting entry-level job losses, it’s lower- and mid-level managers who are still dealing with increased job stress, enough to impact their happiness in other areas of their lives.
COVID-19 presented many challenges for employees. Overall, stress levels increased as employees struggled to learn how to work remotely.
However, that increased stress leveled off and decreased as employees adapted to remote work and increased their job autonomy.
However, lower- and mid-level managers did not experience the same decrease in their stress levels. Now, more than two years later, stress for lower- and mid-level managers remains high.
One of the main reasons for this is that middle and lower-level managers often have less input into corporate decisions and less support from senior management than they provide to their teams.
Sometimes, corporations forget that managers are employees and expect them to be the voice of the company.
This forces them to navigate the often conflicting desires of the company and the teams they manage.
Managers Are Stressed, Burned Out, and Many Are Demotivated
According to Gallup, the rate of burned-out and stressed managers is a particularly pressing issue right now. Gallup found that only 25% of managers strongly agree they can maintain a healthy balance between work and personal obligations.
Harvard Business Review describes the increasing difficulty managers face in keeping up with ever-changing and increasing responsibilities:
“The traditional role of the manager evolved in the hierarchical workplaces of the industrial age, but in our fluid, flatter, post-industrial era, that role is beginning to seem archaic.”
Gallup recommends that senior managers manage front-line managers by helping them develop professionally, holding coaching conversations, and improving their skills.
O.C. Tanner recommends that organizations recognize that managers are employees and treat them as such. While managers strive to increase engagement and reduce employee turnover, organizations must take the same steps to support them.
This is especially important since managers are at high risk of turnover.
Lower- and mid-level managers claim they don’t need recognition, but studies show otherwise.
According to the O.C. Tanner Culture Report, mid-level managers are 33% less likely to feel appreciated, and lower-level managers are 47% less likely to feel appreciated than senior managers. These statistics are concerning, as mid- and lower-level managers are often the leaders with the greatest impact on the rest of the workforce.
Mid- and lower-level managers often create the employee culture within their teams and significantly influence individual contributors within the company.
Although nearly a third of managers report not needing recognition, studies show that their job stress decreases dramatically when they receive it. Managers may feel a leadership responsibility to under-express their own recognition needs versus those of their team.
When managers’ work and contributions are recognized, their anxiety is reduced by 67%. Managers’ stress is reduced by 52% when they are recognized frequently.
Only 14% of organizations try to ease the burden on their managers.
Organizations are growing rapidly to retain and attract employees during the Great Turnover, but a Gartner study found that only 14% of organizations try to ease the burden on their managers.
This puts lower- and mid-level managers at high risk of attrition, as these leaders focus on retaining their team but don’t get the support they need from their organizations.
Lower- and mid-level managers claim they don’t need recognition, but studies show otherwise.
Lower-Level Managers Need Recognition from Those They Manage Most
Middle- and lower-level managers simply don’t receive enough recognition.
Within an organization, they often set the tone for employee recognition.
While recognition from senior managers is critical to the job satisfaction of lower- and middle-level managers, so is recognition from peers and superiors.
Managers need recognition from their peers and other leaders. But they also need recognition from the teams they lead.
Middle- and lower-level managers often experience a tug-of-war between what the organization wants and what their team wants, which conflicts up to 50% of the time.
They are often expected to act as buffers, minimizing the impact of company directives on their team and absorbing team frustration directed toward the organization.
The O.C. Tanner Research Institute found that managers desire recognition from those they lead.
Sixty-five percent of leaders who participated in the research stated that receiving praise from their own teams and those they lead would improve their work experience.
The problem is that most teams don’t consider regularly recognizing their manager.
Employees expect to be recognized by their managers or team leaders, but they don’t expect to have the responsibility of recognizing their superiors and other leaders.
Organizations with integrated recognition offer upward recognition more frequently.
When organizations integrate recognition as part of the company culture, managers are more likely to be recognized by their peers and subordinates.
Integrated recognition gives employees the opportunity to celebrate with formal recognition.
