When we think of rewards and recognition, most of us think of money. After all, few people believe they have more cash than they need. Thus, when there are no economic rewards for the incremental or transformational changes brought on by Lean management, you present a powerful barrier to change. But as highlighted in this month’s edition, bonuses and salary incentives may not necessarily motivate a change in behaviour, nor does it necessarily convince people that the downside of failure will go unpunished by the system. So, does money motivate, and if so, how much is too much? Conversely, are there nonmonetary rewards that we might consider as part of a lean management programme?

I recall a General Electric Six Sigma project team pitching to Jack Welch and his European Leadership Team in 1998. The project team had been working tirelessly for weeks on an effort to identify and improve the turnaround time of its jet engines maintenance cycle. The team had involved all manner of customers and suppliers proposing a radical improvement to the way GE approached its entire end-to-end maintenance cycle. At the conclusion of their logical and simplistic proposal, the entire room erupted in applause as Jack stood and walked to the podium, reached into his wallet and gave each of the Black Belts on the team $10,000 in cash! But even more impressive was when he did the same for another project team that had failed in its implementation of a radical improvement to a JIT inventory management plan.

Rewarding both success and failure may be an exception to the normal process, but the impact went to the heart of a truly effective rewards and recognition programme. Effective rewards and recognition inspires, promotes optimism, and builds empowerment:

  • Clear line-of-sight and linkage of Lean management to an organisation’s strategy inspires action and gives employees the permission to try to continually make things simpler and easier for their customers and each other.
  • Timely rewards for both success and failure bolsters an organisation’s confidence with “we-won-you-can too” anecdotes that quickly tears down real and imaginary levels of bureaucratic inertia.
  • Empowerment is not about giving people new authority and new responsibilities and then walking away; it’s all about removing barriers.

With this in mind, it matters not whether rewards and recognition are monetary or nonmonetary. Be creative. Pull down the barriers that hold back change. What matters is that there is a well designed rewards and recognition process at the core of any lean programme. In general, the more visible and unambiguous the victories (or losses), the more they will help the change process. Rewarding and recognising effort is both a catalyst and fuel for the essential chain reaction needed for sustained and lasting change.