Basking in the Glow of Recognition?

As I sit here writing this issue's column on the Monday before Thanksgiving, my thoughts race ahead to the coming holiday season and how I might spend the precious vacation time I've accrued. I'm dreaming of completely unscheduled days devoted to nothing in particular.

It seems I'm not alone in my vacation daydreams. Recent research is telling us that the ways that most organizations evaluate and reward performance are being traded in for methods more in line with the way today's employees live and what they value.

Indeed, Microsoft recently abandoned its long-standing practice of rating employees according to a numbered scale, or so-called "stack ranking." Instead, the software giant will evaluate performance based on factors like teamwork and collaboration, and encourage employee growth and development.

"This is a fundamentally new approach to performance and development designed to promote new levels of teamwork and agility for breakthrough business impact," wrote Lisa Brummel, Microsoft's EVP of human resources, in an internal memo published by news site The Verge.

Does this mean your organization should do away with annual reviews and bonuses and instead give each team member a Whitman's Sampler and a pat on the back? Not exactly.

A Forbes piece titled "5 Ways Leaders Rock Employee Recognition" warns that evaluation and reward practices tied to performance will create employees who feel they are worth X dollars to the organization.

"In my opinion, this approach misses the point of recognition," writes author Meghan Biro. "People crave positive feedback, recognition [that] they put in extra effort, acknowledgement of leaders and peers, the glow that comes with knowing an achievement has been seen, appreciated and celebrated."

In an industry like retail, where talent is challenging to recruit, costly to train and difficult to retain, smart organizations would do well to consider how their performance evaluation and compensation programs align with not just their organizational strategy, but also with the many team members who are dedicated to their success.