For organizations to have a fully integrated recognition culture, they must have senior management who actively recognizes it, a formal recognition program, and software that facilitates employee participation.
Recognition software also makes recognition easier for managers, automatically providing them with opportunities to celebrate formal events such as work anniversaries.
When managers work for organizations with integrated recognition, their anxiety decreases and their leadership increases.
Organizations with integrated recognition more frequently offer upward recognition.
Conclusion
From managing managers to treating them as the employees they are, managers need many of the same forms of recognition as other employees. They need to be acknowledged by their leaders, peers, and teams. They need opportunities to grow professionally, receive mentorship, and participate in decisions that affect them.
Managers need more recognition than just their salary and benefits.
Recognize the Power of Workplace Recognition
The following contribution is from the WorldatWork portal, which defines itself as follows: We serve those responsible for developing inspired, engaged, productive, and committed employees in effective and rewarding work environments. WorldatWork serves Total Reward, compensation, and benefits professionals working around the world, in organizations of all sizes and across all industries.
The author is Nu Yang
Editor-in-Chief, Workspan Daily
Nu Yang is the editor-in-chief of Workspan Daily. She previously served as editor of #evolve and editor-in-chief of Editor and Publisher magazine.
A simple «thank you» and a «job well done» can go a long way in the workplace.
Canva, a visual communication platform provider, recently released the results of a survey of 1,500 professionals in the US and Australia, highlighting the close relationship between workplace recognition and job satisfaction. According to the survey:
81% of employees who feel highly valued report high job satisfaction, compared to only 7% of those who feel low or neutral.
94% of employees who feel highly valued love their workplace, and 91% love their job.
In stark contrast, only 18% of those who feel low or neutral say they love their workplace, and only 33% say they love their job.
81% of highly satisfied employees believe their employer has fostered a culture of recognition, compared to only 8% of those who are neutral or dissatisfied.
A Gallup study also revealed that job recognition motivates employees, gives them a sense of accomplishment, and makes them feel valued for their work.
Seeing the Invisible: Identifying Gender Bias in Employee Recognition
“While compensation and benefits are critical to a total rewards strategy, if employees don’t feel recognized and appreciated for their efforts, it will undermine their work experience, negatively impacting their job performance, retention, and well-being,” said Kathleen Schulz, vice president and global innovation leader at Gallagher.
Why Recognition Matters
Employee recognition is not just a desirable practice, but a strategic tool that has a major impact on various aspects of an organization, said Shilpi Arora, total rewards content manager at WorldatWork.
“Organizations that prioritize recognition achieve higher levels of performance, lower employee turnover, and greater employee loyalty, making recognition a crucial component of successful business strategies,” she said.
Gallagher’s latest Organizational Wellbeing Survey showed that improving employee recognition and appreciation was the number one strategic priority in 2024, moving up three spots from 2023.
«Sophisticated technology platforms, personalized communications, and dedicated recognition incentive budgets are on the rise and can transform recognition into a cultural imperative,» Schulz said.
Furthermore, recognition addresses employees’ physiological needs, giving them a reason to come to work beyond pay, said Brie Harvey, director of market research and community at Achievers, an employee experience and recognition platform.
The Achievers Workforce Institute’s 2024 Engagement and Retention Report (Open in a new tab) found that employees who receive monthly recognition are 2.5 times more likely to feel a strong sense of belonging at work than those who receive it quarterly or less frequently, and are also twice as engaged and productive.
«72% of employees say they would rather work in a position where they feel supported and valued than one with a 30% pay increase, so it’s no surprise that organizations with a strong culture of appreciation see higher employee retention,» Harvey said.
The report also found that low-income people who felt valued for their work were 12% less motivated by money than high-income people who didn’t feel valued.
“The fact that below-market-wage employees who received at least one recognition per month were 33% more likely to say they were not looking for work, compared to their peers who did not receive recognition monthly, demonstrates the buffering effect of emotional pay,” Harvey said.
Types of Workplace Recognition
Workplace recognition comes in a variety of forms, each customized to employees’ needs and preferences, Arora said.
