A spot award, as its name implies, is a financial award given to an employee literally “on the spot,” as soon as superior performance is observed.
Programs such as these have been around for some time. Spot awards are designed to recognize special contributions, as they occur, for a specific project or task.
Spot awards are generally for a special contribution accomplishment over a relatively short time period.
A spot award lets employees know that someone has noticed their noteworthy contribution. At the same time, it recognizes and reinforces the behaviors and values that are important at an organization. For example, in the early 1900s. Thomas J. Watson, Sr.Opens in new window, the founder of IBM, reportedly wrote checks on the spot to employees doing an outstanding job.
Spot rewards should not be something expected by employees following the achievement of every goal. In reality, when goals are very difficult, rewarding people only if they reach their goals can actually hurt performance and does not serve as a motivator for employees. This is because people’s motivation and self-efficacy decrease once they realize their efforts could be for nothing in a bonus system where there is no reward if you fail to reach the goal.
The negative effects disappear when people are rewarded for their effort toward achieving a goal, rather than achievement of a goal itself. Ultimately, leaders and their organizations should use spot awards as a sign of recognition and appreciation of the behaviors that they want to encourage from employees in the future.
Spot awards are more effective when they are used to recognize and encourage highly effective behaviors, as opposed to being used as a motivator or reward for past accomplishments.
Leaders would do well to remember the rules of reinforcement. That is, the motivational value of spot awards comes from using them as a tool for positive reinforcement.
Recognizing and rewarding employees for displaying certain behaviors increases the odds of that behavior occurring again in the future. There are four major factors that influence the value of rewards used for positive reinforcement.
Contingency. To be effective, spot rewards must be tied to demonstration of certain behaviors. Leaders should have clear criteria to use as a guide for when to give employees different types of spot awards. This is also important for ensuring equity by creating consistency across leaders in their use of awards.
Whether an employee receives spot awards should depend on whether they display behaviors that the organization believes are exceptional, and not their manager’s attitudes about what constitutes exceptional behavior.
Immediacy. In the case of motivation, immediacy equals effectiveness. When leaders forget about a reward and push it off to the next week, or worse, wait until the end of the year to distribute rewards to employees, the reward will have less effect on motivation than if it had been awarded immediately following the behavior.
Satiation. When the same type of reward is used over and over again, it can lose its reinforcing value. In other words, there is such a thing as “too much of a good thing” in the context of reinforcement.
For example, monetary rewards can reduce intrinsic motivation if they are overused. If a leader’s organization uses nonmonetary rewards in addition to cash bonuses, consider switching up the type of reward given to employees.
Keep in mind that reward type should be reflective of the behavior demonstrated, and that not all employees will value the same type of rewards equally. Understanding what motivates each employee can help leaders to determine the most appropriate type of reward.
Size. The size of value of spot awards should reflect the behavior demonstrated. It is important that leaders are thoughtful in this decision and avoid choosing arbitrary values for the rewards given to employees.
Employees will use past reward values to create an expectation level against which to judge future rewards. If the reward does not meet or exceed this expectation level, employees may feel frustrated and demotivated.
Leaders should also understand the limits of rewards like spot rewards. When determined and distributed the right way, spot rewards can be an effective way for leaders to encourage and motivate employees. But used incorrectly, spot awards can hurt motivation. Even when used correctly, over reliance on spot awards can undermine their value.
The motivation people get from positive reinforcement fades quickly. Receiving a spot reward might increase their motivation and satisfaction for a short time, but eventually, the feelings fade.
The best way to ensure that your employees are truly motivated at work is to ensure that they find their work motivating. And this requires leaders engaging employees and truly understanding their unique skills and capabilities at a deeper level.
