Doris Lessing has been awarded the 2007 Nobel Prize for literature today. She is the author of many works, including science fiction and short stories, and her most famous work is the classic “The Golden Notebook,” published in 1962. The Nobel Prize Foundation awards six main Nobel Prizes each year, in literature, chemistry, medicine, economics, physics, and peace. It is debatable whether the Nobel Prizes actually provide incentive for people to excel in those areas—it seems they are usually an honor bestowed on the unsuspecting but grateful recipient. In business, do awards truly encourage employee production and productivity?

I’ve been in a lot of businesses and have been involved in a lot of rewards and recognitions, both on the giving and receiving ends. In my experience, the most effective awards are ones given to employees who know they WILL receive the award if they work hard enough and accomplish the goal. If they think they MIGHT receive it, it’s not nearly as effective. I think the optimal reward is when a business identifies a high level of employee performance they want to encourage, then offers a set reward given to ALL employees who attain that level. These are the most effective types of incentives.

The reward can be various things—it doesn’t have to be money. Yes, money is very powerful, but effective rewards can also be:

• Public honor & recognition within the company community, such as a monthly award, a plaque, a trophy, etc
• Public lists of accomplishments, highlighting an individual
• Public ratings/rankings list so that employees can compare their performance to each other’s—then giving rewards to the top performers on the list.