“Recognition should be tailored to each employee’s unique motivations, preferences, and work styles,” she said. “It should be personalized so that employees feel truly valued and so that the recognition drives desired behaviors, such as increased motivation, engagement, and loyalty.”
These types of recognition can range from informal, everyday recognitions to formal, structured programs. According to Arora and Schulz, common types of workplace recognition include:
Verbal recognition
Peer recognition
Management recognition
Employee of the month programs
Longevity awards
Promotional awards
Employer promotional items/merchandise
Department or team-specific events
Small personal gifts/gift cards
Thank you cards
Special lunches or other gifts
Special bonuses
Corporate celebrations and events
Harvey stated that taking a blended approach—encouraging both formal and informal displays of gratitude—can also yield positive results.
“The ultimate goal of any recognition program should be to ensure it is multidirectional and flows from bottom to top, side to side, top to bottom, and in all directions, so that all the company’s unsung heroes are recognized and silos are eliminated,” she stated.
Schulz added that, beyond work-related achievements, recognition can also honor more personal milestones, such as marriage, educational accomplishments, and the birth of a child.
“These efforts, both work-related and non-work-related, can help employees feel a deeper connection to the workplace, which positively impacts retention and well-being,” she said.
Recognition Pitfalls to Avoid
Recognition, like culture and pride, can’t be mandated; it must be inspired, Schulz said.
“You can’t force fun,” she explained. Well-intentioned organizations sometimes impose a “recognition quota” on managers.
For example, each manager must recognize three employees per month. While this is intended to encourage positive behaviors, managers often realize at the end of the month that they haven’t met the quota and act quickly to meet the goal. This can detract from the recipient’s value if the recognition feels forced.
Focusing too much on tactics and not enough on communication can lead to inconsistencies in how recognition is delivered, Schulz noted.
Therefore, training is especially important for leaders, as their messages and behaviors significantly influence employee perceptions and behaviors.
The 2023 Gallagher Organizational Wellbeing Survey revealed that only 26% of employers implement training on best practices for effectively providing recognition.
Harvey encouraged employers to adopt a continuous learning approach so that employees are constantly reminded why recognizing significant effort should be important to them and how to effectively express their appreciation.
“If the people in your company don’t know how to effectively recognize, it doesn’t matter what technology or processes you implement,” Harvey said. “You’ll be like a salmon swimming upstream until everyone understands that there’s a big difference between praise and recognition.”
Praise, according to Harvey, is like a pat on the back, while recognition provides clarity about what a person did in an exemplary manner and why.
“It shouldn’t take more than two minutes, but it does require developing muscle memory to be able to do the double duty of describing in detail what the person did and its importance to the bigger picture. What was the impact on the people or things that matter to the organization?” Harvey said.
In addition, Schulz warned employers about equity issues. “Recognizing the same people over and over again, recognizing those who work in the office more frequently than remote or hybrid employees, and generally not having clear criteria for recognition can reduce engagement,” she said.
Creating a Recognition Program
Embedded recognition starts early, happens frequently, and is continuous throughout the employee lifecycle, Schulz said.
“Gaining employee feedback through engagement surveys, focus groups, and various types of listening strategies and demographic analysis will help ensure a strategy that is relevant and valued by all generations in the workforce,” he explained.
Regardless of whether recognition is accompanied by a monetary or non-monetary gift, Schulz stated that a recognition program should be:
Specific. Make the recognition very specific to enhance its meaning.
Connected. Recognize behaviors or achievements that bring the mission and guiding values to life.
Authentic and sincere. For maximum impact, recognition should be delivered with sincerity and authenticity. This can be difficult, as personality styles and generational characteristics can lead to inconsistent delivery. Leaders must understand the importance of this and how to deliver it consistently.
Timely. Deliver recognition as soon as possible.
Public, when appropriate. Public recognition magnifies the impact on the recipient and helps other employees understand the behaviors the organization values. However, recognition must be personalized, and not everyone values or is comfortable with being publicly recognized. It’s important to understand the recipient’s preferences. Measuring a Program’s Success
According to Schulz, once a recognition program is in place, employers can understand the impact of employee recognition and appreciation by evaluating:
News and Insights
The secret to transforming work culture? Better middle managers.
