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Ray Zuilan

New England College of Business and Finance

MGM 225

Professor McKeever

August 5, 2019


Employee recognition is key to fostering a productive work environment. Recognizing

peers and employees for their hard work can be formal or informal. In the given scenario, a 3

percent pay raise to the employees across the board is considered formal recognition because it

involves an incentive that has to be documented lawfully. As the owner, I would add on to the

pay raise by sprinkling in informal recognition, i.e. verbal appreciation, work party. According to

Gallup’s 2012 report, companies with recognition programs reported a 22 percent increase in

productivity rates (Chau, 2016).

A 25-employee company is definitely considered a small business. According to the text,

the keys to effective performance appraisals in small businesses is breadth and direction

(Gomez-Meija, 2016). Breadth entails the job description being broad and wide reaching because

small businesses require employees to work outside of their comfort zones by stepping into

duties that they sometimes do not have experience in, but must be accomplished. In this case, the

employees all pulled together in an effort to raise revenue. In terms of direction, I will be 100%

certain that each and every employee receives that 3 percent pay raise to show follow-through.

This shows the employees that I follow through with rewards when they perform up to or beyond


Even though I can’t offer any more than a 3 percent pay raise, I will make sure to reward

them in the second-best incentive that a leader can offer other than a pay raise: paid time off

(PTO). I will give each employee an entire week of PTO to show my gratitude for their

hardwork. Adequate work-life balance is key, and allotting more vacation time will increase

productivity in the long run.


Not every positive appraisal has to include talks about a pay raise. Simple words of

gratitude and PTO are surefire ways to let employees know that their work is being appreciated.

Recognition is key because every employee yearns to be seen for their hardwork.


Chau, M. (2016, September 13). The Power of Employee Recognition: A Guide. Retrieved from

Gomez-Mejia, L. R., Balkin, D. B., & Cardy, R. L. (2016). Managing Human Resources (8th

ed.). Boston, MA: Pearson.