Do you remember the last time you received a thank-you note? It felt special, didn’t it? Strangely, we feel nervous about sending these kinds of notes. Do thank-you notes actually accomplish anything? Aren’t we supposed to focus on getting real work done?
I pride myself on making a productive contribution to my workplace. One of the most powerful impacts I have is when I find people who want to use Excel better. I give them a few tutorials to upgrade their skills, and send them off as a more productive player. I want more people in our human resources office to open spreadsheets and crank out the numbers themselves. It lessens the burden on me, and creates an environment where everyone talks freely about the numbers. And voila, we have the research-influenced workplace.
What is baffling is when people send me thank-you notes and Starbucks gift cards for devoting my precious time to help develop their skills. Don’t they understand that I am manipulating them to achieve my own selfish goals? Don’t they understand that I’m an economist? Who are these social workers and coaches and creatives types, to think they can bring me into their magical world with nothing more than a few words of gratitude? My cunning plan has gone horribly awry.
What Exactly Are the Rules of Gift Exchange?
Generosity and gratitude are a common source of misunderstanding. I once got really curious about gift exchange. It started out as an attempt to understand social norms, but I ended up reading anthropological research about gift-giving in archaic societies. (Of course I did). I read a couple of books on the topic, including Marcel Mauss’ The Gift (W.W. Norton & Company Inc, 1990). This “gift economy,” just to introduce the Wikipedia page on the topic, makes huge distinctions between the market behaviours of commercial transactions and non-market gift exchange. This is important to understand, because showing up at work every day is a market activity. But if it’s a good workplace, colleagues act like they are in the same tribe.
Gift exchange has many subtle rules that are similar across cultures and across time. There is usually a time lag between gift-giving moments. The giving of a gift places the other person in debt, and the gift must be repaid for fear the relationship could be severed. There is a tendency towards reciprocity and balance, and attempts to profit from the exchange are mostly taboo. The dynamic fosters qualitative relationships, as opposed to the quantitative relationships of market trade.
Also, those who are obliged to accept charitable gifts feel a sense of being poisoned and stigmatized, as they are unable to keep things even. You can subjugate vulnerable populations by staying one-up on them with gift-giving. Who says anthropologists can’t learn a trick or two from economists?
Thank-You Notes are Undervalued
I see thank-you notes as a key part of gift exchange. The notes acknowledge an exchange of good-will. They place, in writing, that gratitude has been established. There is the implication that a favour might be returned one day, or paid-forward to a third party. Thank-you notes formalize that an emotional thread has been established between giver and recipient. Society is a web of such threads, and we weave ourselves into this web as it entangles us in obligations, for better or worse.
In an article at the British Psychological Society, Christian Jarrett reviews research conducted by Amit Kumar and Nicholas Elpey on expressions of gratitude. The researchers asked participants to send thank-you notes to people who had contributed to their lives in a meaningful way. The researchers then followed-up with the recipients to ask how they felt.
“The senders of the thank-you letters consistentlyunderestimated how positive the recipients felt about receiving the letters and how surprised they were by the content. The senders also overestimated how awkward the recipients felt; and they underestimated how warm, and especially how competent, the recipients perceived them to be.” (Emphasis added)
These misjudgments discouraged people from sending the thank-you notes in the first place. The authors note that withholding this gratitude is to refrain from “a powerful act of civility.” The notes benefit both the recipient and the sender, as the sender is perceived to be more competent.
Is Formal Recognition a Meaningful Workplace Practice?
In addition to hand-written notes and kudos emails, some workplaces have formalized recognition programs that distribute points between employees. All employees are given points to distribute to someone other than themselves (just to be clear), and there’s an electronic system to keep score. Top givers and top receivers are profiled on a periodic basis, and sometimes points can be cashed in for swag or experiences. A quick internet search reveals programs such as Kudos, Achievers, Point Recognition, and Terryberry. Terryberry has a great infographic detailing the benefits of these programs, referencing credible sources at the bottom of the page.
In terms of effectiveness, recognition programs cause higher customer satisfaction, better employee engagement, and staff turnover that is about 24-31% lower, depending on the study. To clarify, if your turnover rate used to be 8% and it dropped to 6%, that’s a 25% reduction in turnover.
These programs net a massive value proposition. If a company spends 1% of payroll on these programs, 85% see a positive impact. Delta Airlines saw a 564% return on their investment. Massive percentage returns are often the result of an incredibly low denominator. That is, if Delta spent 1% of payroll and saw a 6.64% increase in productivity, that is consistent with a 564% return. But it’s nothing to sniff at. If you know of people trying to earn more than 10% per year on the stock market, you would have to acknowledge that recognition is far more impactful than anything being pushed to you by bankers.
Incentive Plans and Recognition Programs Are Very Different
A key detail that must not be missed, is that recognition programs bear little resemblance to formal incentive plans. In Alfie Kohn’s 1999 book Punished by Rewards, he details how performance-contingent rewards (i.e. do this and you’ll get that) cause behaviours that largely decrease business effectiveness. When you offer an employee a 10% target bonus for exhibiting certain behaviours, they tend to minimize risk, abandon creativity, game the system, and express severe outrage when they get less than the maximum bonus. And so, this 10% bonus achieves approximately zero return on investment, and possibly a negative return.
The issue is that people don’t like to be controlled by overlords, and incentive plans are inherently controlling. Incentive plans have a scientific legacy that they are designed by people who make no distinction between humans and rodents.
By contrast, recognition systems are expressions of warm-feeling and a sense of emerging qualitative relationships between peers. When you exchange thanks with peers, you love them a little.
So, reflect on your week and think about those who helped you achieve your goals. Get past that misinformed sense that expressing gratitude will create discomfort. Establish those threads of good-will between peers, and weave together an archaic society of those who can keep things even. It makes you more competent. It makes you human again.
Stuart Murray Speaks 