The following contribution is from the FINN Partners portal, which defines itself as follows: FINN Partners is more than a full-service marketing agency. We are smart and passionate communication advocates with a mission to make a difference in the world. We transform how brands engage with their markets. How companies position and perceive themselves. How causes become movements. How stakeholders see the stakes. How great stories are told and shared to capture attention. Where leads are generated and results are monitored. We’ve even changed how people in an agency collaborate and unite for the common good. Our work reflects our values. What we do is how we do it. Whether inside our offices or on the front lines of business transformation and social change, we come together to create a meaningful and measurable impact on the world around us.
“Middle management” is a euphemism for a dead-end career and the butt of many office jokes. My mission is to ensure middle managers receive the recognition and support they deserve.
Why? Because middle managers are key to achieving healthier, more connected, and more productive workplaces, and more satisfied employees—those who stay with the organization to develop their careers.
Research supports the importance of middle managers, especially for employees. “…
Relationships with management, in particular, account for 86% of employees’ satisfaction with their interpersonal relationships at work,” according to a McKinsey & Company study of managers.
The 2023 Gallup Report on the Global State of the Workplace concluded that the number one thing companies can do to improve employee productivity is “to give them a better manager.”
I agree with Gallup, but I might modify that statement slightly to say that the number one thing companies can do is support managers so they can manage people better.
And many organizations aren’t hitting the nail on the head when it comes to support. In a McKinsey report, only 20% of managers «strongly agree that their organizations help them be successful people managers.»
It’s no wonder so many middle managers today feel stressed, overworked, and undervalued.
Caught between executives and individual contributors, they feel pressure from both the top and bottom.
They must foster buy-in for top-down executive decisions, such as return-to-work orders.
They are under pressure to ensure employees are fully satisfied with their jobs, at a time when employee mental health issues are acute.
They carry the burden of leading teams in an environment of constant change and uncertainty, yet they have a responsibility to deliver real results.
These leaders don’t have executive privileges, but they are also not part of the team they lead.
In many organizations, they are not considered a distinct employee group requiring specialized communication or recognition.
How can we improve the image of these unsung heroes?
The first step is to recognize their importance to the health of any organization and then create the conditions for their success.
Here are some ways CEOs and CMOs can develop managers’ potential.
Middle managers should be a separate group and part of overall communications planning.
Strategy updates, CEO changes, positive financial results, reorganizations: with any major announcement, it’s people leaders who should translate the news to their teams and provide them with more details.
Don’t leave them alone to repeat high-level messages. Just before or after any major announcement, help them anticipate employees’ questions and provide them with factual information, additional talking points, or materials to share with employees.
Promote their well-being. Positive, healthy managers will manage people better. If your managers are stressed, out of control, or don’t have time to do their jobs, they won’t be able to be there for their teams. Ask them what they need. Consider additional benefits for managers. Regularly remind them that their well-being is important and make them feel valued.
Invest in first-time managers. With few exceptions, great managers are made, not born. Offer junior managers a management mentor. The real value lies in managers helping each other through open, trusting conversations.
Develop a regular communication series or training program where managers come together to share and learn. Managers need more than videos. They need active workshops, toolkits, and other opportunities to focus on the people management of their jobs. Encouraging open dialogue among managers across the organization also provides allies for middle managers, which is important for a role that can be isolating.
Include your middle managers in the employee feedback loop. If you want to get a pulse on an organization’s culture, ask them; they’re more in the loop. Offer them the opportunity to share their perspectives on employee performance. Plus, asking them makes them feel valued and valuable in their roles.
Give Them Tools for New Employee Onboarding
A critical part of any retention strategy is providing a smooth and positive onboarding experience for new employees.
Managers are the most important people in making this process successful. Provide them with an onboarding guide that maps out the communication flow, provides guidance on building team connections, and more.
The goal is for onboarding to be consistent, positive, and empowering for everyone.
