Reasons To Celebrate
By Glenn Parker, Jerry McAdams and David Zielinski
edited by Joan M. Steinauer
This team-reward system proved effective for the entire staff at a North Carolina-based Merck Pharmaceutical plant.
Enlightened companies know it shouldn't take winning a big new account or a record shattering profit level to find a reason to celebrate employee performance; they understand the power in recognizing the small daily acts of team play and sacrifice that ultimately lead to many of those "big bangs." Most of these companies, like Merck & Co., also know how potent non-cash team recognition tactics can be when used in tandem with financial incentives for project teams or organizational units.
The Wilson, N.C.-based pharmaceutical plant is part of giant Merck, charged with packaging many of its well-known prescription drugs along with manufacturing products such as cholesterol-lowering Zocor, the asthma drug Singulair, medications for AIDS patients, and others for those suffering from high blood pressure or ulcers. The Wilson plant is also the only non-union manufacturing site in Merck domestically, and all 425 of its full-time employees are salaried.
Merck Pharmaceuticals boasts three reward plans with a strong team orientation:
- "Reasons to Celebrate," a flexible, a peer-nominated recognition plan.
- "Pay for Performance," a plant-wide plan tied to hitting annual goals in four of the plant's operation areas.
- A "Team Stock Option" reward plan for project and organizational unit teams that rewards extraordinary acts of teamwork as well as team performance against predetermined goals with Merck stock options.
Reasons to Celebrate
This plan, says Vicki Cobb, the plant's employee development manager, is a way for "teammates to recognize teammates for extraordinary effort and accomplishment, and to broadcast to the plant as a whole the achievements of those teammates."
The plan emerged from the work of a cross-functional team of employees and managers charged with rethinking reward and recognition efforts at the Wilson plant. The goal was to find new ways to support and encourage Merck's burgeoning team-based culture. "Rather than having only top down recognition, the team suggested to management a peer nomination process," Cobb says.
Any Merck team or employee can nominate any other Merck team employee throughout the plant under "Reasons to Celebrate." The recognition oversight committee created this list of actions that might warrant recognition, although nominators aren't limited to the list:
- Extra effort above and beyond ordinary and expected performance.
- Improvements in the quality of teamwork.
- Suggestions that result in product quality, worker safety or process improvements.
- Excellent customer service; cost or time savings; acquisition and use of new skills.
- Perfect job attendance.
"Reasons to Celebrate" is a non-cash plan, following the thinking that cash awards provide a quick jolt of satisfaction but little feel-good staying power. Award recipients have little to remember their nominated actions by after the cash is spent. Instead, the menu of non-cash reward items in "Reasons to Celebrate" offers a choice of gift certificates for one video rental a week for a year, courtesy time off, a new set of tires, membership fees at a health club, and more. The reward is accompanied by a letter of appreciation written by nominators and copied to two levels of a nominated employee's or team's managers or coaches, in addition to public bulletin board recognition.
Awards are limited to a $300 equivalent for individuals and $500 for teams. When a work team is given a "Reasons" award, it decides through a vote, which of the gifts it wants, or whether each team member wants an individual reward item.
What actions typically are recognized? Cobb recently gave a "Reasons" award to a team of employees who volunteered to help her design and deliver a new training class to enhance plant-wide knowledge of Merck's measurement of operational excellence. Six workers stepped forward, "finding time in very busy schedules to help deliver the course to everyone on the plant site," Cobb says. With the help of these part-time trainers--who delivered the content in time above-and-beyond normal work schedules--some 30 four-hour classes were delivered over a two-month span. Other project or organizational unit teams received "Reasons" nominations for quality or process improvement suggestions that helped Merck improve its bottom line.
"Reasons to Celebrate" saw one significant change in 1997. In the initial plan design, an independent, cross-functional advisory team was given power to approve or vote down all award nominations based on established criteria. But this oversight group often found itself coming back to the local team or individual making the nomination for more information. "We decided to return the decision back to the teams themselves," Cobb says.
The advisory team had already been under pressure for approving some nominations and not others, she says, "and we thought, who knows the details of a nominated act better than the team where the act originates? Who knows whether I'm exceeding job requirements better than my own team members?"
Plant work teams were similarly empowered to choose their own "Reasons" awards from the menu, rather than the prior process where the advisory team chose for them.
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Reprinted from INCENTIVE, September 2000, pp. 96-97. This
article was excerpted with permission from Rewarding
Teams: Lessons from the Trenches, by Glenn Parker, Jerry McAdams and
David Zielinski, Jossey-Bass
Publishers, a division of John Wiley & Sons, Inc.