How The Trust Molecule Drives Performance.


This week there was a wonderful article byPaul Zak in the WSJ about the effects of the hormone Oxytocin on our behavior.

What he points out is that all human beings have the tendency to create Oxytocin when we feel loved, appreciated, or warmly touched and hugged.

As Paul points out in the article, this also means that when we trust people at work, they behave in a more trustworthy way. This biological effect describes why “empowerment” in the workplace can be a very good thing (when done in the context of the company’s values and mission).

But there is an even bigger story here.

We are just completing a major research study on the use of Rewards and Recognition in business. It turns out that companies spend more than $45 billion a year on these programs (averaging almost 2% of payroll!). And as our research shows, this enormous spending on things like service awards, recognition, free parking places, etc. doesn’t drive nearly the business result it could.

Consider the following data from our research:

  • 87% of all recognition programs are based on tenure (years of service)
  • Only 56% of programs recognize company goals in the program
  • Off-the-shelf (ie. pre-defined) programs actually drive no measurable business impact
  • Only 53% of employees believe their company has any recognition program at all
  • Only 17% of employees believe their managers know how to recognize them well.

On the other hand, this same research (which will be published in June) also shows that companies which fall into the top 15% in building a “culture of recognition” have 46% lower rates of voluntary attrition. These are companies that regularly appreciate and thank their people, and this drives engagement, retention, and 12-15% improvements in overall employee performance.

Where does Oxytocin fit in? When people feel appreciated at work, we appeal to their higher level needs. In Maslow’s hierarchy, the highest level needs we have are the need to be loved, be part of a community, and to self-actualize.

Modern and sound employee recognition programs appeal to these higher level needs, making people feel good, and in turn work harder, take better care of customers (and each other), and make your business better. Look at companies like Deckers Outdoors, the company which makes Uggs and Teva Shoes.  This is a company that loves their employees, and they compete vigorously with hundreds of bigger firms.

Our research also finds that modern recognition programs are dramatically different from the old “service award” programs (which probably started in the early 1900′s to placate labor unions). They are given by employees to each other, they are given frequently and for very specific work, and they align with company values and goals, not just general “nice things.”

Think about how you recognize and thank people in your workplace. A little extra love goes a long long way.  Source/Credit: Josh Bersin for Forbes.

Posted on April 30, 2012, in Employee Engagement. Bookmark the permalink. Leave a comment.

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