Define the human qualities you expect managers to champion. A great manager is a positive coach. Include these qualities in their job description.
Create recognition programs for managers that exemplify your values.
Make sure they have time to manage people. «Companies treat middle management as a catch-all,» says McKinsey, «forcing managers to spend much of their time managing non-managerial tasks and handling organizational bureaucracy, instead of allowing them to focus on an organization’s most important function: nurturing talent.»
Bottom line: Investing in high-quality people leaders has a positive multiplier effect on the culture of the entire organization.
Taking the time to understand the needs of middle managers, helping them develop positive relationships, and addressing their challenges can have a huge impact on a company’s culture. High-quality middle managers are the key to making workplaces feel and function much better.
Knowledge at Wharton Podcast
The following contribution is from the KNOWLEDGE at WHARTON website, a business magazine from the Wharton School of the University of Pennsylvania.
Written by
Knowledge at Wharton Team
Why Middle Managers Can Be the Most Important People in Your Company
Wharton management professor Ethan Mollick has a message for knowledge-based companies: pay more attention to your middle managers, as they can have a greater impact on company performance than almost any other part of the organization.
Mollick’s research, based on a comprehensive analysis of the video game industry, is presented in a new article titled «People and Processes: Suits and Innovators: Individuals and Company Performance.»
Wharton management professor Ethan Mollick has a message for knowledge-based companies: Pay more attention to your middle managers. They can have a greater impact on company performance than almost any other part of the organization.
In other words, Mollick asserts, “Middle managers, often ignored and sometimes maligned, are important. They are not interchangeable parts in an organization.” His view debunks the long-held belief that performance differences between companies are primarily due to organizational factors, such as business strategy, management systems, and HR practices, rather than differences among employees.
The importance of individual skills and characteristics can be especially significant when measuring company performance in industries and fields that value innovation, such as video games, software, consulting, biotechnology, and marketing, according to Mollick, who recently published a paper on this topic titled “People and Processes: Suits and Innovators: Individuals and Firm Performance.”
It is in these knowledge-intensive industries where variation in the skills of middle managers—the «managers» she refers to in her article—has a «particularly large impact on firm performance, much greater than that of individuals assigned innovative roles,» she says.
The influence these managers wield, she suggests, stems from their key role in project management, including tasks such as resource allocation and deadline monitoring—responsibilities often perceived as the bureaucratic, more routine, and less glamorous side of the business. Middle managers can also play a key role in fostering innovative and creative environments.
A Look at the Video Game Industry
One challenge Mollick faced in her research was the lack of studies measuring the relative contribution of middle managers versus innovators.
He addressed this gap by analyzing the video game industry, which is not only typical of many knowledge-driven industries but also «represents a case where the tension between the company and the individual should be more visible.»
The industry, he notes, is composed of relatively established companies with clear product strategies, yet heavily dependent on the «innovative output of key individuals.»
Furthermore, he writes in his article, «Success in the video game industry depends not only on managers in charge of innovation, but also on project managers capable of organizing dozens of programmers and coordinating budgets that often reach tens of millions of dollars.»
He does not include senior managers in his analysis, although his article cites a previous study showing that the impact of CEOs, CFOs, and other high-level executives in large companies is limited.
In fact, these senior positions explain less than 5% of the variance in the performance of Fortune 800 companies, a finding that Mollick says is consistent with other research in this area.
In large, established organizations, «senior managers, at least, explain relatively little of why some companies perform better than others.»
Mollick acknowledges that senior management plays a critical role in defining the company’s overall direction. «However, they have no significant influence on the decision of which individual projects are selected or how they are executed. At least in the video game industry, and certainly in many knowledge-based industries, everything revolves around middle management.»
Their research differentiates knowledge-based firms from traditional industries, where «economies of scale are crucial, such as manufacturing, and where there seems to be little need to consider individuals to explain performance.»
Toyota is one example. «With a six-tiered bureaucracy, multi-skilled workers, and clearly defined departments, Toyota built a manufacturing nerve center that integrates workers into a complex mechanism to efficiently produce automobiles,» Mollick writes.
