Posted by: Bill von Achen | July 30, 2010

The Power of Informal Incentives

Performance incentives need not be complex or expensive to be effective. Time and time again, informal recognition, delivered spontaneously and without great cost to the company, provides people with the greatest sense of accomplishment. A simple thank you, either privately or in front of a group of fellow employees, can do more to encourage outstanding performance than all the formal performance incentive programs put together.

The story behind the origin of the Golden Banana Award at Hewlett-Packard best illustrates the power of informal rewards. A technical manager at the company was suddenly confronted by an excited engineer, who rushed in to tell him that he had just solved a particularly difficult technical problem.

Looking around for a way to acknowledge the employee’s accomplishment, the manager spotted the banana that he planned on eating for lunch later that day. Instinctively, he presented the banana to the engineer with the words “Well done! Congratulations!”

That manager’s desire to reward an employee for a job well done has since evolved into H-P’s Golden Banana Award, one of the company’s most prestigious honors for technical innovation. So don’t overlook the simple things when you’re considering performance incentives!


  1. Some years ago when touring the operations of a Boston financial services firm I noticed brown paper bags tacked up in employees cubicals and they had a “It’s in the Bag” slogan printed on them. I asked the CEO what that was all about and he said they recognized employees with the bags which contained simple prizes like a pair of movie tickets or a free lunch coupon. He said it was a very visable point of pride to have a bag up in your cube.

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