«Ultimately, individual workers are replaceable and interchangeable with others who have received the same extensive training.»
The process «is not based on the skills of any individual worker, but on company-wide processes for hiring and training the right people for the right jobs.»
However, emerging industries are based more on knowledge and innovation than on processes and assembly lines.
Given this model, what can be said about the effect of middle management on corporate performance?
Various studies suggest that “their success depends largely on the structure of organizations… and their impact on performance is determined by the structure and culture of the company, rather than by individual differences.”
Mollick’s analysis of the video game industry reaches a different conclusion.
Good skills are transferable
Describing the focus of her research, Mollick notes that, within the video game industry, each game has a team of creators—including designers, programmers, and artists—working for companies of various sizes. “Because accurate credits are available, both at the individual and company levels, for many games developed in the industry, it is possible to accurately trace both the individuals and companies responsible for innovation and entrepreneurship within the industry,” Mollick writes.
The video game industry can be divided into producers—similar to project managers in the software industry—and designers. A producer (middle manager) must ensure the project meets deadlines, secures adequate resources, and adheres to industry standards. They must communicate effectively with the rest of the company and with external vendors, such as developers and PR agencies, among other responsibilities.
The designer (innovator), on the other hand, contributes ideas and helps the development team turn them into a game, paying attention to plots and characters, but also to logic, sequencing, and interaction.
Producers play managerial roles and designers play innovator roles, according to Mollick, who focused his research on PC games rather than console games like those running on Nintendo, Xbox, or Sony consoles.
Using a Multilevel Multiple Membership Cross-Classification (MMCC) model analysis of 854 games from various companies, he measured, over 12 years, «how performance changes when you combine different people across different companies in different ways.» He uses each company’s revenue, controlling for costs, to measure company performance.
The games he analyzed generated around $4 billion in revenue and included 537 individual producers, 739 individual designers, and 395 companies.
Using the MMCC model, he was able to determine how much project success was due to individual designers, rather than producers or firms.
Mollick found that middle managers, not innovators or firm strategy, best explained differences in firm performance. Managers explained 22.3% of the variance in revenue between projects, compared to just over 7% explained by innovators and 21.3% explained by the organization itself, including strategy, leadership, and firm practices. “Far from being interchangeable,” Mollick writes, “individuals contribute uniquely to a firm’s success or failure… Moreover, even in a young industry that rewards creative and innovative products, innovative roles explain much less variance in firm performance than managers.”
Or, as Mollick later writes: “High-performing innovators alone are not sufficient to generate variance in performance; rather, it is each manager’s role to integrate and coordinate the innovative work of others.” So, while innovators can come up with new games and concepts, managers play a crucial role in deciding which ideas actually receive resources. It’s this «selection ability» that Mollick measures.
The best managers are able to collaborate closely with innovators to turn their ideas into realistic project plans, she adds, and are effective at motivating the team and facilitating «collective creativity.»
To test whether these skills were transferable, Mollick reexamined the data, looking only at people who changed companies.
She found that middle managers who changed employers had an even greater impact on performance than those who remained within the organization. «It’s not about a person being a good fit in one organization. Their skills are useful anywhere.» This proves once again that managers are not «cogs in a machine. There’s something innate about them that makes them good at what they do.»
Beyond Dilbert
«It’s striking that the impact of these middle managers on a project is not only greater than that of creative people, but also greater than that of the rest of the organization,» says Mollick.
«We tend to think that companies focus on systems and not enough on people.» He suggests that companies pay more attention to filling positions at the middle management levels, identifying the best and rewarding them appropriately.
Middle managers, he adds, «have a difficult job.» They manage limited resources, don’t monitor everyone’s actions, can frustrate those around them, and aren’t interested in changing course when necessary. They must move in a direction, even an unpopular one, that ensures the project’s success.
Finally, the project must align with the company’s goals. «It’s always easy to think of the worst manager you’ve ever had—the ones you see in the Dilbert cartoons,» says Mollick. “But it’s important to recognize the vital role these middle managers play in ensuring information flows and creativity thrives.”